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Airbnb is the new black. The future’s Airbnb. The future’s black.

In the world of business nothing works if everybody does it.

Businesses need an edge if they are going to succeed. They need a unique selling point (USP). Something that makes them stand out from the crowd.

When a company comes along with a new USP they disrupt the established way of a marketplace and, if done correctly, make that marketplace their own.

These disruptors come along with an innovative service or product and over a period of time they destroy the competition.

Wholesale.

Google did this to research libraries, Skype did this with long distance phone calls, iTunes did it to record stores and Apple prevailed again across an entire generation of mobiles with the launch and evolution of the iPhone.

Each of these companies went from disruptor to destroyer.
If they didn’t destroy the competition completely then they certainly reshaped it, in it’s entirety.

More recently we have seen the rise and rise of Uber and Airbnb.

The rise and rise of Uber and Airbnb

The difference here is that neither of these companies has a real service or product of their own. They have “merely” branded other peoples belongings.

Both of these companies are currently making the transition from disruptor to destroyer.

Let’s look at Airbnb now as you may not quite be aware of the degree of destruction that is taking place across the vacation rental industry.

I wrote an article a couple of weeks back that highlighted a 100% increase in Airbnb listings, in the last 12 months, on the small island where we live. Other owners and managers wrote to me confirming similar, if not higher (10 fold in some cases) figures across the globe.

[pullquote align=”full” cite=”” link=”” color=”” class=”” size=””] Even so, I was still thinking “disruption”. Until I tried an experiment. [/pullquote]

I logged into Twitter, the land of the mobile wielding masses.

Like it or not the Twitter stream paints an instant, moving, picture of the first world. A sort of live CAT scan of generations X, Y and Z.

Anyway, using Tweetdeck. I pulled up Twitter searches for VRBO, Flipkey, Homeway and Airbnb. I had each search column next to each other on my screen.

Here’s what shocked me and got me thinking…

To recap,

Airbnb dominate Twitter 600

Tweets are literally pouring in from San Fransisco and Japan, from Spain and Cuba and everywhere in-between.

That’s over 6,000 Tweets a day.  – FREE 3rd party marketing on super steroids.

Compare that with 200 for Homeaway.

[pullquote align=”full” cite=”” link=”” color=”” class=”” size=””] Airbnb is receiving 30 times more online chatter than it’s main competitor.   [/pullquote]

I started to look a little deeper…

And I found that Airbnb really are destroying the competition.

Here’s a quick heads up…

  • They are already listing over 1,500,000 properties (that’s a massive jump from fairly recent figures).
  • In 34,000 cities
  • In more than 190 countries
  • [pullquote align=”full” cite=”” link=”” color=”” class=”” size=””]With over 40 MILLION Airbnb guests already[/pullquote]

They are crushing everyone on social too…

social media2

  • Airbnb’s Facebook page has over 2 million likes, almost double the likes of Homeaway. VRBO have 83,000 likes and Flipkey have 205,000, both under 1/10 th of Airbnb’s likes)
  • 18,000 follow them on Pinterest (about the same as Homeaway).
  • On Google Plus Airbnb have 2,670,759 followers compared to Homeaway’s 5,307 followers (that’s 500 times more!) (even I have more followers on G+ than Homeaway!).
  • Airbnb have 528,000 followers on Instagram compared to 14,800 followers of Homeaway (that’s a whopping 35 times as many followers!). Vrbo and Flipkey are non existant on Instagram.
  • When it comes to Youtube…

148bf44e-b00c-49e1-8d41-b5b23e5ae755

These figures show a staggering level of dominance.

Then when you factor in facts like this…

[pullquote align=”full” cite=”” link=”” color=”” class=”” size=””]”Social media has suppassed porn as the number one activity on the internet” – Business insider[/pullquote]

You really start to see the huge distance between Airbnb and all of their competition.

Wait, it get’s more amazing…

LexiconSpecimen

Airbnb is literally the talk of the planet.

Airbnb has even become a verb. No one VRBO’s or Flipkey’s but people do Airbnb. They really do. We are Airbnb hosts.  My sister is Airbnbing in Berlin next week. Maybe you plan to Airbnb yourself.

