What is the future of Airbnb hosting?

It’s February in London and Brexit is here. The UK left the European Union on Friday 31st January at 11pm. My first European guests since Brexit arrived about 1 hour later from Italy. They were nice guests and for them at least it seems nothing was any different. Strictly speaking nothing much hans changed. The UK is in a transition period for the next 12 months where as far travel for EU citizens into and out of the UK there is no changes. No new visa is needed. After that what will happen we don’t know yet.

What is the future of airbnb?

I recently read a forum thread about being a landlord and/or a airbnb host. Someone left some interesting comments that I agreed with and made me think more about the future of airbnb.

I have copied the post in full as I want to show it in entirety in respect for the writer. The link to the forum post is here. https://www.housepricecrash.co.uk/forum/index.php?/topic/235721-landlords-regret-investing-in-buy-to-let/

i get hotels regular, and the airbnb concept is in for a massive crash.  the market is completely saturated and rooms very cheap. there is hardly a city in the uk that you cant get a 30 quid room infact none if you look hard enough. and as airbnb is mostly homes with 2 or 3 rooms whats happening is many are getting fed up. lucky to achieve 50% occupancy rates and very little in the winter. the changing of sheets and tidying up and organising of it all is creating a situation many are making very little. add in the fees airbnb take and mortgage interest and very soon half are begging for a full time tenant again. 

hotels have got smarter and better and takling airbnb head on and i can get room after room with a breakfast throwing in for 30 quid something no airbnb can do. i know people doing bnb that have started to refuse 1 or 2 night lets and are only looking for week long lets due to the work involved switching over to new people each night. hotels can do this due to economy of scale with 20 or 30 or 50 rooms full a night. 

hence when i rent rooms now i never do airbnb for these reasons. 

1. airbnb is often more expensive

2. airbnb is full of amatuer landlords that make you feel uncomfortable to relax in their precious homes

3. the neighbours of tese homes are often hostile and fed up of people coming and going

4. you get a breakfast at a hotel

5. airbnb owners will be far more active in complaining or witholding any monies due to any damages due to the same reasons amatuer landlords do the same ie granmas precious house where they really despise anyone staying but need the cash.

5. i want informal, heres your keys and have a nice evening. airbnb is often full of owners far too interested in your comings and goings and what your up to than a hotel is. 

6. mostly no owner on the premises what if the loony in the next room starts running around the place with an axe

7. big chance of getting to the property but then having to wait around for the owner to arrive to gain entry.

8. as above but with far more restrictive times to get keys etc than a hotel unless there in all day and live next door. 

9. more chance of a perv sticking a spy camera in the shower room

10. far more penny pinching going on with heating etc especially when they only got one room let and only got 35 quid for it, they dont want you burning the heating all night whereas a hotel with have 30 or 40 guests and a bigger more economical heating system. (this is actually a huge moan of people that use airbnb, )

 

Should you become a host or perhaps stop hosting?

I can only tell you about my own experience of being an airbnb host. I don’t want to make assumptions of how other hosts find the whole system and how they benefit. For me it has been mostly very good. I have empty bedrooms in my house and wanted to let them out for the extra income. So i gave it a try.

I was initially surprised when my first airbnb bookings came in. I had 4 empty rooms in my house. Two I let to people from my work (on a lodger agreement). They were longer term but not fixed (i.e not locked in for a year). One left after a year or so. The other stayed for 2 years I think. The remaning two rooms I would put on airbnb and try my luck. My house is reasonably central in London but is not central enough that you can walk to the main tourist sites. The distance to the centre might seem quite far for someone who is not used to the size of London. I assumed my place would be nothing but a last resort type place but at 2000+ guests so far it’s exceed my expectations.

If I search right now for a room like mine in a better part of London then I can see similar listings for about £40 which is double my price. To be honest if I were a guest I would probably pay the extra money for the better location. But not everyone will feel the same way. I do offer a alternative deal for a more price conscious traveler. But it does tell me that unless the upper end prices go up mine will probably stay low too since there would be no reason to save the extra.

Just for comparison an Ibis hotel in my part of London is £50-60 a night. So my airbnb is about half the price of a proper hotel (when you take into account the fee airbnb charges the guest etc). Which is good but I recall before airbnb existed a decent but cheap London hotel would be about £80-100. The hotels have gotten more competitive since presumably they were losing a lot of business to airbnb.

