Sleeping on Airbnb

Jon
Jon Reid
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The Bed & Breakfast (B&B) concept is not a new one. But in recent years, several companies have made it their business to connect micro-B&Bs with customers, most notably www.airbnb.com.

Just in case you aren’t familiar with the term B&B, a bed and breakfast is typically a small, 10-beds-or-less lodging that offers overnight accommodations and a light meal to get you started and out the door.

Most often, B&Bs are located in private homes.

In the case of Airbnb and similar online booking companies like Wimdu.com or Metroflats.com, you search for a room in a particular area and get matched with potential short-term renters. Airbnb has both bases covered, offering you the chance to post an ad for your own apartment, house or that seldom-used wing in the old part of the mansion.

Let’s get the negative out of the way first thing: In the beginning, Airbnb very nearly failed as a business. In fact, during the Obama versus McCain presidential race, the owners took a gamble with their remaining funds in a last ditch effort to keep their virtual doors open. They bought cereal.

The story goes that the entrepreneurs designed and packaged 1,000 boxes of generic cereal emblazoned with a parody image of each contender. Your choices were Obama Os or Cap’n McCains.

Recognition at last

This staple hawking stunt earned the struggling startup close to $30,000 and, perhaps more importantly, recognition. I think they effectively tapped the power of the massive political engine that is a U.S. presidential campaign and sidetracked it into Airbnb marketing.

An ethical point against Airbnb is what some term black hat spamming. We’ve talked about spam before, and if you have an email account then you have experienced it first hand. The key here is the black hat. You see, in North America, there are very specific laws around sending people email. Some forms of mass emailing are acceptable and others are not. Hence the black hat.

If I send unsolicited email to every person in my contact list about some product or service that I’m selling, that’s spam. There are a lot more regulations in the details but that’s the gist of it. And that’s what Airbnb has been accused of — sending unsolicited emails to people listing their rentals on other sites in the hopes of getting them to come list with Airbnb.

To finish up the trio of bad news for Airbnb, in the early days there were incidents of property damage. In at least one case, severe property damage, which Airbnb was notoriously quick to not accept liability for.

Legally they were right. In the court of public opinion, they could not have been more wrong. One bad story led to another and all were compounded by the company’s apparent reluctance to help repair the situation.

In the end, Airbnb did give out funds to repair the damage to the property, if not the relationship. And since that time, Airbnb has gone much further in offering damage recovery insurance. Up to $1 million, underwritten by Lloyd’s of London, is covered under what they term the “Host Guarantee.”

All that aside, it’s very hard not to call Airbnb a winner today. Airbnb has claims of 10 million guest nights booked since it’s founding in 2008. Also, Airbnb reports it is active in more than 19,000 cities and 192 countries. Part of this growth has been through mergers and acquisitions of similar businesses and outright competitors, especially in Europe where the practice has been common for a very long time.

Valued at $1.3 billion last year, and receiving venture capital based on that valuation, Airbnb is looking at a potential valuation of $2.5 billion this year to accompany another round of funding.

No matter how they got there, Airbnb is seated comfortably now.

Geographic location: U.S., North America, London Europe

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Recent comments

  • Colin Burke
    February 16, 2013 - 11:34

    David, that piece is neither news nor advertising but a column. A columnist puts into his column anything he thinks might interest people who are interested in things which interest him. I found this particular column interesting enough to read all of it after being initially attracted by a comment upon it at this website. I hope you are not suggesting that the columnist in question, who is paid to write a column about "computerism" or "computerdom," is taking money under the table from someone not his employer to write specifically about the specific subject of this particular column. That would be a bit dishonest, if you like, but simply being mercenary -- as a columnist might be in writing so as to attract a paying advertiser for his paper, which I'm not suggesting was done here -- is not necessarily dishonest; our whole God-forsaken society and way of life are almost utterly mercenary; hence the phrase "sex-trade workers" for people who in the long run are no worse than the rest of us.

    • david
      February 17, 2013 - 16:17

      Airbnb is not a public service, it is not a charity, it's information not universal nor objective. It is a business. A busienss in a competitive industry. That neither the author nor the editorial reviewers at this newspaper are aware of a conflict or complicity in the publishing of this tripe is of no consequence...if Mr. Reid isn't bright enough to be getting paid 'extra' by this company for being its de facto shill, that doesn't make this any less of an advertisement.....just a cheaper one. And if indeed so, then I would agree with the author that, in this regard, "it’s very hard not to call Airbnb a winner today". Just give your head a good shake!!

    • Mr Corner Brook
      February 17, 2013 - 19:26

      What?????? Oh ya, BTW, David does sound ridiculous here (again). And he's obviously embarrassed...rightly so. He didn't make sense and realized it only after his intellectual superiors pointed it out.

  • Good one
    February 15, 2013 - 11:42

    With every post David is unknowingly proving everyone's point about him. But it just goes over his head.