You can even buy Airnbnb gift vouchers – Genius (I just love that idea).

That in itself is amazing.

But there’s more… The media even refer to other companies as “The Airbnb of this” or “The Airbnb of that” (the trouble for us, as vaction rental professionals, is that Airbnb are the Airbnb of our industry).

Anyway – People are Airbnb mad.

No wonder the company has been valued at $25 Billion!

Where does this leave us, the vacation rental owners and managers?

Where does this leave us?

Well in short… we are in trouble. (I rewrote that a couple of times).

A whole lot of trouble. We are neck deep in do do.

Everybody’s signing up. Everyone’s Airbnbing. Everyone’s sharing their Airbnb stories, photos and reviews.

So, what can we do?

Well, we can call the operator and complain about bad service or we can Skype.

We can sit around playing with our predictive text or we can buy a smartphone.

We can bemoan a lack of bookings coming from the more traditional channels or we can board the Airbnb express, because as sure as eggs is eggs this company are in the throws of destroying the competition.

All competition.

You may think that Airbnb is for couch surfers in an attic somewhere but it’s not. There are plenty of “traditional” vacation rentals listed and these properties are getting bookings. Guests are talking about these properties too.

So if you haven’t listed on Airbnb yet I strongly suggest that you sign up sooner than later before the company destroy the companies that you are listing with currently.

As the saying goes… You have to be in it to win it.

Where to next?

Join us next week where we look at the very dark side of the consequences of these figures.
We also look at Airbnb’s USP and how we as VR owners and managers can leverage that to our own advantage.

Part two has now been published and you can read it here

15 thoughts on “Vacation Rentals – From Disruption To Destruction

  1. Nancy says:

    You are right about airbnb. We may have to go that direction. I want more control than they offer but want to book.
    VRBO wants to handle the money but have allowed me to handle it so far. Maybe they will continue to let me receive the deposit & rate if they start loosing customers.
    Thanks for your input.
    Nancy

    1. Alan Egan says:

      Pleasure Nancy,

      Thanks for your feedback. Good luck with your bookings

    2. Would love to get on Airbnb but the lack of direct communication with my guests coupled with the fact I need deposits upfront, make it impossible for me to work with Airbnb.

      1. Alan Egan says:

        Fair enough Paola, if it doesn’t fit your business it’s best not to use it.

      2. Peter says:

        wrt. this comment:
        >> the lack of direct communication with my guests

        I never understand this statement when referring to AirBnB (and may people make it). I communicate directly with my AirBnB guests and it is a requirement when booking with me to provide their full name, mailing address, e-mail address, and cell phone number.

        I also require them to pay the taxes for the stay directly to me.
        I’ve never had an issue with any of the above.

        I think there is a good degree of misinformation about how one *must* transact with guests on AirBnB. The fact is, you — as the owner — still make the rules.

        wrt.
        >> I need deposits upfront

        It’s an interesting requirement. I always took deposits up-front in the past as well but, from a business POV, it really makes no difference to me as long as I’m assured of receiving it. I can’t recognize the revenue anyway until I’ve delivered the service. (Unless you need the cash-flow to sustain your business or if you recognize the deposit revenue as soon as the reservation is past the cancellation date for refunds, in which case that is a legitimate concern).

        1. Alan Egan says:

          Good points Peter, thank you.

      3. John says:

        I have used airbnb since it started in the UK in 2012 with great success and I find the communication with airbnb guests infinitely better that some other portals, notably booking.com where they rareley respond! The fact is that many people can’t even be bothered to say “thank you, for your message/comprehensive check-in instructions/etc”. I see other VR hosts on the phone to “timewasters”, the undecided and occasionally the scammers and give thanks that my phone number is not available.

  2. Jan Ferry-Axman says:

    Excellent little analysis, and very true! Can’t wait for next week.

