Some Airbnb hosts are launching their own direct-booking websites after frustration with Airbnb and other providers like Vrbo, HomeAway, and Booking.com. While striking out on their own allows them to more control independent hosts are faced with many new business challenges.
Hosts were frustrated after Airbnb allowed guests to cancel reservations this March and April as the pandemic crushed worldwide travel. While the company offered reimbursements to some hosts, many received little to no money. This was the catalyst for many hosts to go off on their own and launch their own direct booking websites.
This news is the latest in a string of recent setbacks for Airbnb. Coronavirus forced the company to postpone its IPO and instead raise another $2 billion in debt at a valuation of $18 billion dollars – down from a $31 billion valuation in 2017. The company also announced that it would lay off 25% of its staff to stay afloat amid the crisis.
More Independence Creates Business Challenges
Airbnb provides many services to its hosts that independent providers must now build for themselves – and this isn’t always easy. Independent hosts have to set up a payment system, develop rental contracts, maintain their own website, and handle their own marketing. Airbnb also provides dedicated customer support, insurance, and user identity verification.
Some hosts see this trade-off as worthwhile – while they have to do more work, they’re also able to keep all of their revenue and diversify their business.
Airbnb keeps a total of 14%-16% from both guests and hosts of the money charged to customers as a fee for using the platform. Without having to pay a booking provider, independent hosts can offer lower prices than they could previously and maintain more freedom in how they run their business.
Some hosts are banding together to build direct booking websites with terms that are more host-friendly. LetsConvention.com charges guests a 10% services fee and a small fee to hosts. Zeevou.direct costs hosts $50 per month per unit depending on the number of properties listed on the service.
Neither service has reached the same critical mass as Airbnb. While some hosts are looking for an alternative, it will be a challenge to develop or find a distribution channel with Airbnb’s reach.
photo credit: airbnb