Airbnb seems constantly pushing me to lower my prices. This may be for my own good. Assuming airbnb’s data is correct people are expecting lower prices. It’s very possible that if your listing is very special (like say you can see Big Ben out the bedroom window) then you can probably ignore such advice. But if like me you have a very nice but still very ordinary room then being competitively priced is a good idea. My strategy has always been to be fully booked all the time, no matter what it takes. So if I need to lower my prices I will!

I have noticed some airbnb listings are what I would call expensive. £50 or more to sleep in someones spare bedroom seems like a lot to me. Even if it is well decorated and kind of niche it just doesn’t seem right. I’m sure many of the hosts are very nice and welcoming people but at the end of the day you are only a guest in their house. When you pay for a hotel room your kind of made to feel like your the boss by the hotel employees. I’ve never known anyone apologise to a hotel owner for coming back late at night.

I do generally leave my guests to themselves. In fact I would say I almost avoid them. I don’t want them to feel uncomfortable during their stay so I stay away. Occasionally if I get a good vibe from a guest i will offer them a glass of wine or similar. But that’s about it. I don’t offer an ‘experience’.

New Airbnb 90 day House Sharing Rules in London. Do they affect me?

It’s December in London and Christmas is coming. After a very busy Autumn Airbnb has started to go quiet. I am booked most of the time but some days I have one or two empty listings a week. It has been the same the previous two years and usually pics up towards the end of January. The price I am charging for the each listing has risen slightly this year (after being flat for two years). I believe this is possible because of the lower GBP versus the Euro and the Dollar.

New House Sharing Rules in London

New rules from the Greater London Authority (which only affect Airbnb Hosts within Greater London not the rest of the UK) have come into force which will affect some hosts (but not all?). Up until 2015 rules forbid any short term lets without planning permission.

The important part of the new rules say: –

the cumulative number of nights of use as temporary sleeping accommodation does not exceed 90 nights in a calendar year

The vast majority of hosts in London will be letting out for more than 90 days a year so this could be a real problem for hosts. It is possible to apply for permission to be exempt from the rules by obtaining planning permission. Obtaining planning permission for temporary sleeping accommodation (effectively a hotel) is not going to be possible for most hosts as the criteria is exhaustive and would be opposed by neighbours.

You can read Airbnb’s guide to hosting in London here.

Airbnb is limiting their platform for hosts from 1st January

In a letter recently sent to hosts Airbnb says it will limit the number of bookings to 90 days (presumably the website will automatically de-list the listing when the 90 day limit is reached).

As of 1 January 2017, Airbnb’s systems will automatically limit entire home listings in Greater London to 90 nights a year…….we are introducing a change to our platform that will create new and automated limits to help ensure that entire home listings in London are not shared for more than 90 days a year, unless hosts confirm that they have permission to share their space more frequently.

 

 

Do the new rules only affect entire home listings?

The letter from Airbnb to hosts clearly says that ‘entire home’ listings are not shared for more than 90 days a year. Presumably we can take from this that those hosts offering private rooms in their house will be exempt from the 90 listing rule. The deregulation act does mention ‘This applies even if only part of the premises is used as temporary sleeping accommodation’ so those hosts who have only private room listings may also fall foul of the new rules.

I think that Airbnb is trying it’s best to conform with local rules (the bad press the company has received all over the world is surely on the mind of the directors) but hopefully is doing it in such a way to give hosts a chance to be seen to adhere to local rules and still host without interruption. We will have to wait and see how the new rules will affect bookings on the website. A obvious solution to getting around the rules would be to have the same listing under numerous profiles (presumably 360 days per year/ 90 days = 4 profiles needed).

It’s worth noting that up until 2015 short term lets were effectively illegal in London and the vast majority of hosts had no problems. At the very least we are now getting some clarity on what the rules are and will be in the future so hosts can plan properly. To be honest the rules do make some sense and will deter those ‘professional’ hosts from investing large sums of money buying property purely to let on airbnb. Those hosts who simply let out a spare room and work in regular jobs hopefully will be unaffected.