Whether you are looking for a place to stay for an upcoming international vacation, or just looking to save a few bucks for a weekend getaway, Airbnb has quickly grown into a very viable option for would be travelers. Founded in 2008, San Francisco based Airbnb is a new player in the share economy allowing short-term rentals between owners/renters of rentals and travelers. Oftentimes more desirable than a hotel just from a cost perspective, utilizing Airbnb also allows for the ability to interact with a host owner/renter in more of a “house guest” setting, as opposed to the feeling of customer and client. Plus, in some markets where finding an empty hotel room for the night can prove to be nearly impossible, or financially taxing, Airbnb provides another route for a not breaking the bank good night’s rest.
Despite the obvious benefit of a more cost effective option for a traveler and the ability for the owner/renter to generate an additional form of income, Airbnb has not been welcomed with open arms by everyone and has been viewed by some as a potential nuisance to the apartment market. Specifically in cities where apartment vacancies are already at dramatic lows (i.e., San Francisco and New York), Airbnb can also enhance the already difficult situation of finding an apartment for a long-term renter in these cities. It is not a secret that short-term rentals come at a higher cost for the renter and in turn, a higher rate of return for the owner. With that in mind, what is the incentive for an owner to not stockpile apartments solely for short-term rentals for those travelers utilizing Airbnb? Plus, if travelers are not staying in hotels as much and are instead going through Airbnb, how drastic are the effects on the hospitality industry?
Airbnb has already embedded its footprint in the market as a viable option for travelers and owners, but it is still too early to tell if the lasting effects are going to be viewed as overwhelmingly positive or negative. As a traveler and having used Airbnb before, I think it is a fantastic option to have and allows for an entirely different traveling experience than your typical hotel stay. As a player in the multifamily industry, I can see Airbnb continuing to lead to higher rental rates in more markets for prospective renters, as well as stripping markets of viable living options for those looking for long-term leases. Regardless of the outlook, Airbnb has quickly added another layer to the multifamily and hospitality industry that will continue to be used by individuals as the company’s benefits are realized by more and more people in our social economy.