Bed and breakfast? Be my guest

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Airbnb has emerged as a formidable force in the hospitality and travel industries, amid a few serious hiccups it needs to address speedily. India, a market ripe for home and boarding, has been slow to catch on so far, though...

It was June 2013, and we were at the end of our five-day holiday in Edinburgh. We were a bit sad. The trip coincided with the conclusion of our three-month stay in London. I had come to the United Kingdom, along with my family, as a Chevening scholar at Westminster University to attend a course for South Asian journalists. It was time for us to return to London and, two days later, fly back to Delhi.

We were also dejected because we would miss Marianne and her husband Terry, who hosted us in their beautiful home on the outskirts of Edinburgh. Our two families were strangers to each other just five days ago. But thanks to Airbnb, the accommodation sharing e-platform, we got to stay with the Scottish family and become friends.

Marianne had opened her home to us. We had a bedroom, overlooking the backyard, which looked like a cute, little garden. While on the first night our host cooked us a warm delicious Scottish dinner, on the other days — tired of eating outside — we would buy grocery from a neighbourhood store and cook in the kitchen. My 18-month-old daughter became friends with 'Marianne Ammachi [grandmother]' and her dog, and felt quite at home. Marianne was also hosting a German youngster who was in Scotland’s capital on work. Though we didn’t see much of him, it was an excellent experience staying with people of different nationalities.

 

Our stay at Cardiff, though, — concluded less than a month earlier — had left us with a different feeling. Making the most of a three-day weekend, we were in Wales’ capital, staying in a budget hotel of an international hotel chain that has a considerable presence in India too. Like Marianne's house, the hotel too was on the outskirts of the city; but the similarity ends there.

The hotel was isolated and wasn’t exactly bubbling with activity. Though we didn’t have any complaints about the service (the staff was efficient) and the food was what you expect in a hotel, it wasn't nearly the same as what we would experience a few weeks later at Marianne's home. We could not talk much — or rather, have conversations — with any of the locals, except exchanging pleasantries at shops and eateries. Although Cardiff has it's fair share of sites to explore, we sorely missed being able to experience the local culture… like a local.

Naturally, we enjoyed Edinburgh more than Cardiff — and the time we spent at Marianne's played a big hand in that. Oh, by the way, we paid £75 for the two nights in Cardiff, and £133 for the stay at Marianne's home. Yes, the accommodation at Edinburgh was cheaper. But should money be a gauge of value when it comes to experiences that last a lifetime?

Our family has since become a fan of this concept. And we have used the sharing platform for our trips to Mumbai and Istanbul. Each time, especially in Istanbul, the stay has been memorable.

It isn’t just me. The market also seems to believe that the two models (representing the two experiences I had) are different. And that’s why just seven years into its life, Airbnb is valued at a mammoth $25 billion.



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So, it is with more than casual interest that I have been following news about Airbnb. And if the last few months have been any indicator, Airbnb is indeed in a spot of bother. The Airbnb experience has not been as smooth in other instances as it was in our case. >This article by The Sydney Herald Morning’s senior writer cites many instances of customer experiences that were the opposite of mine — horrendous, abusive and serious. And both guests as well as hosts have complaints.

There are stories of thieving guests and clogged toilets, but the most appalling is >that of Jacob Lopez. He was allegedly sexually abused by his host in Madrid. And — if the allegations are true — the lack of responsiveness on the part of Airbnb’s employees to desperate calls for help from Lopez's mother was shameful.

We too had apprehensions as we were going to stay with complete strangers. Fortunately, we had no complaints. One of the lasting memories from Edinburgh was the swift response of Marianne’s husband when our daughter had a medical emergency; he drove us to the closest hospital.

While Airbnb has claimed such sordid incidents are a negligible percentage of the 40-million-odd visits on its platform in 2014, the negative feedback does put the onus of improving safety of hosts and guests on the company.



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Airbnb has a lot to lose if it doesn't address these issues. Especially given how rapidly it is growing. The traditional hotel chains might not concede it but the sharing platform’s impact on the industry is already evident. It now has over 2 million listings — or rooms — in 34,000 cities and 190 countries. I doubt if any hotel chain comes even close. Without owning a single room, the company has, it claims, hosted 60 million guests.

Now, the industry disruptor is slowly evolving into a one-stop destination for travellers. >Like a travel agency, the company has begun to customise holidays for its customers. The hosts now can double up as guides. Airbnb is also planning to launch a loyalty-reward programme. >It has teamed up with MasterCard and is working on a $1,000 pre-loaded Experience Card for loyal customers (I wonder if I qualify).