    1. Alan Egan says:

      Thanks Jan, watch this space. Have a great weekend

  3. Peter Kim says:

    Interesting analysis, but I’m not sure you can conclude that Twitter and YouTube activity means that AirBNB is winning the vacation rental market, at least for us. Our renters are mostly 45 or older. Many start their search at homeaway or vrbo directly and are certainly not doing so in Twitter or YouTube. YouTube is the 2nd most popular search engine, but what is searched is very topical, and I’m guessing that finding their vacation rental is not something they expect from video, but a marketplace.

    If they are looking for Stowe Vacation Rentals in Google, the top natural search results are VRBO, Homeaway and Flipkey. We have a large home that we rent that tends towards large, multigenerational family gatherings, so the “buyer” isn’t your typical AirBNB customer, but the older demographics of Homeaway. Yes, in coming years, we’ll be talking to the current AirBNB customers as they age, but it’s not imminent for us.

    Thoughts?

    1. Alan Egan says:

      Thanks for you insight into your situation Peter,

      That’s a beautiful property that you have and I love the photos. Great staging.

      The fact that 10 of Airbnb’s videos have been viewed a total of 37 million times surey indicates that people do search for vacation rental information on Youtube.
      But you are dead right, it’s not one size fits all. City based accommodation will always be better suited to their model but there are an increasing number of people using the site in order to find all sorts of properties in all sorts of locations.

      About half of our Airbnb guests have been in their 40’s, 50’s and 60’s but they have been mainly couples as opposed to larger groups like you are looking for.

      Thanks again, Alan

  4. I’m not sure that I agree with you, Alan. Sure, AirBnB are killing it in terms of publicity and their listing uptake grows like a bramble. Most of the houses listed with us are on AirBnB too, but we are getting more bookings – most likely because a customer can call us and find out about 30 properties in Cairns from the one phone call. It’s far quicker for the customer than emailing (via the AirBnB internal email system) every property owner or manager of each property that the customer is interested in.

    While I am full of admiration for the achievement’s of the AirBnB team, they have a lot to live up to now that they are valued at $25 billion. The lenders are going to want a return on their funding and that can only come from the commission. Their model has, so far, not been troubled by the fact that the customer pays the commission. Effectively, booking through AirBnB is around 10% more expensive than booking through other OTAs because most owners do not have a different price with AirBnB and their other listing sites. It says a lot for the cleverness of AirBnB marketing that a 10% price difference is swallowed seemingly without noticing by customers. Presumably the customers consider that the “guarantees” that AirBnB offers are worth that difference. Charging the customer the large commission and the owner the smaller Paypal fee is a devilishly clever way to get as many owners on board as possible.
    However, once the AirBnB love and press adulation dies down, customers may think a little harder about what they are paying for.

  5. Miguel says:

    Also keep in mind that HomeAway/VRBO specialize in just vacation rentals. This helps our cause because most stays are generally longer resulting in less grunt work turning over 2 night stays.

  6. John says:

    Here’s the % share of gross income by web portal since Apr 2015 for a two bed apartment in Edinburgh, the festival capital of the world!

    Holiday Lettings – 6%
    LateRooms – 0%
    Wimdu – 0%
    airbnb – 48%
    Booking.com – 20%
    Edlets – 2%
    HomeAway – 25%

    HA was ahead of the pack at the beginiing of the year, to be followed closeley by booking.com when that wen live in May but airbnb has now regained its traditionally dominat postion. I expect booking.com to fill the low demand period running up to March 2016.

    Where Homeaway and booking.com score over airbnb is that guests do not need to pay in full on booking. So, HA is good for the high value and popular Fringe Festival August period where overseas guests book 6 months+ in advance. airbnb scores with lower value and reservations several weeks before check in.

    Overall, the level of appreciation of airbnb has been transformed totally in the UK over the last 12 months from “What’s that?” to “Oh yes, I tried it/know some who has used it”. Last year it was all bad news for airbnb Hosts in the Sunday papers, now people are actually using it.

    1. Alan Egan says:

      Thanks John,

      Really great information. I really appreciate you sharing the figures, they make interesting reading. Would love to know how these percentages pan out over the next 12 – 24 months.

      Thanks again

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