Airbnb To Become The World’s Largest Estate Agent?
A few weekends ago, I stayed in an Airbnb property with my parents and girlfriend. I’m a big fan of the platform and have used it to find apartments and homes around Europe from Krakow to Prague and Berlin.
This particular stay was a lot closer to home. A short bank holiday weekend away in Chichester, England, only a 45 minute drive from me in Southampton.
The property was a converted outbuilding on a much larger plot of land that included the host’s stunning family home, a swimming pool and tennis court. The latter of which we made great use of in 23C sunshine.
In the ritual of exchanging pleasantries upon arrival, our host explained to my dad how they had themselves stayed in the outbuilding as guests a few years ago.
After a similar family holiday to the property, they were so impressed that they made an offer on the whole plot that their hosts could not refuse. They moved into the main building and listed the outbuilding on Airbnb themselves, taking ownership of the side business and its handsome source of rental income.
This story got me thinking about how similar property deals must take place around the world inspired by life-changing Airbnb visits.
Mapping The Future of Airbnb
Ever since I first came across the company, I have had an interest in Airbnb, retelling their origin story multiple times to friends, including their early attempt to sell Barrack Obama themed breakfast cereal (coined “Obama O’s”).
What I admire most about the company is their desire to create and sell experiences, rather than simply rent out properties. They aspire to become a “one-stop shop for travel” providing “end-to-end experiences”.
Anyone who has used the site recently will know you can now book onto any number of “local experiences”, organised by hosts, rather than just find accommodation. (A Hemingway tour of Parisian cafés caught my eye.)
You can also find restaurant reviews on the site now, much like TripAdvisor, with the ability to even make reservations if you are in the US.
Much like Uber have moved into the fast-food delivery space with Uber Eats, Airbnb is expanding into complementary industries. The sky is the limit when it comes to the tangential markets available to them — or perhaps not as co-founder Brian Chesky has already mentioned “secret plans” to launch an airline, with a Skyscanner type platform being an obvious move too.
Returning to my most recent Airbnb experience, however, one new market opportunity stands out above all others, although it would see something of a departure from their “one-stop shop for travel” vision.
This is the innate potential to evolve into a brokerage platform where Airbnb hosts might also sell their properties (as effectively self-contained businesses) to other would-be hosts.
Predicting A Second Rental Revolution
The property market has been one of the most consistent creators of wealth for centuries with property-owners building large portfolios, benefiting from the historical trend of rising house prices as well as regular rental income.
Of course, Airbnb has already disrupted this ancient market once.
Many landlords who might have previously rented their properties annually through a lettings agent, now generate more revenue letting their properties and spare rooms out on shorter contracts through Airbnb.
This has infamously challenged housing markets and existing legislation.
Airbnb has created a new class of property entrepreneurs, no longer just the mega-rich but the resourceful lower-middle classes with surplus space.
The company takes great pride in providing the platform that has launched thousands of businesses and side-hustles world-wide.
Already traditional estate agents are having to acknowledge this trend in the rental market, selling properties with “Airbnb potential”.
It is only logical that Airbnb establishes itself in this space. In other words, expanding to offer a real estate platform where users can buy and sell Airbnb businesses (notice I wrote “businesses” and not “properties” — more on this later).
It is entirely possible that people might use Airbnb to find their future family-home. Alternatively, there is interesting potential to allow for a kind of “test-driving” when it comes to buying or renting a property longer-term.
But I’m proposing a platform designed instead for entrepreneurs…
Airbnb already collects information on each property from its going rate to booking history and popularity based on user-written reviews. If I wanted to buy an Airbnb property, where better to go than to Airbnb?
I can see exactly how much a host charges in rent, its popular periods, plus invaluable feedback on what could be improved or what guests enjoyed the most.
Those looking to get in the game for the first time, or add to their Airbnb portfolio, could effectively buy a ready-made business from previous hosts.
This transaction might include a handover period, a shared equity arrangement or consultancy about how best to sell the area. The existing host might even stay on in the employment of the new owner.
Clearly, there is a great opportunity for investors, with potential arrangements and services that transcend a conventional property transaction.
The Next Chapter In The Airbnb Narrative?
When Airbnb commercialised the spare-room and reinvented the second-property, they did so in a way that made their hosts admirable. This was no mean feat.
Hosts could have easily been perceived as an exploitative class (like landlords who get bad press). They achieved this through great marketing.
They told a story about global neighbours and fellow travellers.
If Airbnb were to execute the lucrative idea I have only sketched out, undoubtedly their core narrative would be scrutinised. An emerging breed of Airbnb hosts — commercial investors— would play an increasingly prominent role.
Critics might call this move “selling-out” but the way co-founders, Brian, Joe and Nathan, talk about their hosts as entrepreneurs gives me faith that their story-telling ability would survive this new direction, with their narrative in tact.
If Airbnb choose to pursue this opportunity (and who is better placed?), they would surely become the world’s largest estate agent overnight, among many other things, and harbour a second rental revolution to rival their first.