Airbnb
faces worldwide opposition. It plans a movement to rise up in its
defence
The
room-rental website, now worth $30bn, faces a critical year as city
authorities clamp down
Shane Hickey and
Franki Cookney
Saturday 29 October
2016 22.02 BST
In the back room of
a pub in Kentish Town, a group of middle-class Londoners are perched
on velvet-covered stools, eating hummus and talking about property.
On the wall, above a pile of empty beer kegs, a slide presentation is
in progress. A video of Airbnb’s recent advert shows smiling hosts
opening their front doors and declaring their support for Sadiq
Khan’s post-Brexit “London is open” campaign.
The audience of
Airbnb hosts are there after receiving individual invitations from
the company to a “home sharers” meet-up – a concept largely
unfamiliar to the slightly bemused crowd. Jonathan, an enthusiastic
Californian Airbnb employee, who was recently seconded to London to
set up the clubs, is happy to explain: “Homesharing clubs are
simply a way of organising this into something … that has a unified
voice … then actually takes actions as a collective,” he says, in
a less than clear answer.
More simply,
homesharing clubs are advocacy groups made up of Airbnb hosts –
loose, informal lobbying groups that push the company’s agenda to
politicians. The clubs are part of a what is fast becoming a
concerted fightback by Airbnb, the website founded in 2008 when three
college friends rented out air mattresses in their San Francisco flat
as a way of making money, to become one of the biggest online travel
brands in the world.
But its phenomenal
growth is proving to be its greatest liability. Authorities in cities
around the world fear the impact it is having on their communities
and are now seeking to arrest Airbnb’s near unfettered expansion.
The latest in a
series of attempts around the world to curb its growth came earlier
this month when New York governor Andrew Cuomo signed a bill that
will fine tenants or landlords who let out unoccupied flatsfor less
than 30 days.
Meanwhile, in
Dublin, the owners of one flat have recently been prohibited from
using it as an Airbnb let without planning permission, raising the
prospect of copycat actions elsewhere.
Elizabeth Warren is
right. Unless this trend reverses, our cities will become cheap
places to stay for tourists – and unaffordable for the rest of us
Read more
In Berlin, people
who let more than half of their flat short-term without obtaining
permission from the city council now risk a fine of €100,000. And
in London, a 90-day rule was introduced last year under which no
property can be rented out on Airbnb, or any similar service, for
more than three months a year without planning permission.
So how is Airbnb
responding? In New York the company has filed a lawsuit in the US
federal court. But at a wider level the company is now supporting
efforts to prevent these types of actions from taking place in the
first place. And the best way to do this, Airbnb thinks, is to get
its millions of hosts to rise up on its behalf.
Last year the
company announced plans for 2016 to create homesharing clubs in 100
cities around the world. The aim, it said, was to form “a powerful
people-to-people based political advocacy bloc”.
The bulk of the
clubs are in North America, with a couple in Australia, South America
and Asia, and an increasing number in Europe. In Britain, however,
the number of clubs is negligible, even though there are more than
40,000 listings on Airbnb. The company is concentrating its efforts
on building this UK base. Meetings, such as the one at the Abbey
Tavern in Kentish Town, have been happening all over London as Airbnb
seeks to build a grassroots campaign to fight the threat of greater
regulation and more restrictive policies.
The hosts at the
Kentish Town meeting are told that, earlier this year in Berlin,
Airbnb “dropped the ball” after the city’s ruling on short-term
lets – the suggestion being that it did not want this to happen
again elsewhere. As a result of that ruling, the Berlin Home Sharers
Club was created and started lobbying to try to change what it saw to
be an unfair policy. In London, the 90-day rule may itself not be
onerous compared to other cities, but there are growing calls for
further regulations .
Airbnb’s Jonathan
steers clear of telling the group that they should lobby for change.
“On the one hand, would Airbnb like to see homesharing groups set
up all over Europe? Absolutely,” he says. “Would it share in
their interests? Absolutely. But whether those sharing clubs decide
that their only interest is to share electricians and plumbers or to
take political action is completely up to them,” he says.
The next slide
focuses on Barcelona, a city where, in 2014, Airbnb was fined €30,000
for breaching tourism laws. Later, another slide listing “write to
your MP” as a suggested activity is shown. “Writing letters to
local newspapers and selected officials is obviously something that
we would want to see concerned hosts do, but only if it applies to
them and if they’re motivated to do so,” Jonathan says.
Chris Lehane,
Airbnb’s head of global policy and communications, said the clubs
act as “a voice against the powerful”.
“These folks
absolutely should have the capacity to go out there and represent
themselves, and we’ve been clear that we want to provide that
support and provide some of the infrastructure,” he said. “This
can be an incredibly effective advocacy tool. I think we’ve been
pretty transparent and open about that.”
