Posts

airbnb

Airbnb CEO Asks Hosts to Lower Their Listing Prices

/in , /by

Airbnb CEO Brian Chesky is asking hosts on the short-term rental platform to lower their prices. In an interview with Bloomberg on Monday, Chesky said that he wanted the app to be able to compete with hotels.

“We want prices to move and to be more competitive vis-à-vis a hotels—that is really important. When our hosts provide better deals, they tend to make more money.”

Part of his solution includes giving hosts proper rate comparison tools for nearby hotels, which the app currently lacks.

“We’re [currently] giving tools to hosts to compare the prices of their listings to others in their neighborhood—and while we don’t yet have a hotel comparison, we do encourage them to look at rates for hotels in their area just so they have a sense of what travelers are getting on other platforms.”

According to Chesky, the company will also work to fix problems with pricing, transparency (by not showing customers the total price for each listing), and fake listings. Chesky’s remarks come as Airbnb has had a tumultuous year.

On the pricing front, the promise is to provide hosts with insights that ensure competitive nightly rates while also showing customers the total price per listing. These prices will include clear and lower cleaning fees, a frequent point of contention.

Embed from Getty Images

Additionally, the app’s search feature was enhanced with new filters for king-size beds and pet-friendly homes. There is also a new listing verification system to decrease calls to customer service by identifying and removing fake listings.

“We need to get our house in order,” Chesky says.

“We need to make sure the listings are great, we’re providing great customer service, and we’re affordable. And I’ve told our team that we can get back to creating new and exciting things once we’ve fixed that foundation.”

The year 2022 marked the first year of profitability for the business. However, in March 2023, many hosts took to Twitter to express their frustration with declining bookings, increased competition, and shrinking profit margins. The perceived short-term rental bubble was dubbed “Airbnbust.”

Jamie Lane, an economist at vacation analytics firm AirDNA, told Insider in 2022 that there was an increase in supply, causing demand to spread out over more listings, leading to “occupancy decline.”

In September 2023, New York City also cracked down on short-term rentals, implementing a set of regulations that made it much harder for users to book an Airbnb rental.

The new rules mandate hosts register with the city to guarantee that their listings adhere to the city’s occupancy and building code regulations. According to Bloomberg, the company is expected to lose thousands of listings in one of its biggest markets.

Officials claim that illegal short-term rental listings, often with inhabitable conditions, contribute to New York City’s affordable housing crisis by taking homes off the market.

Embed from Getty Images

Chesky claims that part of the app’s current struggles are due to the platform originally being “designed for a much smaller company,” before rapidly growing in popularity.

“To use a precise metaphor, it’s kind of like we never fully built the foundation. Like, we had a house, and it had four pillars when we needed to have 10.”

The company is using AI for quality control of its listings. According to Chesky, hosts are being asked to upload photos of the property’s interior and exterior as part of the listing process, with the intention of using computer vision technology to analyze the images and compare them to other databases, such as Google Earth, in order to generate a trustworthiness rating.

Any listing with a low score is sent to a human reviewer.

Chesky told the Financial Times that the company will also venture beyond short-term rentals, including offering long-term rentals.

“Travel is our sweet spot. Eventually, the big frontier for Airbnb is to go beyond travel. There’s an eventual opportunity for Airbnb to become a greater part of your daily life. Not just once or twice a year.”

 

Investing in Real Estate

Investing In Real Estate For Beginners

/in , /by

Investing in real estate can be an extremely lucrative path to take in terms of building up your finances and professional portfolios. However, whenever we hear the term “investing” it’s easy to feel intimidated and overwhelmed by the whole process, but it doesn’t have to be so complicated. By using online resources and connecting with individuals in the industry, investing in property can be totally beneficial, and even fun. 

First, it’s crucial to understand that investing in real estate is not cheap. Regardless of where you live and what the housing market is like, there are a lot of additional costs that go beyond just purchasing a piece of property. Basic household maintenance, taxes, general upkeep, utilities, etc. are all things that add up, so be sure that you have a solid financial plan set up before you go any further. If you need, take out a small loan that you know you’ll be able to pay off with the money you’ll either gain from the property, or from your regular job. 

Embed from Getty Images

Now that you feel financially secure enough to invest, map out what type of property you want to put money into, and where you want it to be. Bringing in an expert would be helpful for this part of the process, especially if it’s an agent that you, or someone you’re close with, knows personally. Working with an expert will guarantee that you’re not overlooking any crucial details before signing your name on the dotted line. 

Think about the property that would be most ideal for your lifestyle. Do you want a property completely separate from where you live in which you’re someone else’s landlord? Do you want a home, or would you prefer to start smaller and get an apartment? Is this project meant to be a more long-term renovation in which you flip the interior and re-sell for double the price? Whatever your dream investment looks like, keep your options open and consult an expert about what type of investment opportunity will be the most beneficial for you in the long run. 

Once you check out a few properties and different areas for investment, it’s time to get more logistical. You need to make sure that throughout this process your rights as an investor are protected. Forbes Magazine recommends that before you invest in any type of property, you use an LLC, or limited liability company, to help you with “risk management.”

Embed from Getty Images

“The LLC has ownership over the properties; if anything should happen on those properties, you are not held personally responsible. Additionally, having an LLC can protect your funds should something occur on the property. It can also give ‘checkbook control,’ which can help if time is a factor when accessing your retirement funds for real estate-related purchases. This process allows you access to your funds whenever you need them,” (Forbes).

Once you work out the business side of your investment it’s time to work out all of the specific details and terms. This is where having a LLC and/or trusted real estate agent in your corner will be helpful. The terms for your personal investment are going to be specific for you and your wants with the property. Calculate rent payments, annual upkeep costs, and safety nets for your investment in case something comes up. 

Deciding the terms will give you a greater insight into what your actual goals are when it comes to real estate investing. Do you want to actually be a landlord and make back your investment that way or are you more interested in seeing a personal vision come to life through the property itself? It truly is up to you, just make sure you have individuals that you trust in your corner to ensure that you’re making the best decisions for you and your money. Real estate is an expensive industry to invest money in, and depending on the current state of the market it can be a hit or miss. However, with some expertise, a small loan, and enough passion anything is possible in the realm of property management.