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But this is exactly what's happening. The natural way of progression. Landlords realized that they can earn a lot more through AirBnB vs classic renting out. The only problem was the management of the places getting more annoying.

The next step was then to have companies take over this missing segment. Landlords can now give their property to a AirBnB management company that makes sure it always get reposted, the key given to the right person and so on. Profit is still higher than what the landlord would make through normal renting out.

I worked for a real estate startup and we had A LOT of overseas investors solely wanting to buy properties for renting them out on AirBnB.

In the past I also ended up in one of these managed places by accident once. It was a big house with a bunch of walls put in between rooms to rent out each little part of the house as a separate AirBnB room. The avatar and description made it look like it's the house of a young woman trying to make an extra buck.

I don't like it either and think it's a little bit sad that things progress this way, but it was unavoidable. I'm crossing my fingers that this won't harm the normal renting and guesthouse/hostel market too much.

AirBnB shouldn't be a machine too make rich people even richer and the apartment search for the normal guy harder and harder.

Not sure how your fifth paragraph follows.

First, it is at least somewhat avoidable. Banning management companies would be one solution. Only allowing users to post their homes for a fraction of a rolling 12 month period would be another. Only allowing users to have 1 or 2 simultaneous postings with different street addresses would be another. These are the things Airbnb should do and doing so honestly probably would have prevented them from getting totally screwed by NYS/NYC legislatures, which leads to my second point.

Of course it harms the normal rental market. What else could it possibly do besides that? Not only that, but the backlash against the system harms those of us who do wish to actually legitimately rent out our homes while we're not in them. Airbnb should've been more proactive about this from the get go, but I don't think it's necessarily too late. With this news, though, it seems they don't even think this is a problem despite getting them outlawed in the largest city in the US.

It's really a bummer, but it's not unavoidable and not unfixable.

>Landlords realized that they can earn a lot more through AirBnB vs classic renting out.

In many cases by circumventing hotel regulation. We seem to like flouting the law, provided it happens in Silicon Valley and not Wall Street.

AirBnB is no longer my go-to; it's just another place I check along with travel and hotel aggregator sites. But at least with hotels I know what I'm getting.

"we had A LOT of overseas investors solely wanting to buy properties for renting them out on AirBnB."

Wow, so people who don't even live in the country are buying housing to rent to other people that don'e live in the country or city.

Meanwhile people who live, work and pay taxes increasingly can't afford rents in their hometowns.

This is essentially what happened to eBay, for example - at first it was a marketplace to connect individual buyers and sellers, but over time shifted to favour the bulk sellers. When the internet was young there was a lot of excitement about it being used to disintermediate the big corporations, but what seems to be happening is the "reintermediation" of big new internet companies.

It's the classic problem of regulatory capture applied to a privatized industry: the entities that are most engaged with the regulator (the regulator, in this case, being a site like eBay or Airbnb) are most likely professionals. Because their voices are louder and more coordinated, they are more likely to be listened to than a relatively low volume of one-off complaints from end users.

In general, look and see who is making the money off of a service. They are the ones who will be listened to -- not because of any evil on the part of the company, but simply because they have a greater incentive to scream louder and coordinate.

I'm not sure it's so much better coordination on the part of the professional customers or even screaming louder. It's more that these VC-backed marketplaces all have a business model that can be simplistically described as taking a cut of every transaction.

So they naturally gravitate toward transaction types which create the greatest volume. Which tend toward the repeatable, industrialized, consistent, etc. In other words, the opposite of selling handmade goods, renting a spare bedroom by an owner who is only around between 3pm-4pm, or doing a one-off attic decluttering.

There's some truth to that as well, but I often feel that the large, organized sellers/renters are better able to articulate what they want in a way that individuals cannot. They know the market better, they know what people want to buy, and can leverage economies of scale to craft their marketing message to co-opt the successful one-off sellers.

Power law distribution of attention leads to preferential selection.

It looks light a great business opportunity for someone with money.

I imagine, right now, there are many wealthy people, companies/REIT's buying up residential properties; and using Airbnb to making a healthy ROI. If I had the means, I would probally join the money making hootenanny.

