- Airbnb stock tumbled 14% in one day after the company predicted slowing demand.
- Some former Airbnb diehards say they now prefer the consistency of hotels.
- Airbnb said it might increase travelers’ ability to book hotel rooms through Airbnb.
An extended stay hotel is predictable and more than good enough. AirBnB has a consistency problem. To include pricing and hidden fees.
I just stayed at a 4 star resort in Quebec City. That value could not be delivered with Airbnb. Ain’t no way.
I stopped doing airbnbs a few years ago. Hidden fees, unreasonable rules and requirements. And now more expensive than most hotels. They just are worse now.
Yeah it turns out that Airbnb hosts behave much more like hivemind landlords than business owners. They all wind eachother up to behave the same in their forums and chatrooms. The advice on how to operate comes from other greedy reactive people and not from like consultants and data mining and people with degrees in their own field like it does with hotels and large businesses.
Airbnb hosts are “school of hard knocks” TikTok and Instagram advice listening get rich quick schemers who put minimal investment into quality.
Both groups are enshittfying their industries. But the downward slope is much steeper in airbnbs than it is in hotels.
Airbnb is a fine example of a sort of variation on enshittification.
The way it works is a new company with a new and notably cost-effective way of doing things comes along and is unsurprisingly wildly successful. And then, inevitably, that leads to them hiring a whole raft of executive parasites who all have to be paid obscene salaries for doing nothing of any real value, which means the company needs to raise prices and cut back on services in order to generate more profit to pay those salaries. And meanwhile, the new executives, with nothing of any note that they actually need to or even can do, but with a need to create some illusion that they’re necessary, have pointless meetings in which they propose and wrangle about and eventually approve and implement new policies and new plans that are generally awful.
And pretty quickly and not coincidentally the new company ends up at least as bloated, mismanaged, overpriced and under-performing as the companies they so recently replaced.
See also: Uber, DoorDash and the entire streaming industry.
While you got the effects correct, you got the process wrong.
The way it works is a new company with a new and notably cost-effective way of doing things comes along and is unsurprisingly wildly successful.
The business model isn’t based on cost effectiveness. Most of these companies work at a loss for a long time, providing artificially low prices in order to gain market share and push existing players out. This is isn’t new. It’s called dumping. Irs just been a bit obscured by buzzwords like “new technology” and “disruption.”
And then, inevitably, that leads to them hiring a whole raft of executive parasites who all have to be paid obscene salaries for doing nothing of any real value, which means the company needs to raise prices and cut back on services in order to generate more profit to pay those salaries.
These executives aren’t hired to do nothing and collect high salaries. Their salaries aren’t what drives the price increases. The major shareholders who spent their money to sustain the company so far want to get return on that money. They install executives with this one goal - maximize profit - so they can get this return. This is what drives the hiring of sociopaths who drive prices up in order to increase profits at all costs. This is what drives hiring such people in all public corporations. You got the effects right but the reasons aren’t to do with shit execs and their salaries. It’s all to do with major shareholders search for growing profits. Everything else follows from there. This is important to understand in order to point the finger in the right direction. Misdirecting people’s substantiated anger with the system has been a perennial tool used to prolong profit maximization for as long as possible.
I’d also like to point out that the underlying model may well be unsustainable in the way that it is offered at the start. Who benefits when a for-profit company operates at a loss? We, the customers, do. We get low prices and customer-friendly practices that are genuinely enjoyable. That business can’t operate in that way indefinitely, as the early investors are not funding it as an act of charity.
Eventually, the bill comes due. The shareholders have funded the company on the premise that, after losing lots of money on customer acquisition, it can restructure and monetize those customers and recoup their investment, hopefully with a lucrative return when they decide to capitalize their holdings and find a new company with which to repeat the process.
There is absolutely no reason not to enjoy the perks of the early stage of the customer acquisition process; the shareholders are subsidizing your product at no cost to you. But we shouldn’t be surprised when the shareholders stop subsidizing and start squeezing their formerly pampered customers in the hopes of getting their money back (and more, of course).
This doesn’t excuse unethical or abusive practices, but it does mean that, even without them, the experience of those early days probably wasn’t going to last forever.
There is absolutely no reason not to enjoy the perks of the early stage of the customer acquisition process;
I can think of one reason. Depriving the existing industry from revenue leading to its demise which ensures the new entrant can raise their prices higher than the preexisting status quo. This is the other part of the equation that makes dumping work. Of course we can’t expect most people to choose to pay more but if people were able to resist that, the strategy wouldn’t work.
There is absolutely no reason not to enjoy the perks of the early stage of the customer acquisition process; the shareholders are subsidizing your product at no cost to you.
At the individual level, sure. Even for things like streaming services it isn’t a net negative to take advantage of those ‘introductory’ prices.
