Airbnb is the face of the short term rental industry. It gets the majority of the news coverage and bears the brunt of the criticism.
As the industry leader, Airbnb has committed a huge amount of resources to protect and develop its reputation. The Information reported how Airbnb has built “a modern media and politics machine” to combat opposition led by the company’s influential policy and communications chief, and a former political operative, Chris Lehane.
“He [Lehane] forged a path for what an engaged, active policy team looks like for tech,” said Casey Aden-Wansbury, who reported to Lehane for five years, most recently as Airbnb’s director of federal affairs. “Nobody had done it before how he did it, in the way he did it. Others are emulating it now.”
A referendum was brewing to limit the number of nights Airbnb hosts could rent their homes in San Francisco, the company’s hometown. Airbnb spent $8 million to defeat the measure, winning handily.
Lehane convinced Airbnb executives that it needed to expand its policy and public relations team if the company was going to fend off similar threats elsewhere. The full-time policy staff grew from roughly 15 staffers in 2015 to more than 200 before the coronavirus pandemic hit. Lehane built a separate marketing team focused on political campaigns. The group’s budget overall approached $100 million, a person familiar with the matter said, and the hiring binge and ad blitz created friction with other executives.
The high stakes of Airbnb’s political battles elevated Lehane’s role within the company. Some staffers feared the whole business could come unglued if enough cities decided to strictly enforce zoning laws. The company faced growing opposition from hotel worker unions, which objected to the threat to their business from Airbnb hosts, who, unlike hotels, could operate without licenses or stringent safety rules. Hotel operators joined forces with affordable housing activists and neighborhood groups irritated by noise and parties coming from Airbnb rental properties.
By last year, Airbnb seemed to be losing the public relations war. Some key markets put stricter rules in place, and revenue was roughly flat or declining compared with the previous year in such cities as Tokyo, Berlin, Amsterdam, Copenhagen and San Francisco, according to estimates by AirDNA, which tracks Airbnb’s business.
In the process of developing a monstrous policy machine, could Airbnb have lost sight of, and insufficiently addressed its fundamental PR battles?
Tech consultant Jeff Kirk thinks so. Responding to The Information article, he questioned just how well Lehane actually “anticipate[d] and manage[d] public relations crises.” His analysis of Airbnb’s “questionable calls “and “policy failures” is noteworthy.
The fact that “party houses” became a “thing” in the first place demonstrates failures on multiple fronts. The macro issue, however, is that party houses comprise a minute fraction of Airbnb’s inventory, and the overwhelming majority of Airbnb stays pass with zero incident – a point the company has broadly failed to drive home in its messaging to the general public. (Also not good: letting people think you let elaborate scams run rampant on your platform.)
I’d further argue that Airbnb could’ve been far more proactive in dealing with the few party houses that do exist, considering they’re not exactly difficult to detect. A last-minute booking of a $10,000-a-night Beverly Hills mansion for a single evening? Or South Beach? By a college-age kid with no prior booking history on the platform or known outside income source? Or influencers with massive numbers of TikTok followers? Come on, man. While Airbnb has finally started doing more in terms of verifying the IDs of hosts and guests alike – a welcome change – most of these party houses have readily detectable common denominators, and likely could’ve been deactivated before resulting in serious problems had some folks at the company been paying closer attention.
Worse, he contended that Airbnb, in particular Lehane, did not take advantage of a Texas policy win that could have been helpful in other U.S. cities.
Airbnb has done almost nothing to capitalize on one of the biggest STR policy wins in recent years (IMO): a Texas appellate court ruling last fall that overturned Austin’s stringent ban on rentals located in single-family-residential neighborhoods, where non-owner-occupied STR were previously permitted – but then outlawed when a more NIMBY-oriented city council took office in 2015. All such preexisting STRs were slated to be phased out “no later than 2022,” which is akin to taking away existing property rights – likely problematic in many states, not just Texas.
Moreover, the appellate court went so far as to declare the ordinance unconstitutional, under both the Texas and U.S. Constitutions! (The city’s STR ordinance restricted the number of adults from unrelated households who could be inside one at any given time to six, and banned outside gatherings entirely after 10pm. The court deemed this to be a violation of the federally guaranteed right to assemble peacefully.) The case is all but certain to head to the Texas Supreme Court, where the ruling would most likely be upheld – thus giving Lehane a tangible legal precedent the company could theoretically lobby to employ in other states. (While each state has discrete zoning and property-related laws, a case predicated on a federal constitutional violation could be deemed even by judges outside of Texas as a valid rationale for their own rulings.)