Commercial operators are the future of short-term rentals: insiders

Leaders in the space compare Airbnb to eBay, Stubhub, which became increasingly professionalized

New York /
Apr.April 15, 2016 05:36 PM

The future of the “home sharing” on sites such as Airbnb might end up involving a lot of shrewd capitalism as amateur, part-time “hosts” are gradually displaced by hotel-like investors and operators.

That’s the picture that emerged at a panel featuring executives from onefinestay, rented.com, tripping.com and Oasis Collection, who spoke of the rapid expansion of short term rental investment nationally and globally. The insiders drew comparisons between sites such as Airbnb and the likes of eBay and StubHub, which, over time, became dominated by organized, commercial players.

“eBay started out as soccer moms selling things to other soccer moms,” said Andrew McConnell, founder and CEO of rented.com, a service that connects homeowners with property managers, at the Serviced Apartments Summit Americas Thursday. “Today, 80 percent of eBay people are ‘power sellers.’”

Tripping.com founder and CEO Jen O’Neal made roughly the same point about online ticket marketplace StubHub, where she headed up marketing for five years.

“Real estate investors are asking us where to buy buildings,” O’Neal said. “They’re aiming for cap rates as high as 18-20 percent”

A spokesperson for Airbnb declined to address the predictions directly, but reiterated the company’s oft-stated opposition to such practices.

“Airbnb is a people-to-people platform that connects local hosts with visitors from around the world who are looking to see the city from a New Yorker’s perspective,” the spokesperson said. “We oppose illegal hotels; they’re bad for our community and do not offer our guests the authentic experience they seek.”

About 2,500 of Airbnb’s whole-unit listings in New York City were rented for 180 days or more between November 2014 and November 2015, according to data the company released in December.

The panelists on Thursday also predicted a future where major travel and hospitality companies – including hotel chains and travel and hotel booking websites – became major players in operating and marketing short-term rentals.

Evan Frank, co-founder of onefinestay – which was bought by Paris-based AccorHotels for $169 million earlier this month – predicted sites such as Expedia.com will soon feature “home” panels on their homepages to market apartments in residential buildings.

The panelists acknowledged, however, that in some cities – New York for example – the transition would require major regulatory changes.

“New York is one of the cities where the most catch-up is required,” said Frank. His firm, he said, is committed to helping the process along. “I spend 25 percent of my time with city and state governments.”

McConnell agreed, saying that “educating” stakeholders such as governments and landlords was vital for the industry. “They have people whispering in their ear,” he said. “You can’t just sit back and wait for the right answer to appear.”

While O’Neal predicted short-term rentals would be entirely legalized in the U.S. within 10 to 15 years, Parker Stanberry, founder and CEO of vacation rental firm Oasis Collections, which is also partly owned by AccorHotels, said easing restrictions was good enough.

“We’re for sensible regulation,” he said. “We’d be OK with requiring a minimum stay of five days, as they’ve done in Madrid, though we’d maybe prefer three or four days.”

All the panelists said they favored taxing short-term rentals like hotels.

“Short term rental, extended stay, hotels… I think they’re false constructs,” said McConnell. “It’s all accommodation.”

He and Stanberry both acknowledged that short-term rentals do likely remove rental units from the market, as critics have charged, but argued short-term rentals only deserve a small part of the blame for affordability problems in cities such as New York and San Francisco.

Still, the people may already have spoken.

“Airbnb is like Napster,” McConnell said. “Now that the world has tasted Airbnb, it doesn’t matter what the regulators do.”


Related Articles

arrow_forward_ios
From left: Mayor Bill de Blasio, 54 West 39th Street, 62 Grand Street, and 208 West 30th Street (Credit: Google Maps)

The Airbnb crackdown continues: City targets three more buildings

The Airbnb crackdown continues: City targets three more buildings
Mayor Bill de Blasio and Stanley “Skip” Karol, an Airbnb host (Credit: Getty Images and Youtube)

Airbnb host narrowly clears hurdle in First Amendment claim against city

Airbnb host narrowly clears hurdle in First Amendment claim against city
A West Village Airbnb listing (Credit: Airbnb)

Airbnb Luxe launched without listings in one of their biggest potential markets — why?

Airbnb Luxe launched without listings in one of their biggest potential markets — why?
Airbnb CEO Brian Chesky (Getty; iStock)

Airbnb targets as much as $33B valuation for IPO

Airbnb targets as much as $33B valuation for IPO
Domio's CEO Jay Roberts and Chief Strategy Officer Adrian Lam (Photos via Domio)

Short-term rental operator Domio shuts down

Short-term rental operator Domio shuts down
Airbnb CEO Brian Chesky (Getty; iStock)

Airbnb is offering hosts company shares. But millions may miss out

Airbnb is offering hosts company shares. But millions may miss out
Airbnb CEO Brian Chesky (Getty)

Inside Airbnb’s IPO pitch

Inside Airbnb’s IPO pitch
A study found that NYC renters lose $178M per year due to long-term rentals being reallocated to the short-term market (Getty; Pixabay)

Airbnb costs New York City renters $178M a year: study

Airbnb costs New York City renters $178M a year: study
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...