It kinda bothers me because essentilly all these low interest loans are going to wealthy people, with assets. In my warped world, I still think homes should be available to the middle class, and even the working poor. I just heard today it's practically impossible to get a loan if you're self-employed. Sorry, if I sound bitter--I am. I really wish they would raise interest rates. I only see the wealthy benefitting from this historically low interest rates. And to be honest, I don't want to have a bunch of random Airbnb people as temporary neighbors. Sorry about the rant. Oh yea, I just got a cc offer for 29 percent today--yea! I'm just in a bad mood today.

A lot of European cities are trying to crackdown on Airbnb used in housing without permission:

http://www.citylab.com/housing/2016/06/european-cities-crack...

It's a big problem where I'm at:

http://www.stuttgarter-nachrichten.de/inhalt.airbnb-in-stutt...

Even normal folks making thousands of Euro from their flat, making housing unreasonably expensive as speculators snap up any reasonably priced real estate.

This is a problem to be address by user reviews, possibly formalized as some sort of "authenticity/personal metric".

You are searching for a certain feel or experience, which is fine. Personally, I'm more interested in just saving money, a savings which arises from the taking advantage of previously un-rented space and the part-time labor of folks who aren't able to work full time for hotels. Both of us can co-exist on AirBnB. Just read the reviews, and perhaps petition for AirBnB to include a formal metric (or prompt reviewers more for their opinion on the personal feel, etc.).

A full-time AirBnB landlord doesn't ruin the whole point or lose sign of any wonderful vision. I want a "substandard, impersonal distributed hotel", because I don't want to spend on money things I don't care about.

The problem is that you are not taking advantage of previously unrented space, such as a spare room would be. You are forcing people that live in the city out so you can rent their room.

That's the "part-time labor" section of my post is about. And, at its current level of detail, your criticism could be applied any time someone finds a more economically value use for something and "forces out" (i.e., out bids) the previous buyer.

The problem is the spare bedroom, the lovingly handmade shawls, the selling off of those attic knickknacks doesn't scale. So you end up with things that look a lot like hotels, mass produced crap, and more mass produced crap.

That's an exaggeration but not much of one.

Or you recognize that destroying your product offering in the name of "scale" is in fact destroying your product, not scaling it.

And they don't care so long as it makes more money--and is more or less required by the investment model.

By way of analogy, I know some tech events that the organizers keep deliberately small to maintain the feel of the event. But it's a lot easier to do that when you don't have investors looking for hypergrowth.

The “I need accommodation” crowd is bigger than the “I need accommodation and want to live among locals” crowd. They cater to the bigger crowd.

>>I love Airbnb. It's one of my favourite startups, from both a user's and entrepreneur's point of view.

Until that one time when you encounter a problem with an Airbnber, Airbnb customer service try to help, give you hope, then completely pull the rug out from under you. Terrible experience overall.

If there are any Airbnb employees on here who care about customer service and could help, please drop me a line?

Thanks

I guess not ...

> It's hard to be sure I'm staying with a local making some cash off their spare room, rather than someone "farming" a bunch of cheap properties.

The big problem in a lot of places is that these properties are far from cheap.

I live in Stuttgart, one of the most expensive real estate markets in Germany (and maybe Europe?). House/apartment prices continue to climb past the level of absurdity for most residents, and when new "cheap" properties, for the low price of 250-350,000 Eur, hit the market, they're often recently snapped up by wealthy property speculators in the city who turn them around and run them as Airbnb properties at 150-300 Eur/night. It prices folks with middle class incomes right out of the city.

It's to the point that the state is planning laws that would prohibit short-term leasing schemes for whole flats if the flat isn't zoned as commercial property. People will still be able to rent out a room in their flat, but it will have to be a place where they live.

New York State has laws like that. They're awfully clumsy, as laws tend to be, and prevent me from posting my entire apartment while I'm in Europe for two weeks. I think there are more specific ways to tackle this problem legislatively like limiting to a certain number of nights rented per rolling 6-12 month period.

Clumsy laws require less intrusion to enforce. A flat ban on short term rentals means they can run through airbnb listings and see who is breaking the law. A rolling 12 month period requires that they track each night you rented your place out.

Or Airbnb can save its business model by cooperating with the law and with common sense and simply forbid people from renting beyond that?

If you were satisfied with only enforcing it against people renting solely on airbnb, then sure. Seems like it would be easy to work around though.

