Is Airbnb trustworthy? Are the bargains worth it?

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This was published 9 years ago

Is Airbnb trustworthy? Are the bargains worth it?

By Lizzie Porter
Updated
Appeal factor: Airbnb provides good-value accommodation for travellers in destinations where it is at a premium.

Appeal factor: Airbnb provides good-value accommodation for travellers in destinations where it is at a premium. Credit: Rebecca Hallas

In six years Airbnb has become a $10 billion global business, but do its bargain stays come at a price?

Airbnb, anyone? If you have not heard of it, where have you been? Few people took notice when this San Francisco-based travel company was set up in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk, who came up with the idea of putting airbeds in their San Francisco loft and renting them to delegates attending a design conference. Fast forward six years and Airbnb is now one of the world's fastest-growing travel companies, worth a cool $10 billion – more than internet sensations such as Zoopla, Snapchat, Dropbox and the Trainline.

Since 2008, more than 15 million stays have been booked through Airbnb, which now lists 800,000 properties worldwide on the site – more than on Booking.com, the leading hotel booking site. Rentals range from castles (there are 600 available) and Greek villas to Italian treehouses and shared bunkhouse accommodation in Solihull.

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It won't stop there. Earlier this year, the company raised another $A529 million to help fund further expansion. Unsurprisingly, hoteliers are rattled by Airbnb's rapid rise, some B&B owners are up in arms, and there are legal wrangles and concerns about safety and security – but there is also an army of devotees from Middle England to the Middle East.

How does it work?

The premise is simple: Airbnb provides an online marketplace for "hosts" to rent out spare rooms or properties, and guests to book them. Property-listers can specify the type of accommodation (shared or private) and booking periods, set "house rules", and upload photos. The website is easy to use and intuitive for both hosts and guests, with multiple search criteria and results that are cleverly displayed with an adjacent map view and picture-based listings. Some hosts allow instant booking, while others require a request to be submitted first. Airbnb makes money by taking a 3 per cent cut on every booking from hosts, and from 6 per cent to 12 per cent from guests.

Why does it appeal?

For guests, Airbnb's main appeal lies in its offer of good-value accommodation in destinations where it is at a premium. This is particularly true in popular US and European city centres, or during peak periods for travel, such as festival or conference seasons. Accommodation for the Edinburgh Festival, for example, is notoriously hard to come by, but we found options in the city for under £100 ($174) a night on Airbnb over an August weekend. A loft apartment for two in Rome, just behind the Pantheon, goes for $295 for two nights on a Friday and Saturday at the end of September. By way of comparison, the same dates for two at the nearby four-star Hotel Tiziano would cost €398 ($553), albeit with breakfast (and usual hotel services) included.

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For hosts, Airbnb offers the chance to make money from spare space. Parents whose children have flown the nest, for example, let rooms on Airbnb. Residents of cities where rents are high use the site to contribute to living expenses.

Where can I stay?

Airbnb's growth has been extraordinary. It now offers properties in 190 countries. You can rent a private room in Kabul for $42) a night should you wish, but so far this year more than 50 per cent of Airbnb's bookings have been for stays in Europe, with Paris proving the most popular destination in terms of listings. The market for Airbnb rentals in London could also increase following the announcement in June by Eric Pickles, the Communities Secretary, that restrictions on the short-term renting of properties in the capital are to be withdrawn. The company is also broadening its offering for business travellers.

Who uses it?

Airbnb users can't be pigeonholed into one socioeconomic group and are not limited to the stereotypical budget couch surfer. Families are likely to use the site to book holiday villas. Hosts may be couples with a spare property or room to rent out. Liz Keating, from Australia, who has spent a year travelling and living in Germany with her teenage daughter, has booked accommodation on Airbnb about 10 times, and is attracted mainly by value and choice. "I usually pick a central location close to transport," she said, "and I like the unique properties offered – we stayed in a garden cottage in Memphis, a microhouse in Washington and a 17th-century stone house in Bordeaux."

But can you trust it?

Airbnb has made its peer-review system one of its linchpins. Both hosts and guests – some people act as both – leave reviews for each other. These can be submitted only after a reservation, in an attempt to ensure all are authentic.

