I get it, the promotion of sites like AirBnB follows this sort of story – You book a room with Dave in Paris. Dave meets you at the door, gives you a bottle of his favorite wine and agrees to take you out for dinner and drinks with his mates that evening. Through booking with Dave, you get to sample his lifestyle and see the city through his eyes. This is a great story and one which AirBnB have morphed into their ‘Belong Anywhere’ slogan. How much truth is in it though? Not much.
Sure, there are hosts that exist like Dave but they are few and far between. Ultimately, people are busy. People have jobs and their own lives. People do not have the time to go through this process with every guest nor does every guest want this type of experience. The sharing economy movement would have you believe that hosts like Dave make up the majority of hosts opening up their homes to travelers. This is a falsehood when looking at the numbers and when people do look at the numbers they see the truth. This is a game for property managers and professionals. A way to extract as much as much money as possible from the sharing economy popularity wave.
Are Multi-Property Hosts Bad for the Industry?
Recently, I came across an article in the Guardian. You can see it here. The title of the article focuses on Barcelona and how one account on AirBnB is making 33,000 EUR per night. They go on to explain that the 10 biggest hosts manage 996 properties and 4,300 hosts operate more than one unit from the same account. The tagline for the article is ‘Apartment platform accused of becoming marketing site for big hotels and holiday rental agents’. The question is, is this such a bad thing and should it be demonized?
The Guardian obviously believes that this is a bad thing but in reality is it? One of the main issues that come up with short term rentals over and over again is regulation and how every unit is so different. You might book somewhere and have a host who doesn’t care, is inexperienced or simply doesn’t understand the can of worms they have opened. This leads to a bad experience and likely someone who will steer away from booking a short term rental again.
You realize pretty quickly in this industry that reputation matters. You need happy guests, you need happy neighbors and you need a happy business. Even if you rent out 1 unit, it still is a business. Property managers and commercial operators understand this most. Most of them have invested into complex systems and are constantly innovating and taking on feedback to ensure they stay on top of the game – shameless plug for the new tool I created – BnBChatbot here! Reputation matters. Using technology helps to keep your reputation high.
The Sharing Economy Illusion
It is great spin and marketing to put short term rentals as part of the sharing economy. You have people with property utilizing their assets to make returns that they need to get to make the profits they want to make. This is the same for an individual renting out a spare room to help pay the mortgage up until the investor with 4 homes looking to hit 15% y-o-y returns. Both cases see individuals wanting to maximize the returns to reach their goals. There is no sharing involved. There is cold hard cash changing hands and that is what matters. Can we put the myth to bed that short term rentals belong to the sharing economy? It simply is a ludicrous ideal.
The properties that perform best in the short term rental market are those which are managed in a professional manner and which have the processes in place to deal with all of the eventualities of the market they are serving. The more mainstream that short term rentals become as an alternative accommodation option to hotels, the more people who will give them a try. A lot of the future success or failure of short term rentals hinges on these first experiences.
Whilst there are of course some bad apples, property managers on the whole look to run a professional operation with checks in place to ensure cleaning is done to a high standard, check in is set up correctly and efficiently and the guest has all the information they need to arrive and have a happy stay. I am not saying that individual operators are unable to do the same or better because they obviously can but it can be more of a random experience going for a host who is new to the game than a property manager with hundreds or thousands of reviews.
Thus, in conclusion, why do property managers get a bad rap in the media? If there is money to be made in anything, the entrepreneurs and opportunists will come to make that money. The ones with no clue will soon be found out leading to a professional landscape. This is what happens in the short term rental industry and will continue to happen with consolidation of inventory and ‘mega managers’ becoming the norm. Hello Vacasa and your 200 million in funding since 2016.