The networks of host
groups, which in effect lobby on behalf of the company, are an
illustration of how far Airbnb has grown since its inception in 2007.
Back then, founders Brian Chesky and Joe Gebbia could not afford the
rent on their San Francisco flat and so put three airbeds on the
floor and charged $80 a piece for their first guests.
Even by the rapid
standards of growth in the tech industry, the company has expanded
very quickly. It is now valued at $30bn, and claims two million
property listings in 191 countries. That valuation puts the worth of
the Californian firm at more than Hilton Hotels.
Wouter Geerts, an
analyst for Euromonitor International, says this rapid growth has led
to the “corporatisation” of Airbnb, with more listings from other
hospitality companies and people with multiple properties. “That
might be hotels or estate agents, serviced apartment providers. They
all look at Airbnb and think ‘actually what is stopping us putting
these properties on Airbnb as well and making extra money?’. And of
course there are more and more stories about landlords that push out
long-term tenants because they can make more money through Airbnb,”
he said.
One of the most
frequent criticisms of Airbnb has come from the hospitality industry,
which has complained of the differences in regulation that hoteliers
have to operate under, compared to Airbnb. But the organisation that
acts as the voice of this industry in the UK says it is not just
about them. “Many councils in London have expressed their concerns
recently,” says Ufi Ibrahim, chief executive of the British
Hospitality Association. “Much of that is because the sharing
economy – and in particular we are talking about the unlawful
professional landlords, the pseudo-landlords operating illegally –
has put a huge strain on rental prices.”
Increasing levels of
hostility to Airbnb have also started to come from the neighbours of
those who let their homes through the website. Last month a property
court in London ruled that homeowners whose leases say that their
homes can be used only as a private residence cannot rent out their
properties as short-term lets. The case came after the neighbours of
Slovakian interior designer Iveta Nemcova informed the freeholder of
the building that she was listing her flat in north London on Airbnb.
As a result, Airbnb hosts have been warned that they could be in
breach of the terms of their mortgages and building insurance
policies.
One homeowner who
spoke to the Observer said that the ground-floor flat in her building
had been rented out on Airbnb by a tenant without the knowledge of
the owner. As a result, the house insurance of the whole building was
potentially invalidated.
In London,
Westminster City Council is investigating 1,200 properties alleged to
be let in excess of the 90-night limit. Enforcement notices have so
far only been issued against two. “In practical terms it is a real
challenge for us to gather evidence to prove that individuals are
letting properties for over 90 nights,” a council spokesman said.
The scrutiny that
Airbnb faces from both users and policymakers around the world comes
after the site’s runaway growth. John O’Neill, director of the
Centre for Hospitality Real Estate Strategy at Pennsylvania State
University, estimates that the number of hosts has doubled in the
last year with revenue up 60%. With that growth has come an ecosystem
of support companies, typically property management firms that submit
the advert for the property onto the website and then may manage
guests arriving and leaving, dropping off and collecting keys, for
example.
The exact effects of
this growth on the hotel industry are unclear. The British
Hospitality Association said it would be “unfair” to say there
had been an impact on the demand for its members’ services as a
result of Airbnb – and instead the association focuses its
criticism on the effect on housing. Airbnb says that its growth has
been a reflection of how people live, and describes the attacks from
the hotel industry as “disappointing but not surprising”,
rejecting claims that it has a negative effect on the housing market.
“Homesharing puts
money into the pockets of regular people and spreads guests and
benefits to more communities and businesses,” the company said in a
statement. “Countless cities around the world have introduced clear
home-sharing rules, and we will continue to be good partners to
policymakers and work together on progressive measures to promote
responsible homesharing.” The vast majority of hosts follow the
rules, it said.
Where the Airbnb
debate goes next, after such a period of rapid growth, is unclear.
Some hotel companies, instead of continuing to fight Airbnb, have
chosen to join it. “The larger hotel chains are moving away from
trying to combat Airbnb. Initially there were some kneejerk reactions
of ‘we have to lobby against this, we don’t exactly know what’s
happening, they are not regulated well’. Most of the companies have
moved on from that now and they have started to realise certain
potentials that it brings,” said Geerts. “There is this movement
of looking at short-term rentals not as a negative, but more as a
positive, and seeing the changing demands of consumers.”
This was illustrated
in April when French hotels group Accor, said to be Europe’s
largest hotelier by room numbers, paid £118m to acquire Onefinestay,
which offers short-term lets on expensive homes.
O’Neill estimates
that there are 70 lobbyists working for Airbnb in the US, trying to
get favourable legislation passed to benefit the company. “Most
hoteliers I speak with have accepted Airbnb’s existence and growth.