In 2013, Airbnb introduced a "Verified ID" function, which matches users' online identities (for example, through existing Airbnb reviews or Facebook) and offline documentation, such as scanning photo ID. However, the scheme is not yet obligatory (unless booking last minute).

The system of trust on which Airbnb operates is not faultless, and properties may not be all they appear. One user told about a less-than-savoury experience of renting a property in New York. Esoteric décor aside – the tampon art on the wall was stranger than the online photos had illustrated – the electrics were the major concern. She said: "The flat wasn't properly wired, possibly because it was a converted small warehouse, and the lights were hooked up to one plug in the centre of the flat, then draped over the cupboards and pinned roughly to the ceilings. The one socket looked pretty overloaded.

"There is also only a limited chance of a refund if you cannot take up your booking. There are five levels of cancellation policy – decided by the host – ranging from a full refund one day before to much stricter terms under which you would get only a partial refund even if you cancelled more than 30 days in advance. If a host cancels a guest's reservation, the traveller has the choice between transferring payment to a new listing, or receiving a full refund. Not that it will help if you have already booked your flights.

Are there rivals?

Onefinestay, founded in 2009, operates in a similar way to Airbnb, but its offering is very much a luxury one, with a select group of properties in London, Los Angeles, New York and Paris. It doesn't offer rock-bottom prices, but does claim to provide the chance to slip into the life of the property's owner for a few days – an attractive prospect when, for example, the owner has an immaculate town house in New York's West Village.

Housetrip.com – with 320,000 properties in over 20,000 destinations – claims to offer whole houses for the price of a hotel room. Earlier this year, it released research claiming holidaymakers could save up to $150 a night by staying in holiday rentals rather than hotels.

What does this mean for traditional B&Bs?

Alastair Sawday, founder of Sawday's, the members' association for characterful bed and breakfasts in the UK, Ireland and continental Europe, expressed concern about the lack of quality-control on Airbnb. Conceding that it was a great idea, he said that it was now an uninspected and "crowded marketplace, heaving with a mix of crooks, opportunists, wheeler-dealers and decent folk. It is devoid of style, character, meaning and any underlying purpose other than making money for its investors.

"As for hotels, a study published this February by the Boston University School of Management suggested that if Airbnb continues to grow at its current rate, it will make a 10 per cent dent in the takings of budget hotels – those to which Airbnb poses the greatest threat – by 2016.

Should I be worried about security?

Using the rental service poses risks for both hosts and guests. In 2011, the company admitted that it had "really screwed things up" after a host in San Francisco had her apartment vandalised by Airbnb guests, who also stole her grandmother's precious jewellery and passport. Airbnb responded by setting up a 24-hour customer hotline and introducing damage cover for loss due to theft or vandalism. At present, hosts in Australia and 28 other countries are covered by a $900,000 "host guarantee", but this does not cover everything and Airbnb recommends that hosts obtain appropriate home insurance on top of this.

What about health and safety?

Concerns have been raised about the lack of regulation applied to Airbnb hosts regarding fire safety, food hygiene and insurance, particularly with regards to inspections. In the "responsible hosting" section on its website, Airbnb advises hosts to ensure that the property meets government safety guidelines for the area.

Are there any legal issues?

Yes. Airbnb has faced numerous legal challenges in the countries in which it operates. Following a tussle with the New York Attorney General over hosts potentially flouting a city rule on short-term lets, Airbnb must now hand over anonymised data for further investigation. Earlier this year, the Catalonian regional government fined the company $45,000 for what were deemed illegal lets in Barcelona. In Berlin, a law has been introduced that means short-term lets will be permitted only with the authorities' prior permission.

In its terms and conditions, Airbnb says that it is up to individual hosts and guests to ensure that their use of the site does not violate any laws or regulations, such as the terms of their lease, many of which ban subletting. It says that the breadth of countries and cities in which hosts live means that different laws will apply to different users. In other words, you pay your money and you make your choice. Increasingly – and in spite of these concerns – that choice seems to be Airbnb.

The Telegraph, London

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