While the guests might have to wait for some more time to avail these goodies, >Airbnb’s success has trickled down to its hosts, many of whom are making six-figure incomes by renting out their houses and even others’. But that has led to a lot of complaints, including from neighbours who are vexed with guests in some cases — like late-night partying. But complaining neighbours are the least of the company’s worries.

Airbnb’s biggest fight is in its home market, San Francisco. The company spent over $8 million to ward off a recent ballot that would have put a limit on the nights a host could rent out his or her home. Also, San Franciscans fault Airbnb for the low availability of houses for renting, and sky-rocketing rentals in the city. It is a consequence, they allege, of many landowners going Airbnb’s way.

 

Besides disrupting the rental economy, the start-up unicorn is also changing the equation in the hospitality industry. Slowly, though reluctantly, Airbnb’s peers are being forced to acknowledge its presence. In Austin, Texas, which is home to the largest number of Airbnb ‘rooms’, the traditional hotels lost 13 per cent of their annual revenue last year. Similarly, the industry in New York lost $451 million in 2014, says a report commissioned by the city’s Hoteliers’ Association. So even as hotel occupancy in the United States is set to reach a new record in 28 years, >hoteliers, at least some of them, are beginning to see Airbnb as a competitor.

In the online segment of the industry, though, the Airbnb vs. The Rest tussle has already gained a layer or two. In early November, Expedia Inc, the online travel behemoth, bought Airbnb’s competitor HomeAway for nearly $4 billion. The Washington-based Expedia, which has been aggressively eyeing the $100-billion alternative accommodations segment of the industry, will now directly vie with its younger San Francisco peer.

The two might soon have some company. Another big online player, the Priceline Group, is also showing signs of bettering Airbnb’s forte. Its unit, Booking.com, which has listing of hotels, hostels and guest-houses, is scaling up its apartment portfolio.



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Its experience in India seems, so far, to be different. It has certainly been noticed by competitors. In September, Stayzilla, the online marketplace for rooms, altered its business model to reach out to homeowners. The Chennai-based start-up’s aggression seems to have unnerved Airbnb India — as indicated a >September 16 tweet from Stayzilla (which seems to have since been taken down from its Twitter page).

Airbnb’s showing in India hasn’t been spectacular. A search for accommodation in each of the four metros results in just about 300 listings (about 2 per cent of the number in New York).

It does take time for some global ideas to take shape in India. But I wonder if culture can be an issue? It could be. In a society that has several layers (such as class, caste, language, religion), there are a lot of factors that might stop a traveller from — say — Kerala to find it agreeable to live with a host even in a tourist hot-spot like Agra or Jaipur. Or are issues of terrorism and immigration limiting the numbers?

As I pondered these questions, it occurred to me that I might be over-thinking this issue. But then I bumped into a new research paper by Nancy Leong of the University of Denver's Sturm College of Law. Released last month, the paper, titled ‘The New Public Accommodations’, tries to figure out if the sharing economy (represented by the likes of Uber and Airbnb) “has the power to reduce or eliminate discrimination on the basis of race.”

Sadly, not yet. The researcher concludes that the sharing economy has not solved the problem of race discrimination. What's more, Ms. Leong says, it has raised new concerns that civil rights law must evolve to address. In one instance, she writes, “Businesses such as Uber and AirBnb allow service providers (drivers; landlords) to rate service users (passengers; renters). Over time, these ratings aggregate the preferences of many service providers, and to the extent that the service providers are consciously or unconsciously biased, members of disfavored racial categories will gradually average lower ratings than their more favored peers.”

 

This doesn’t mean people will not increasingly warm to the idea, especially when they have properties to let out. A few of my own relatives — those with large houses but empty rooms — were curious to know how Airbnb works. But they haven’t taken the official step of listing their houses on the sharing portal.

But this is where, I believe, Airbnb could do well in India. My family's experience of living with a senior citizen in Mumbai was pleasant. Staying with 'Mani Uncle' taught us a little more about Tamil culture before we moved to Chennai. So imagine the scope of discovering people, culture and cuisine in a country where it is famously said, “Dialect, food and culture changes every 100 km [or is it 50?].”

 

I have shared the idea with my father. He is interested in listing our home in Kerala on Airbnb’s site, but is unsure. Marianne would appreciate it. Bidding us goodbye as we stepped out of her house in Edinburgh in the summer of 2013, she said: “If your father ever lists on Airbnb, please let us know. We hope to visit Kerala one day.”

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