When roommates Brian Chesky and Joe Gebbia decided to throw an air mattress on their living room floor and offer breakfast to travelers to help make ends meet in 2007, they had no idea they were about to start a billion dollar global corporation. This simple idea of sharing their home for a small profit soon became the foundation for Airbnb, which was founded in 2008.
The original website was basically designed to serve as a matchmaking service for travelers who were looking for an alternative to hotels in busy, saturated markets and home or apartment dwellers who had a little space to share.
Many hosts back then enjoyed the opportunity to meet new people, share stories and meals, and basically develop some short, but interesting relationships with their guests. Renters were also happy to chat with their hosts while sharing their homes. Most of the relationships between hosts and guests were loose, friendly and informal.
Growth Means Regulation
As in many cases, a company that grows as quickly as Airbnb will find that success comes with a price tag. The value of Airbnb exceeds $30 billion after only nine years of its founding. More and more state and local governments are looking for ways to get their cut of the pie. Taxes and fees that are an ingrained part of the hotel and hospitality industry are quickly being extended to Airbnb hosts. These taxes and fees must be passed through the organization and the hosts to the end consumer, making it tricky to determine who and when to collect the extra payments.
The company's reach spread globally, and with that growth, comes the expectation of corporate practices in terms of booking procedures, financial arrangements and professional services provided. The global nature if the growing business brings its own challenges with language, currency and local customs and traditions. The larger the number of people involved, the more likely that serious problems can arise. Airbnb management practices are now evolving to protect the corporation, the customers and the hosts.
Today, more Airbnb hosts are being encouraged to act professionally in offering their extra rooms or entire homes. For example, hosts are asked to clean and arrange bathrooms and bedrooms to resemble hotels. They are also encouraged to carry a more professional and distant relationship with their guests.
Why? The company is working to continue to expand and must reach beyond the young adult looking for a cool, cheap place to crash for the night. Airbnb must tap into the market of people who are used to the professionalism and predictability of hotels in order to fuel its continued growth.
What does this mean? It means that people want to automatically book an Airbnb room or house online. It means they want their reservation guaranteed. It means they want clean sheets, towels and privacy. It means they want hosts to function as hotel front desk clerks, providing requested information courteously and efficiently.
For the relaxed Airbnb host, these new regulations and rules can be a real drag. They preferred being able to check out the reviews of their guests before accepting them into their homes. Many enjoyed talking with their guests during their visits. Others preferred the "my home is your home" environment vs. the sterile formality of a let's-be-a-hotel environment.
For those hosts that are interested in using the Airbnb platform to make money, the changes are often welcomed. The instant booking features, check-in, check-out and cancellation policies are familiar to the frequent business traveler, and some hosts are finding that they can increase their bookings more easily with these features in place. These tools help automate the entire process for hosts looking to tap into that same highly professional, hotel-frequenting market.
Consistency Is A Goal
When travelers book a room at a chain hotel, they are fairly certain of what they can expect. Most hotels in a chain have consistent buildings, amenities, and services. They even have the same decorations, toiletries and breakfast menu items. With the possible exception of geographic location differences, travelers know what they are paying for.
Other players in the hospitality industry including bed and breakfasts, camping sites, or extended-stay hotels know they must offer consistency in their services as well in order to compete with the well-entrenched hotels and suite companies. They have worked to reach the same bar in terms of service, professionalism and cleanliness.
As Airbnb goes after a bigger chunk of this hospitality market, it must be able to guarantee some level of consistency as well. For Airbnb management, this is a significant challenge because every home is different as is each of the company's two million hosts.
Control is much more difficult to obtain because hosts are not employees and consistency can only be encouraged and rewarded. As a result, Airbnb has recently redesigned its site with hosts in mind and started including a host in its board meetings. Its rating system is used to provide some third-party validation to the quality of hosts, rooms and homes. Airbnb created the "superhost" designation in 2009 to categorize those hosts that provide exceptional service so that customers could choose professionalism with their dollars.
In addition to implementing programs that encourage consistency in service from hosts, Airbnb is also continuing to implement automated site tools to provide a more professional, formal interface with customers. Today, customers can opt to instantly book a room or home without waiting for hosts to approve their reservation.
One of the more recent initiatives from Airbnb revolves around hospitality training. The company recently hired a seasoned boutique hotel expert to establish standards in regards to communication, cancellation and cleanliness.
The company has also added pricing tools that allow hosts to increase and decrease rates depending on seasonal demand as well as tools that make it easier to manage cancellations as well as check-in and check-out routines. All of this technology, processes and procedures have been borrowed from the playbooks of the major hotels.
Travelers can now isolate those accommodations that are considered business ready, which include standard amenities like Wi-Fi and a hair dryer.
Hosts Have Requests, Too
As Airbnb continues to expect their hosts to increase in professionalism and participate in more hotel-like, corporate behavior, the company will be expected to carry its end of the bargain as well.
In the early days, hosts did not expect much from Airbnb for its site fee. They trusted Airbnb to manage the monetary transactions and provide some other minor services.
Today, Airbnb is adding other ways it can help protect its hosts from damages caused by inappropriate guests. Currently, it offers a host protection insurance policy in 15 countries. This policy provides liability coverage for bodily injury or property damage.
In the future, hosts may have other demands that Airbnb will be expected to put in place while its growth and conversion continue.