Is Airbnb changing?

By | Category: Travel rumblings

The news that Airbnb is to build 300 rental properties in Kissimmee, Florida is another case where a company is blurring what it originally was. Just like TripAdvisor was a review site and changed into an online booking site it looks as though Airbnb is changing too. What was one an online facility allowing owners to share the homes and make some extra money from visitor stays, it seems as though it is now beginning a hotel-like business plan where it partners with property developers to provide rooms, apartments etc for visitors.

The company says that it wants to build 2,000 Airbnb branded units in just the next two years.

The Kissimmee project is in conjunction with a company called Newgard Development Group, a company that has been involved in real estate in the Miami area and, as far as I can see, little else outside Florida. That suggests Airbnb will be talking to potential partners elsewhere.

Newgard says that it wants to build 2,000 Airbnb branded units in just the next two years.

Airbnb admits that it is trying out a new business model to launch its first branded, purpose-built apartments. This model is claimed to be a mix of conventional apartment housing and a serviced apartment model. Tenants who rent the apartments may list them through Airbnb for short term stays of up to 180 days a year.

Virtually half of the year will be given over to earning money from their properties.

Will it now become a property developer having spotted places in the world where there is a need for more tourist accommodation? Many destinations accuse it of driving up local rents by encouraging investors to move in and buy property. Will purpose-built apartments attract local taxation as hotels do? One of the complaints made is that tenants using their own properties reduce the tax take that central and local governments charge.

The plan is that Newgard will pocket 25% of the rate charged by tenants for stays while Airbnb takes a 3% cut leaving the apartment owner with 72% of any revenue the apartment earns. But there will be a mandatory cleaning service to be paid for and any local taxation including any surcharges that local councils may impose. And what happens to the Newgard model if apartment tenants don’t wish to rent out their property? Or is it in the contract that property owners must rent out their properties?

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