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Airbnb’s biggest threat hits close to home — and can make your next trip cheaper

admin by admin
April 11, 2023
in News



There’s unexpected competition emerging in the vacation rental business.

We hate to inform you, Airbnb, but the call is coming from inside the house.

Airbnb hosts might build their business off the platform, but several are now wooing repeat customers away from the vacation rental platform entirely, according to a report out this month from The Bear Cave and reported on by Reuters.

Professional rental companies often designated as Superhosts — a term the company uses to denote top-performing rental owners — are cutting out Airbnb by instead having renters book directly with them or via their own listing platform at more affordable rates.

It might be bad news for Airbnb, but it’s great news for your wallet heading into the summer vacation season.

One of those companies, Heirloom, lists luxury vacation rentals on Airbnb but also lets guests book on its own website. A two-night stay at one of Heirloom’s Nashville listings is $125 less per night than what you’d find on Airbnb, according to the report.

That presents a fresh challenge to Airbnb, which has been dogged by complaints recently over soaring cleaning fees, service fees and other charges that quickly add up to make the platform suddenly less appealing than hotels.

Airbnb CEO Brian Chesky noted the company was moving toward a practice of upfront pricing to be more transparent about how much a guest would ultimately end up paying for a stay.

However, cutting out the company entirely by going directly to a host makes things more affordable to travelers. The Heirloom direct listing in Nashville charges half the service fee that comes with booking the same property through Airbnb.

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Workarounds on the rise

There has always been some degree of this practice in the Airbnb world, with hosts sometimes working directly with renters instead of having them book off the website and face the various service charges.

It worked both ways, as renters pay less and hosts make more money by not having to pay Airbnb a fee. It appeared Airbnb tried to block the practice under various security measures like blurring out phone numbers and emails when hosts and guests would message one another on the platform.

While Airbnb hasn’t explicitly said hosts going off book with reservations is a widespread practice and a financial burden on the company, the company’s most recent annual filing with the U.S. Securities and Exchange Commission notes the following:

Some of our Hosts have chosen to cross-list their properties, which reduces the availability of such properties on our platform. When properties are cross-listed, the price paid by guests on our platform may be or may appear to be less competitive for a number of reasons, including differences in fee structure and policies, which may cause guests to book through other services, which could materially adversely affect our business, results of operations, and financial condition. Certain property managers reach out to our Hosts and guests to incentivize them to list or book directly with them and bypass our platform, and certain Hosts may encourage transactions outside of our platform, which reduces the use of our platform and services.

Airbnb did not respond to TPG’s request for comment. However, The Bear Cave report shows just how successful the workaround has become in the Superhost community — and the threat it poses if more professional property manager Superhosts follow in Heirloom’s footsteps.

Professional property managers only account for 1% of all Airbnb and Vrbo hosts, according to vacation rental data platform AirDNA. However, they manage 23% of available listings and generate 28% of total revenue. That could put a huge dent in Airbnb and Vrbo if travelers start migrating to more affordable listings for the same property offered up on a different site.

Reuters noted Airbnb’s stock price tumbled by as much as 6% following the release of the report, which also outlined the various complaints guests have about staying at Airbnb rentals — from hidden cameras in bathrooms to surprise cleaning requirements and last-minute host cancellations.

How to use this Airbnb game to your advantage

As with any major purchase, the message here is a simple one for travelers: Do your research.

TPG found the same four-bedroom house in Provincetown on Cape Cod in Massachusetts had a wide array of nightly rates depending on the platform for the same week in October. While Vacasa had the listing at $899 a night, Rent by Owner had it at $904 per night. It went for $1,074 per night on Airbnb, while Marriott’s Homes & Villas by Marriott Bonvoy platform commanded the highest rates at $1,249.23 per night.

Airbnb and Homes & Villas might not like getting undercut by a competing business on the same listing, but travelers willing to do a little bit of legwork ahead of booking a vacation rental can often win out with their wallet.

As Smokey Robinson and the Miracles once sang, “You better shop around.”



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