Advances in communication have changed the world. They’ve changed the way we think about information, and about who owns information. Changed the way we shop, changed the way we travel, and changed the way we do business. The lines between merchants and consumers are blurring, and supply chains are not so much horizontal or vertical, as spiral.
The best description of the brave and ever-changing new face of businesses within the online environment is by Peter Diamandis in the book Exponential Organizations.
Three billion new minds will join the global economy over the next half-dozen years. The relevance of this is twofold. First, these three billion people represent a new population of consumers who have never bought anything before. Consequentially, they represent a long tail of tens-of-trillions of dollars of emerging buying power. If they are not your direct customers, fear not; they are likely your customer’s customers. Second, this group – the ‘rising billion’ – is a new entrepreneurial class powered with the lastest generation of Internet-delivered technologies – everything from Google and Artificial Intelligence, to 3D printing and synthetic biology. As such, we will see an explosion in the rate of innovation, as millions of new innovators begin to experiment and upload their products and services and launch new businesses.
Diamandis goes on to say that the only constant today is change, and change that’s happening at an increasing rate. ”Your competition is no longer the multinational corporation overseas,” he notes. It’s now the individual using the latest online tool to create, design, market and produce their latest innovation.
“As technology brings us a world of abundance, access will triumph over ownership.” – Salim Ismail
One such exponential organisation is Airbnb, which is using innovation, the online environments and access as game changers in the accommodation sector.
With over two million homes on its books in 34 000 cities in more than 190 countries, Airbnb is quickly evolving into one of the world’s largest short-term accommodation providers. More than 80 million guests have stayed in an Airbnb-hosted home since the company was founded a mere eight years ago.
Soon after graduating, Airbnb’s entrepreneur founder and CEO Brian Chesky was living in San Francisco, struggling to pay the rent. There was a huge design conference taking place in the area, all the hotels were fully booked, and the conference delegates were scrabbling for accommodation. Catering to the need, Brian and his co-tenants took three air mattresses out their cupboard, blew them up and rented them out as Airbed and Breakfast. And this clever idea that grew out of an immediate need to pay the month’s rent has turned into a multi-million dollar business.
For those who don’t know, Airbnb is a platform for hosts to list holiday and short-term accommodation, whether it’s a room in a suburban house, a caravan on an empty piece of land in the mountains, a cottage by the sea or a penthouse apartment. Through a few easy steps online, anyone can list their home on Airbnb – creating a profile, describing the offering and uploading photos takes a few minutes. Depending on location and availability, Airbnb even sends a professional photographer to take high-quality photos of any space, free of charge. Once a property is listed it’s ready to be booked by guests who enquire through Airbnb’s secure messaging system. Bookings are done online, and all payments are handled through Airbnb. The payment system is designed to make transferring money between guests and hosts as simple and secure as possible: Guests pay Airbnb when they book a place and Airbnb releases the money to hosts 24 hours after the guest checks in – so that the guest gets to confirm that, for example, the “sea-view apartment” actually does have a sea view. This helps ensure that both parties are protected and it’s all neat and tidy.
But how secure is it? Airbnb has established a whole battery of what it calls “trust & safety features”.
Guests and hosts verify their IDs by connecting to their social networks and scanning their official ID or confirming personal details. Detailed profiles and confirmed reviews make it easy to get an impression of whom you’re talking to. Money is exclusively handled through Airbnb’s payment system. As with other sharing economy services, finding ways to scale trust between peers is key to making the system work.
Of course, nothing in the world is entirely risk-free. There have been instances of guests not behaving the way you would want them to – but that’s not restricted to Airbnb. Ask any hotelier how many towels, kettles, hairdryers, TV remotes and even full sets of linen they lose every year. Somehow, with Airbnb, although the risk is there, it’s considerably less. People tend to think of hotels as faceless institutions, while Airbnb hosts are acknowledged as real people.
As a host, you’re guaranteed payment because the guest pays before they arrive. You can also request a deposit. And, even if you don’t take a deposit, Airbnb guarantees piece of mind through the US$1 million host guarantee that automatically covers hosts in the rare event that something does go wrong. Yes, automatically. And, while you can’t discriminate on the basis of race, religion or other intrinsic qualities, you can specify non-smokers, no children, no pets, no parties, etc.
Still need convincing? As an Airbnb host or guest you become part of a community that has bought into, and supports, a value system of mutual respect and honesty. The more you interact, the more your profile – and hence your reputation – develops. And you can choose guests by their profile as well, ensuring that the people who stay on your property have stayed in many other places before without using the doors as firewood, or holding trance parties in the garage.
The concept of holiday rentals is nothing new, but Airbnb offers you the flexibility to tailor what you offer, whether it’s your entire home or just a room, and offers in addition the security of that million-dollar host guarantee scheme in some markets, including South Africa. It also opens up the existing community or environment to a global market at the speed of an upload. This brings with it the potential of an additional revenue stream stemming from existing assets within a difficult economy such as South Africa’s. It allows for travel and experience-based learning on a budget that you can define. Airbnb’s ethos of “unlocking unique spaces worldwide” takes shape in the plethora of offerings across the South African landscape, and we can only look forward eagerly to what this business can do for us.
It’s best for you to establish what your estate’s rules and regulations say about holiday letting before you leap at this opportunity. Whatever the case, all Airbnb guests would be required to comply with an estate’s individual and specific requirements just as much as if they were the original residents.
For information or assistance about getting involved with AirBnb contact Estate Living.
*Ismail, S (ed) 2014. Exponential Organizations. New York: Diversion Books.