Their concerns have more to do with levelling the playing field
between hotels and Airbnb operators, because Airbnb has so many
unfair competitive advantages relative to hotels,” he said.
Others have said
that regulators need to be fair in how they set out the rules that
Airbnb and other similar companies must adhere to. Robert Vaughan, an
economist with accountancy firm PwC, said there was a huge variation
in those affected – from someone renting out their sofa, to
landlords with multiple properties – and there is a difficulty in
applying the same rules to all of them.
O’Neill says that
while Airbnb may continue to grow, it will not have the free rein it
had previously. “I don’t think there will be a free-for-all of
unregulated growth as there has been in the past,” he said.
Back at the meeting
in Kentish Town, the night ends with a positive response to the
homesharing clubs idea. “We need to write a letter,” suggests one
host. “We should meet every three months,” suggests another. As
the meeting draws to a close, nearly everyone agrees on the need for
a club. Jonathan jumps in again: “I do want to stress that there
are other sorts of flavours to home-sharing clubs,” he says,
launching into a description of a collective bedsheet-washing
initiative, but few are listening. As the meeting ends, the group are
asked to put their hands up if they want a local club. Nearly every
hand goes up.
The Observer
reporter who attended the Kentish Town meeting is an Airbnb host
Growing concern
around the world
BARCELONA
Authorities in the
Catalan capital recently stepped up their campaign against homes
illegally rented out to tourists using homesharing websites. Hundreds
of listings were ordered to be removed, and Airbnb and another online
rental firm, Homeaway, faced fines of €60,000 each.
Homeowners who want
to rent out properties to tourists must apply for a licence, and a
team of 20 inspectors has been set up to find those who do not adhere
to the rules. The city’s mayor, Ada Colau, who took office in 2015,
stopped the granting of new tourist licences for homes and hotels.
She has blamed the rise in Airbnb popularity for growing tensions
between residents and rowdy tourists.
The number of people
using Airbnb in Barcelona tripled to 900,000 in the three years to
2015.
REYKJAVIK
The 1,600 short-term
property lets in Iceland’s capital have to operate under strict
rules introduced in June. The legislation allows residents to let
their property for 90 days a year before they must pay business tax.
The move comes as Iceland’s population of 332,000 is set to welcome
1.6 million visitors this year – a 29% increase on last year –
drawn by the glaciers, fjords, lava fields, hot springs, hiking
trails and midnight sun.
The move is one of a
series aimed at controlling the rapid rise in visitor numbers,
including Game of Thrones fans travelling to the filming locations of
the television drama. One report estimated there was a 124% increase
in Airbnb rentals in one year as residents cashed in on the
popularity of the country, with more than 100 flats available on the
capital’s main street alone.
MOSCOW
Airbnb said last
year that the Russian capital was one of its fastest-growing markets,
fuelled by high inflation and low incomes. Activity doubled in one
year, driven by an increase of single rooms in apartments, which were
being listed for short-terms lets in an attempt by many homeowners to
make ends meet, given the country’s economic problems.
The growing interest
in Moscow on Airbnb brought it into the top 10 most popular cities by
bookings on the website at a time when there was no sign of
legislative regulation to restrict use of the service. The sharp
increase came at the same time as falling wages, which were down 8.8%
in the first half of last year. The average price of a private room
for a night in the city is £27, and £45 for an entire home,
according to the site.
LISBON
The city has bucked
the trend of some of its European neighbours, and instead worked to
make it easier for short-term rentals to operate. Hosts are required
to register their properties as short-term rentals but there is no
limit on the number of nights per year that they can operate.
Mayor Fernando
Medina has said people should not be scared of the new tourism
dynamic and wants the city to be able to take in more tourists, in
turn reducing the number of empty buildings in Lisbon. Tourism is
seen as an important part of Portugal’s economic recovery. Airbnb
listings in the greater Lisbon area have almost tripled in the past
three years.
SAN FRANCISCO
Although the city is
home to Airbnb’s HQ, it also operates strict rules for hosts, who
have to register with authorities. If Airbnb advertises an
unregistered property it can be fined $1,000 a day for each listing.
One action group has posted “wanted” flyers. The crime?
“Airbnbing our community” and “destroying affordable housing
for immigrant, minority, and low-income families”. Resident groups
have campaigned against Airbnb and there have been reports of tenants
being evicted so landlords can list on the site. Last year Airbnb
successfully campaigned against Proposition F, or the “Airbnb
initiative”, planned legislation that would have reduced the number
of days owners can rent their properties. Airbnb’s victory was
helped by its grassroots homesharing club, which voted in large
numbers against the law.
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