The recent headline, “Airbnb moves into the tour business” has started alarm bells ringing for many Atta members on both sides of the tourism industry, be they buyers or suppliers. It’s indeed an intriguing story.
Three students, Joe, Nate and Brian, rented out an old lilo as a bed that they called an ‘air bed’ in their shared, Californian flat. One air bed, available for one guest, in one small West Coast flat. Now just eight years and 100 million guests later, they own one of the hospitality industry’s most controversial, yet successful enterprises – Airbnb. You might not have cottoned on to this but the Airbnb model could well affect your business, especially those operators providing or selling accommodation in Africa’s cities, as Airbnb expands with little concern for regulation throughout our continent.
The Airbnb model allows the consumer to find, book and occupy a bed in a room, in most cases at far cheaper rates than can be offered by traditional accommodation suppliers – the hotels, lodges and even bed and breakfasts – in or near Africa’s cities. The controversy of course, as always, centres on regulation and perceived tax avoidance.
The authorities are now waking up to the fact that the Airbnb model avoids licensing regulations as well as local rates and taxes, allowing the platform to easily undercut all competitors. As a result, over the last two years councils from Manhattan, US, to Chelsea, UK, Montmartre, Paris, to Lavington, Nairobi, have become increasingly concerned that the rooms in private houses and apartments Airbnb sells are, in effect, no more than ‘illegal stealth hotels’.
In the US there is even a new law that exposes Airbnb to fines of $7 000 if they advertise rentals in buildings with more than a set number of apartments, in New York’s case just three apartments in the whole tower block. Berlin has followed suit, introducing a hefty fine of €100 000 for anyone renting a home under certain conditions without a permit. Be warned, there is almost certainly an Airbnb competing with you for custom, operating under the radar with an unfair advantage.
What started as a small business to rent out a bed in guest room on an occasional basis, is turning into a massive operation that avoids the checks and balances that the traditional hospitably industry is subject to. The dreaded health and safety rules that our industry must adhere to are, in most cases, there for a good reason and that is to protect the consumer.
An Airbnb guest has no such protection as the website AirbnbHell so clearly reveals. Dedicated to helping hosts and guests share their stories about the risks and dangers of using Airbnb, it tells a pretty horrific story, which must reinforce our own industry’s position. The list of dangers is long but, basically, if you book through Airbnb, you have little or no protection if things go wrong. Indeed, under some circumstances, this website will explain how you might even be prevented from writing a review to warn others not to fall into the same trap.
Now, there is a new venture afoot with the launch by Airbnb of Trips. This brings together where you stay, what you do and the people you meet all in one package that will bypass traditional DMCs and ground operators. They have even announced that they will soon include flights and ground transport. Once again it appears that this model will avoid the traditional checks and balances that protect the consumer.
Of course the market dictates the outcome and direction our industry must take, as we have seen over the last decade, as the traditional tourism chain has been broken and operators, some vertically integrated, combining buyer and supplier, adapt to meet the challenges of the Internet and globalisation.
Brexit, Trump, Uber and now Airbnb all challenge the status quo in their different ways. The question is, are we prepared, or even able, to adapt to meet that challenge or alternatively should we be shouting “foul play” from the rooftops?
