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Comment by Gys | Hacker News Reader

Airbnb is trying to make more money by offering experiences (events that generally seem very expensive to me) and moving to a more high-end branding. If I open the website I mostly see the more exclusive places first.

I think this opens opportunities at the bottom. A website that focusses on functionality and cheaper rooms. The public is now familiar with the concept. Some people do not want to pay above hotel prices to stay somewhere for the night only. They are looking for a simple, clean and cheap bed. I am one of those.

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I agree there’s room for a lower end competitor.

I used to rent out a room on Airbnb, it was a great experience. Both renting and staying I met cool people, as they were often keen to chat or hang out. And cheaper than a hotel, usually hostel prices. I never minded that staying in someone’s house would often mean a haphazardly tidied room with no available cupboard space.

Fast forwards a few years and I rent out a spare room to a friend at below market price, well below Airbnb price. I can’t be bothered with the standard that people now expect, I hate the attitude of Airbnb (ie use instant book or get fcked), and I find myself feeling guilty at contributing to the short supply in housing.

Nor have I stayed in an Airbnb for a couple of years, I’m back to hotels. It’s not cheaper (what are their fees even for?), and it’s usually a purposed Airbnb property, rather than someone’s home. It’s lost it’s magic.

The problem is that businesses initially built around genuinely amateur money-making on the side (Airbnb, eBay, Etsy, I'm sure many others) tend to attract professionals who often push many of the initial users out. And the higher volumes are more attractive for the businesses mediating the service so they don't have much incentive to really stop it.

It does open up the opportunity for new entrants to come in that are like "X but in the old days." Though it's now harder with a big incumbent and the cycle will probably repeat again if they're successful.

I'll agree with the previous post that renting a room or a flat on airbnb is a terrible experience. People really have crazy expectations and you need to be a professional hotel to handle it.

I'm a firm believer that most hosts will stop renting after a few guests. The turnover must be high, only covered by the new supply of hosts following the hype. It will dry up eventually and mostly professional hotels will remain.

I felt the same way about eBay back in the day. I quickly came to the conclusion that there were very few items I wanted to get rid of that were worth the hassle. The last time I had some camera equipment to get rid of I just sold it to Amazon. I'm sure I could have gotten more $$ through other channels but it was so hassle-free that it was worth it to me.

I actually have bad reasonably good experiences selling random stuff around the house on eBay. I also thought it had been overtaken by professional sellers, especially when bidding is basically no longer a thing on eBay anymore, but I set up 7 day auctions for a dozen items I wanted to get rid of (books, computer accessories, old games, etc) and all but one sold without much hassle.

I'm guessing the dollar amounts involved for the sorts of things you mention would be less than I could be bothered with. I pretty much decided that less than $50-$100 was about my floor where I would consider eBay.

What do you think would make this better for people who don't fit the profile of a semi-professional hotelier?

You're totally right and this use case is important — friends. Most people would never list publicly. How often do you host friends?

Would love to see your place on Overnight. Our core focus is people who are open to hosting friends/members of their communities.

  what are their fees even for?

If you're referring to the resort fee I've only ever heard that that's charged by hotels in the US and I think it's a scam.

I've never ever encountered mandatory fees for (often shitty) WiFi and a daily paper, which I don't want. Some hotels (usually at the upper scale) may charge for WiFi if I chose to use it, but won't just tack it to the bill if I don't.

Offering a low price to then switch to a higher price, which is not even visible when you book, but only when you're about to use the service and can't turn back without penalty is a bait and switch it's fraud; plain and simple.

I don't get why the law doesn't hammer down hard on such practices.

i don't see how a whole new company can exist to fill in the gap of what airbnb's price slider filter can fix in 2 seconds

There's always room for improvement. You could have said the same about craiglists -- what's the need of airbnb, craigslist/couchsurf.com etc. already exists.

I think grandparent post has a good point, I'm also one of the people looking for something cheaper, and most airbnb's are often out of my price range.

It’s not enough to have a slider, you also need to actively market to people looking for cheap places to stay in the first place, or they will never even think to use your precious slider.

