Some exciting industry news this week and a couple of other things to help the business flourish, including a box of chocolates!
Airbnb has lost its way. Even the chief executive agrees
A few news articles mentioned Skift's interview with Brian Chesky:
"It lost its way, as they say. Chief executive and founder Brian Chesky agrees.
“It wasn’t about empty homes; it was about people staying with each other,” he told travel news site Skift. The values got “watered down”, he added. “If I could do it over again, I would hold on to those values.”
This may explain a few moves, including back-to-the-house sharing, especially as legislation targets the STR world globally in many ways due to Airbnbs success. Some of this week's news highlights the ongoing challenges all managers and hosts should watch carefully.
England
For our "England" based readers, the 7th of June is a pivotal moment ending the government's consultation period. Anyone wanting background and to challenge or contribute can do no better than head to this link from PASCUK.
New York
Over the pond, we are witnessing even greater hostility toward Airbnb as the company has had to issue a lawsuit to challenge the latest rules. In a lawsuit that Airbnb filed Thursday last to block the implementation of Local Law 18, Airbnb stated:
“The registration scheme chills short-term rentals by requiring extensive and intrusive disclosures of personal information and forcing open-ended agreement to labyrinthine regulations scattered across a complex web of laws, codes, and regulations.....some of the implementation rules, adopted last November and set to be effective in July. Airbnb argues these are particularly onerous and amount to a “de facto ban” on its business in the Big Apple, one of the largest tourist destinations in the world.
It would appear Airbnb is guilty of its success, but like many cities, the success of a single company and the associated problems have dragged others, especially long-standing smaller and professional businesses, into challenging positions.
Finland
The home of 50,000+ lakes, a well-organised and industrious nation looks like it, too, has had enough of the "Airbnb" crowd:
"Finnish cities and municipalities have banded together through the Building Inspection Association to introduce a change of rules aimed at homeowners who turn their properties into professional or permanent short-term rentals. One of the new rules will require the owners doing this, to apply for a permit as a business operation."
The Taxman cometh
This is a headline item from the UK's Daily Mail. Love the paper or not, it highlighted both the disclosure by Airbnb of bookings and hosts and added the legislative challenges.
Airbnb hosts face tax probe spanning six years of income - with harsh penalties for property owners if they fail to pay income duties.
New Business Opportunities
We will also undoubtedly see a rise in companies providing services to facilitate and inform owners and keep them compliant. Businesses such as Rentalscape or ShortTermLet Services in Scotland
The big money news this week was HostAway.
This is a sizeable amount of money by any standard and illustrates confidence in the sector. The question is really about the deal. Is it an "acquisition" by another name or a pure investment to be used to challenge the Guesty war chest? One thing is for sure, every manager and host+ will be a target. Expect more marketing, but whichever way this has played out, well done, Marcus!
"We are thrilled to announce that Hostaway, the leading property management software for short-term rentals, has successfully raised $175 million in a recent funding round led by private equity firm, PSG. This significant investment is the most a company has ever raised in our industry, and is a testament to our company's incredible growth, the profitability of our business, and enormous potential of the space."
For our Asian readers. Penang bans almost all short-term rentals on the island!
It's not just the EU and USA under scrutiny; the legislative disease has a global creep, and Penang is feeling the pinch.
"GEORGE TOWN: Penang has effectively banned all forms of short-term rental accommodation (STR), such as Airbnb or booking.com stays, at residential units on the island, effective immediately. Penang Island City Council (MBPP) mayor Rajendran Anthony said the ban covered all private residential properties. It excludes six types of commercial properties — serviced apartments, small office home offices (SoHo), small office flexible offices (SoFo), small office virtual offices (SoVo), office suites and duplex offices. However, those planning to offer the STRs in the commercial categories must obtain the approval of their respective joint management bodies (JMBs) or management corporations (MCs). At an annual general meeting, they must obtain a 75% “yes” vote from other residents."
More hotel chains are continuing to move into the rental space.
With the Marriott leading the way with Homes & Villas, we can expect more hotels to follow suit and cater to their loyalty programs and the fact that guests often want to stay in larger, more family focussed accommodations, especially at the top end of the market. We have seen the Dusit chain dip its toe in the water acquiring Elite Havens, and now we see the Mandarin Oriental slowly adopting its strategy:
"The Mandarin Oriental Exclusive Homes portfolio has seen 150% growth in its first 12 months of operation with plans to grow the portfolio to over 100 homes within the next 5 years. Mandarin Oriental Exclusive Homes seeks to expand its footprint of luxury leisure destinations in Europe, for both winter and summer breaks, as well as broadening the portfolio in Asia. The Group has also identified the United States and the Caribbean as key regions for future expansion."
Skift Ecosystem Graphic is interesting!
Skift recently complied this graphic below and was based on the following premise:
"To find the 250 most influential companies, we compiled a list of ~430 companies operating in the short-term rental industry. As these short-term rental companies range from large, multinational, publicly listed companies down to one-(wo)man, bootstrapped startups, we had to find some common denominators to compare companies. We used LinkedIn to track followers and employees to find the most prominent 250 companies. With most companies working with other businesses rather than consumers, LinkedIn is the best platform to track prominence."
We can all probably see some of the errors, e.g. I-Prac is a large accounting, and FinTech business and bubble sizes are not always correct, but nice to see an infographic that the participants will share on Linkedin :))
A couple more things that were sent to me:
If you want to add a calculator (always a good click item), this is the site and toolset to use. Calconic
This short video, referring to a famous Tom Hanks film, made me laugh. Before you click, guess which one!