But a lot of these businesses that operate at an obvious loss are undercutting currently existing business practices that are probably more cost efficient than these new businesses. Like restaurants that used to take care of their own delivery were undercut by malicious pricing from door dash and uber eats only to wind up in a situation where they would have to start from scratch again or pay the outrageous extortion fees to DD and UE.
I avoided both DD and UE because I knew it would not be sustainably long term. It was obvious they were maliciously undercutting competition. Same with uber and lyft and all the other ride share businesses, although at least they got some reform going on the taxi side.
The thing about Airbnb and Uber is that their model is renting out other people’s stuff. A hotel has to do the capital investment to actually build a hotel, a taxi company has to invest in cars and a taxi medallion. They just had to build and maintain a website and use other people’s capital. The only reason they spend billions is in executive compensation and short term subsidising of prices to gain market share.
I stopped using air bnb. I use to use them for more obscure places that didn’t have hotels. I don’t like they take homes out of the market. I get for vacation areas this is less of an issue but for places like ny city, San Francisco, etc it’s taking homes out of use.
I hate the cleaning fee. It’s become obscene.
Just everything about the model bothers me now.
Just everything about the model bothers me now.
As it should.
The original model I liked. You have an adu? Rent it for spare cash. Rent a spare room. Etc. it didn’t impact supply and let a lot of people earn a little cash. It wasn’t a business. It was an accessory. Now it’s a business.
The thing is, it was never the original model. It was what was marketed at us. The model was always dumping to monopolize the market. Perhaps the original software nerds didn’t have that in mind but the moment MBAs came along to “help them grow” the program was to win Monopoly in that market. And that was very early on since VCs were involved nearly from the get go in most of those cases. The original idea as you describe it ends at the singing of the VC contract.
It was the model for a very long time. It was all about renting excess capacity. It was a brilliant move. It wasn’t till much more recently people turned it into a business by buying properties just to air bnb.
Not sure when do you refer as recently but where I am this has been a common practice since at least 2015.
2013 for me.
Perhaps the original software nerds didn’t have that in mind but the moment MBAs came along to “help them grow” the program was to win Monopoly in that mark
So…… it was the original model. And yeah airbnb literally grew because of renting out extra rooms, it didn’t grow from turning entire homes into rentals. It became that much much much later.
The founder literally started it because he found it difficult to rent out his vacation home. Fuck him and his vacation home.
I get for vacation areas this is less of an issue but for places like ny city, San Francisco, etc it’s taking homes out of use.
It’s every bit as big of an issue for vacation areas / areas where tourism is the primary driver of the economy.
Take Tahoe or Mammoth Lakes for example: until the early 2010s it was still possible to move there without knowing anyone or having any other inside track, get a job (not your favorite or first choice, usually, but something to work from while you get established) and find your crappy first apartment or half-a-cabin or rundown shack or basement or ADU to rent.
That scenario is almost completely gone now and has been for ten years, plus or minus – depending on where each person sees the line that divides difficult from impossible. People making far less than a living wage now commute to both of those areas from an hour or more away. The sense of how “connected” or privileged one has to be to make it or even just scrape by in areas such as these has relentlessly risen to a level that has had an enormous impact on mental and emotional health and life outcomes in these areas too.
All of these factors were already big in the negative column balancing the very real positives of living so close to nature and preferred sporting activities, before the rise of the short term rental blight. But nowadays those negatives are practically off the meter.
I get for vacation areas this is less of an issue
Nope, this is the issue for housing in small towns/touristy areas. Most of the housing stock in our town has been scooped up for Airbnb/VRBO/etc, and has 1) limited housing stock for locals, 2) has raised housing purchase prices to unaffordable levels because of “profit potential”, and 3) limited availability of long term rentals that has also shot rental rates through the roof. In small towns, housing is already limited by geography, and so it just exacerbates an existing problem and completely screws local who likely don’t make a lot to begin with, because generally tourism and tourism-adjacent industries makes up the bulk of the available jobs.
Here’s a case study on exactly this if anyone is interested and you don’t mind the slightly unusual article format.
I was only ever interested in these company’s services as a way to save money. They are no longer cheaper than a hotel, so I would rather stay at a hotel.
I usually travel by car and with my dogs out of necessity.
Airbnb is the most cost-effective when you need a room that allows dogs.
The main Airbnb value proposition was trading some of the conveniences you get at a hotel for a significantly cheaper room.
When they are roughly the same price as staying in a hotel, why would you choose it?
The only time I’ve ever used an Airbnb was when I wanted a location that did not have a good hotel option. Which has been cabins in the woods, and beach front property. Outside of that, I would rather have the convenience of a hotel.
it costs more and offers less than hotels, landlord motherfuckers are asking me to do their chores for them plus pay for electricity and tip them for cleaning their own house i am paying for, to share with four other people?
take out your own fucking trash.
and the service fee for using autbnb directly is almost up to 15%.
no goddam way.
this message brought to you because of the assholes who sent me “so you know” messages about trash days and cleaning products.