This splits AirBnBs marketing on two fronts: high end and low end. This either doubles their marketing cost or halves their marketing budget for each audience. Take your pick.

A company focused on low cost listings only has to market to one audience, which results in significantly cheaper marketing cost, which means better profitability, which means longer staying power, which means eventually they own a large percentage of the low end market.

Game Over.

valid points for sure

I don’t understand, how would AirBnB segmenting their marketing cause it to cost twice as much?

Imagine AirBnB and the low cost company both exist as you imagine. Now suppose AirBnB buys the low cost company and doesn’t change their marketing at all. Of course marketing ROI for each of the two segments doesn’t change. Compare this to the case where AirBnB operates in the two segments without buying low cost company. How are these cases different?

Furthermore, many of the major hotel chains have a bunch of brands, each of which caters to a particular demographic. Usually one or more of the brands cater to the price conscious and others are higher-end. If anything, there's an argument for AirBnB to have come up with more distinctive branding for a new product.

When a marketing budget that once served a uniform segment splits to serve multiple segments, you must either divide the budget amongst segments or increase the budget to support the previous standard of marketing activity for a segment.

Yes but, if you serve multiple segments vs. just one, you presumably can amortize your marketing dollars over more volume. (And if you're not increasing volume by going after more segments, those new segments obviously aren't working out for you.)

In this case the low end market becomes a drain on AirBnB because the ROI is not nearly as high as their high end market. However the ROI would be acceptable to a smaller player. Is it worth for AirBnB to dilute their brand at this critical juncture just to hold on to as wide a market as possible?

No.

"Introducing AirBnB: Simplicity. Clean sheets, great hosts, for a fraction of the cost of a hotel."

Game over^2.

AirBnB Simplicity, AirBnB, and AirBnB Plus? I don’t think so. I’d give that a D+ on execution.

Really? What about JW Marriott/Marriott/Courtyard by Marriott.

Edit: Marriott, across all of its brands, had nearly $23B in revenue last year. They're clearly doing something right by segmenting their brand.

AirBnB is not a hotel company. They are a platform for people to list their homes for other people to rent for a short time. Never forget that.

Yes, but they also did not use Marriott Plus for obvious reasons. Marriott can fully control their brand segmentation, Airbnb cannot. As it stands there are plenty of standard Airbnb listings hitting far above the Airbnb Plus segmentation. In the end you end up with a plus but not a plus and a higher nightly rate. And now I'm laughing.

It is quite easy to exploit a gap. Some bad publicity about how Airbnb hosts were treatign LGBT guests and you have relatively successful Misterbnb...

My accommodation in Eastern European services apartments for this weekend is cheaper than the fees would be on Airbnb. The price slider cannot fix that.

From my experience relying on the slider means you miss a lot of options. For example, some hosts have huge differences in pricing depending on the length of stay. I have found weird results where it's been cheaper to rent for a month than for 2 weeks at the same property.

The extreme of the bottom end is couchsurfing.com which might chew into the niche you describe.

There is still some room in the middle, but success isn't guaranteed in that sort of market.

I think transaction is important because it's explicit, and people are far likelier to respond. Couchsurfing is free, so the incentive is low, but the community is the most important part of it. I think combining community and transaction is a huge opportunity (I'm also biased :))

That is definitely an interesting perspective and I would agree there are a lot of people who just want the lower cost and clean bed for a night. However, is this move to add functionality really moving Airbnb out of the low cost market? You can still find very inexpensive options (as long as there are hosts) on the website. Airbnb, I would say, is just expanding their market pool not limiting it.

The Overnight app is optimized for this use-case, among other things. (Disclaimer: I’m an investor, but because I think it fills a real need)

I would say there's very little motivation for hosts to have cheaper rooms. These services make a bad reviews so high cost to the host that everyone just tries to make it 5 stars. That and in the in the bottom there's always normal long term house renting for very little effort.

There are alternatives to a five star rating system. The old Couchsurfing site did this nicely with open ended feedback and a vouching system.

I think hotel booking sites are already moving into that market. Agoda has listings for whole property rental that previously would've only been found on Airbnb.

If you look at the list of homes listed, I wouldn't say they are above hotel price at all.

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