  • Petertwo
    February 15, 2013 - 06:56

    Well, David, there's a case of the pot calling the kettle black, Welcome to the world of the illiterati. How does one act of "blatant advertising" differ for another? Blatant is blatant whether it be B&B's or McDonalds, and you'd irk the ire of a few nutritionists with your advert, being hooked on fat is not good for you. Moderation is better. Still, Jesus said it best "It is not what goes into the mouth that hurts(condemns) someone, but what comes out, this is what hurts(condemns) a person". You really have'nt lived long enough to know it all, life's too short anyway. You may need another hobby, something really worth your while. In my opinion.

    • david
      February 15, 2013 - 11:56

      To recap: Topic completely lost, gutless personal attacks lobbed hard and heavy, political affiliations presumed and ridiculed, and religious dogma used as a weapon.....I think we've covered many of the "Western Star Comments" bases here. Good job.

    • Steve II
      February 15, 2013 - 12:20

      Somehow I always get this mental picture of "David" sitting in his mother's basement typing at his computer waiting for her to call out for supper time?

    • david
      February 15, 2013 - 15:45

      Well Stevo, if telling yourself little stories about your adopted "nemesis" gets you through the day, fill your boots. Let it not be said I do not support finding alternative mental health treatments.

  • Whiny Dave
    February 14, 2013 - 20:34

    Poor little fella. Likes to dish it out but can't take it. So insecure of his postings that he must constantly patrol the pages. It must be sad to be so negative all the time. He must be Harperite because he is the embodiment of defeatism. All that misery and so much time to worry about what others think. Dude needs a job.

    • david
      February 15, 2013 - 10:03

      We are have our crosses to bear, don't we? And some more serious than others.

    • Whiny Dave
      February 15, 2013 - 11:36

      Yes, and you are the cross that we all must bear. If you had a cross to bear we would never hear the end of you whining about it.

  • david
    February 14, 2013 - 16:13

    Big Macs are delicious, and much better than KFC chicken. With a delicious side of fries, it makes a filling and cost-effective meal. And McDonalds is a very good corporate citizen. Yup, I'd eat there every day if I could, because it's better value than Tim Horton's or Pizza Delight...those are just gross. So get to McDonalds, everybody, and if you can afford it, you should buy the stock! And that's my "opinion", which therefore qualifies it for this newspaper to publish in its Opinion section....right?

    • Shawn
      February 15, 2013 - 11:32

      Shameless plug for your employer David?

  • Zoe
    February 14, 2013 - 12:34

    First, thank you, Newsreader. You have so eloquently put all the things I no longer have to. Second, security laws, David? How so? All of these valuations and numbers are knowledge in the public domain. Besides, if someone did have insider trading knowledge why would they share it in a public manner? Now, on the other hand, writing in public, some defamatory comment could result in you facing a charge of libel in civil court. If you were as knowledgeable as you think you are, you would know that.

    • david
      February 14, 2013 - 16:00

      Zoe, it's securities, not security. And the shares of Airbnb do not trade. And if you don't know either of those two things, any furtther "discussion" of legal obligations is clearly pointless. I am glad to read that you do ont feel any need to post anything more, though. Really.

  • Ben frank
    February 14, 2013 - 12:20

    "Any fool can criticize, condemn and complain and most fools (i.e. David) do".

    • david
      February 14, 2013 - 16:05

      That adds a lot, doesn't it? It's so nice to get philosophical quotes from such thought-provoking minds. Corner Brook.....a real college town.

  • Newsreader
    February 14, 2013 - 10:33

    For the information of our constant friend, David, this isn't a news story, it's an opinion piece - so the whole point is for writer to express informed opinion. Jon Reid does so very well here, and in balanced fashion. Incidentally, if there is one thing more irritating than an attention-craving crank, it is a confused, ill-informed attention-craving crank. After all, our self-appointed critic in residence is the same guy who's never heard of interior paint. And who thinks that local police make major arrests only by accident - like when the person they stop for a driving infraction happens to be under a Canada-wide warrant. To wit, the ever-lengthening list of things about which Mr. David knows diddly-squat just included the difference between news and opinion. How long that list will become, only time - which David seems to have in endless supply - will tell.

    • david
      February 14, 2013 - 12:31

      Wow...pretty thin-skinned, defensive, rude reply. Regardless, this is a blatant advertisement for a website business, and should be in the Business section (if anywhere). To call it an "opinion piece" is your own opinion...but it wouldn't be for a thinking, conscious person....in MY opinion. I can comprehend what I read ,and I can differentiate between commercial advertising and information. And this is obvious, blatant, otherwise pointless, advertising. As for the off-topic portion of your "critique" : I've been called worse by better.

  • david
    February 14, 2013 - 09:18

    This is a blatant advertisement, not a news story. If it had been aboyuut the general concept of B&Bs, or dealt equally with competing services, it could have been a news story. But it isn't. It is an obvious, shameless, commercial...and that last bit might even contravene securities laws. Or doesn't anyone in "journalism" know the difference any more?