Sounds great.
Allow Airbnb to return to it’s roots:
Small time short term rentals used when the owner is away. And for remote locations where no hotel exists.
Yeah, it was great to stay and a million dollar house on the top of a mountain next to a state park for a weekend. But I choose a hotel when I’m just going to a city for something.
I want to slightly hijack your comment to say how innovative lots of these services were when they showed up and how they all ultimately managed to become a corporate machine crapping on both customers and intermediaries.
I mean that, when they arrived, Uber, AirBnB, Glovo/Deliveroo/Just Eat/DoorDash all brought something new and potentially useful and parallel to existing structures (involving regular people on the ground which, theoretically, can make an extra buck), but then… They all went down the toilet (I suppose since they were all losing money at the beginning to establish themselves, they had to find some way to make money, but they all irreparably chose enshittifcation)
I’ve stayed at my share of Airbnbs booked by others, but never really enjoyed the feeling of sleeping in some strangers house. Also, disliked the impact of airbnbs on local housing markets. The idea of replacing long term housing with short term housing is completely stupid from a public policy perspective and a great way to ruin a city.
Additionally, I like being a customer, and anonymous. I don’t want to be rated by the host. I don’t want to be judged on whether I put my own towels in the washing machine before I checked out. If I’m paying, that shouldn’t be my damn job.
Also, airbnbs are random. Some are good, some are awful. Some hosts are fine, some are a bit too much. Hotels do vary, but on the whole, the experience is much more consistent.
To chime in on your anonymous comment, racism is a huge issue for AirBnB too. None of my brown friends are able to book one without the help of a white friend/partner, because of their names and the lack of AirBnB history.
For me, it’s almost always the cheapest/most convenient way to stay somewhere with a kitchen. And it may be an okay kitchen but almost always better than a hotel’s. That’s the part I find the hardest to replicate outside of Airbnb.
Short stay apartments are a thing, but you’ll typically only find them in big cities.
Exactly, I lost all taste for Airbnb when we were staying for 2 nights, and every 4 hours the owner was balsting me with text messages telling me I needed to rate them 5 stars because if I didn’t they wouldn’t rate me 5 stars…but I had to take out my own trash, put all towels and linens in the washer, and make sure to tidy up before I left or else I’d incur their “clean up fee”. Fuck that shit, I’m not paying you a shitton of money to clean up after myself. Especially when half the bathrooms have black mold and rotten water damaged wood around the showers, and you have to be extra mindful because this was a time when hidden cameras were common.
Cleaning fees are just overhead on staying now. But if you don’t tidy your rating will take a hit.
It’s a scam coming and going. But it’s often cheaper and with more selection on location. The last two, I think, are really what keeps them around.
Ability to zero in on location is definitely the thing that keeps me on the platform. I can’t say its always cheaper, it maybe in some cases but its often equal or higher than a budget hotel in my experience. The fact that I can get a unit with a kitchen and within walking distance of a few of my planned vacation activities is the reason I check it out.
Airbnb has been in a race to bring the worst of the tech industry’s profit consuming corporatism (no phone number, horrid customer service, lots of rules that nobody follows, privacy nightmares) to an industry that focused on hospitality - by definition a high-touch service - and we are all worse off because of that.
Not to mention the ‘hosts’ have been tacking all sorts of fees on top of your stay, and requiring people to do deep cleans, leaving a key in some lockbox a block away, etc.
At this point you just want to get a hotel even if it costs more instead of dealing with some of their shit. In a hotel you walk in, someone actually is there to greet you, there’s no expectation that you clean the room, etc.
Airbnb ruined their own product by letting the hosts ruin the experience.
they should be paying hotel taxes.
I’m not paying more money to get no-breakfast, and have to do chores, and have a 15% chance of crazy owner, and a non-zero chance of it being a scam, and have AirBNB corporate give me the run around.
I was solely airbnb for years, down to literally nothing now. Won’t even search the site anymore. Many reasons articulated by others, but just a pure garbage company and garbage “homeowners” who are mostly just vc conglomerates and bs fronts now - last time I looked, I saw a listing that was overpriced, but I was going to do it out of last minute need…
Host was named Miranda and showed profile pic of a smiling younger women. Listing text was written in her voice. I had a specific question that I sent and received an odd, cold form response, not in her same tone. Then looked and saw that Miranda owned most every property in this beachfront area? She looked pretty young, but okay, good for you. Looked further and found that “Miranda” was actually just the name of a property management group. That wasn’t her in the profile picture, she didn’t exist. She wasn’t going to answer my question, she didn’t give a shit, because she was… not.
Fuck you in your stupid greedy faces, hotels will do.