Or they simply have the law as they do now such that it'd be illegal to rent your apartment out through a service that doesn't cooperate in this way.

The regulatory compliance costs would put an undue burden on smaller players to the market though and end up stifling new entrants.

They changed the laws to that in a lot of places and airbnb aided new york in removing people renting entire blocks to turn into ghetto hotels.

What you're describing is essentially where Couchsurfing stands in the market.

I personally love the fact there is no money exchanged on there and that people participate for the conversations/experiences.

I don't see the problem of owners outsourcing the management. For me the most important thing about airbnb is, that it allows better utilization of resources. I don't care about the other details that much, I still choose my accommodation based on excepted quality/price. Now I just have more choices, thanks to airbnb.

Other companies were offering this service anyway. It's only natural AirBnB would want to provide that service themselves and take a cut.

You're complaining about how things scale. If there's an opportunity to make money by doing more of something, people will pile in and do more of it. That's how markets work.

I Love the idea behind Airbnb, but I hate what they are doing recently. They are deregulating the market and making it worse for everybody except the tourists.

Thanks to them it will be harder for you to rent or buy a place to live. At the same time they are putting registered businesses out of business thanks to the marketing of "sharing" economy, which is a huge sham (see Uber).

I hope that countries protect the regular Joe's living in cities and demand payment for professional renting services, just like any regular apartement / hotel.

Thanks for ruining it for everybody else, so you can make a boatload of money.

> What I find most puzzling is how such great founders could lose sight of the wonderful vision they had.

I think it's a lot of naiveté about the nature of financial markets. If you find something that is truly better, the "no arbitrage" principle pops up. First, it's small players renting out a small number of apartments, but once they prove that the business model works, big money in the form of hundred-billion dollar REITs step in and blow everyone away with scale. These REITs already existed; but they were primarily focused on commercial and multi-tenant buildings where hiring a professional management company scales well. Guess what? Airbnb made it scale well to individual properties.

I'll put it this way -- I have significant holdings in various REITs because of Airbnb. At a minimum, they will drive property prices in an area up, which is the entire point of an REIT (find an undervalued area, invest like hell and bring property values in the whole area up). It's just that they can now have very low management fees because of all the ROI they're seeing from Airbnb rentals. It's a great investment if you can find the right local markets. Even locally where I live, there are at least 3 Chinese REITs snapping up dilapidated houses on the cheap, renovating them, and putting them on Airbnb.

A big problem with wealth is that you can't just let it sit in a bank account. You're losing literally millions of dollars a day that way, so you have to find some way to invest that money into assets with growth. Real estate (I'm not talking mortgage-backed securities, but literally owning a large, diversified portfolio of land) has traditionally been considered "safe" -- you're unlikely to totally lose your ass on the property value alone, and any rental income you get covers upkeep of the property and offsets the interest rates on the loans (REITs are in the game for capital asset growth; not operational income).

Airbnb is, in my opinion, a real-estate investment site first and foremost. It provides management (until recently through a network of local management companies, though this article shows airbnb getting into the game themselves) and rental services to investors.

I don't see any way to allow the original vision of "what Airbnb was supposed to be" without also allowing the real estate investment crowd in. The only way would be extensive screening of rentals to ensure they're actually what they say they are -- and this would need to be provided by Airbnb because property managers are really good at deceiving short-term renters. And that would totally break their business model.

IMO it's yet another case of a tech Animal Farm -- we strip an industry down to its core components in an attempt to simplify, but once you try to scale it up you see why the original iteration of the industry had the rules it did: often to protect unsophisticated customers from slimy professionals who cut corners to increase their margins. In some cases, local regulation / corruption was a real issue (see Uber) but in others I'm not sure there really was much of a problem to begin with (Airbnb in most places outside major cities with artificially restricted hotel capacity).

tbh I don't think the founders had many alternatives if they wanted to justify a valuation significantly greater than than Sabre plc (who have a larger, higher-end room inventory and that's only one division of their business). AirBnB had to find new revenue streams and opportunities to scale up their inventory growth somewhere. It's certainly a risky doubling-down on the very sound business they've built though: I have a feeling they're going to need a few more lawyers.

One group I haven't seen mentioned yet are the various startups aiming to offer property management services to AirBnB customers - yet another example of why building on someone else's ecosystem is always a potential gamble.