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.”