While the public may see VTrips and Airbnb as competitors, it is crucial to recognize that online travel agencies (OTAs) like Airbnb are not property managers.
Airbnb is a marketplace filled with properties from individual hosts and from professional property managers. Some of the individuals and property managers are categorized as “superhosts” – defined by Airbnb as the “top rated, most experienced hosts.”
Although professional property managers represent only 1% of all Airbnb hosts, they manage 23% of available listings and generate 28% of total revenue, according to AirDNA. The data also shows that professional hosts have increased their market share over time.
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The fact that Airbnb is becoming more dependent on professional property managers should not be a surprise. Professional property managers in the United States markets represent whole home inventory instead of shared home inventory. Many professional property managers also invest money in better photography and copy, offices with full-time employees and dedicated cleaners and maintenance and improved safety items like remote keyless locks.
The real surprise is the increasingly chilly relationship with many larger property managers that Airbnb has created.
Airbnb creates an adversarial relationship with vacation rental managers through negative practices that include:
This negative conduct has resulted in property managers actively looking for technology solutions like Guesty, Hostfully, Streamline and others that allow them to easily distribute their inventory on alternative channels like Expedia, Booking, VRBO, Google Travel and their own direct websites.
These systems also make it very easy to create higher rental rates on Airbnb to encourage guests to book on their own websites.
Vtrips’ answer to mitigating the ongoing headaches of doing business with Airbnb is to mark up the rental prices on its site and advertise that our website always has the lowest price.
Steve Milo - Vtrips
Vtrips’ answer to mitigating the ongoing headaches of doing business with Airbnb is to mark up the rental prices on its site and advertise that our website always has the lowest price.
Other property managers have adopted the same tactics of diversifying the distribution of their inventory and marking up rent to guests on the Airbnb channel by as much as 30%.
Airbnb stock dropped recently after a report that many hosts are marking up prices to encourage guests to book direct and save money. An analysis by investing blog the Bear Cave uncovered that “Airbnb’s top professional hosts are building out their own booking platforms and offering cheaper deals to cut out Airbnb and grow their own email lists and distribution. … In short, Airbnb’s future will look a lot different than its past as the company will now need to compete against its best and largest hosts.”
Why is Airbnb so adversarial to large property managers? Does it all start with CEO Brian Chesky, who stated, "We don't want property managers who are going into this for the money,” in the 2017 book “The Airbnb Story.” "Our core community are ordinary hosts, people renting and sharing the homes they live in. We think that's very special."
It will take more than virtual workshops on Airbnb’s mission to stop the continuing diversification of property managers away from dependence on a hostile channel like Airbnb.
Investors who believe in the long-term future of vacation rentals are beginning to realize that supply is king. And companies and CEOs that alienate their largest suppliers are not sustainable for the long run. In other words: a “melting ice cube.”
Is it possible that once you cut through the clever brand marketing, Airbnb is basically a mature company with immature leadership?