A recent report by ‘Leader Networks’ showed that over 80 per cent of accommodation seekers use online search tools. This shift in the real estate market paved the way for Airbnb and now, as a £23 billion company, Airbnb has grown to completely take over the short-let marketplace.
On its website Airbnb defines itself as, “A trusted community marketplace for people to list, discover and book unique accommodation around the world.” Currently, Airbnb is active in 65,000 cities across 190 countries with further plans to expand. A major reason is the convenience of the platform; providing a simple way for anyone to monetise (a part of) their home. Before Airbnb began in 2008, a short-term rental could get quite complicated: advertising, taking payments, carrying out viewings, dealing with disputes; all processes that made running short lets difficult have been simplified by Airbnb.
The emphasis on security and trust is what made Airbnb standout from its competitors. Other rental platforms were not perceived as trustworthy for would-be short let landlords to risk inviting strangers into their homes. Before Airbnb became so prominent, platforms such as ‘Couch Surfing’ made some impact, but never truly monetised its size to any scale close to that of Airbnb. Simplicity and security were unique features of Airbnb, as well as the control Airbnb gives users compared to other platforms.
Millennials like having services readily available – even if it costs more. They don’t want to wait for the paperwork!
Homeowners can set their own charges, add photos, descriptions and captions to promote their properties in whatever way they like. Similarly, accommodation seekers can refine their searches by keywords, host language, property type and more.
The ability to refine a search is ideal because of the diverse range of people that use the platform for different needs. A family may want a holiday home for a week, a businessman looking for a city apartment or traveller seeking a spare room with a local they can engage with. All these individual needs can easily be met in one simple platform.
A new trend is that people have been beginning to use Airbnb for longer-term lets, with people staying in the same Airbnb for as long as a month. The reason for this is convenience. If someone wanted a room tomorrow in London for a month, it can be instantly booked within a few minutes on Airbnb. In comparison, the process of researching, arranging and viewing a short-term let for a month can take a month itself. This begs the question of whether Airbnb could have an impact on the traditional rental industry. If consumers are leaning towards Airbnb, will Landlords forget long-term lets and move to letting out their rooms on Airbnb? It will depend on whether they are willing to give up a guaranteed stable income for the unpredictability of seasonal changes in the short-let market.
Despite the unpredictability of short-term lets, there is no denying that there is money to be made. It was recently reported that travel and tourism now account for almost 10 per cent of global GDP with $7.2 trillion US in revenue, making the sector bigger than the oil industry. As the travel and hospitality market continues to expand, millennials and Generation Z embraces home sharing – 60 per cent of all guests who have made a booking via Airbnb have been millennials and their number has grown by 120 per cent in the past year. This new millennial ‘sharing economy’ is reflected in the growth of other industries such as Uber and Deliveroo. Similar to these services, Airbnb allows people to provide a service, in this case rent out a room or whole property, to anyone in the world without the need for a middleman or onerous contract. These ‘instant services’ put consumers in touch with what they require in real time, even if it means paying more. Millennials are used to having things readily available and are not prepared to wait like consumers of the past.
Many industries have transformed traditional ways of operating by upgrading to an instant service using app-based platforms and this is particularly prevalent within the property industry, where property managers use apps to simplify the processes of property management. Amongst these, our product, Arthur Online is a very successful cloud-based platform that enables property managers to respond instantly and solve problems fast from anywhere in the world, it with tenants, contractors, property owners or letting agents.