Link travelers to rooms, via the web

When Lisa Marion’s roommates moved out of her Toronto apartment in February, she was quick to find replacements. But instead of finding one or two, she found 30.

Ms. Marion, 26, uses Airbnb, a website that simplifies the process of renting her extra rooms for travelers. The service unexpectedly transformed her into a bed and breakfast owner, earning her about $ 1,800 a month, a nice cushion as she works to start her own business.

“He pays my rent with a little extra,” she said. “I was able to modernize my house, paint and buy new furniture, which means I can charge more. “

Airbnb, which says it manages 10,000 guests per night, is at the center of a boom in new businesses creating a market for places to stay – a spare bedroom, a house when owners are on vacation, or even a cabin in the resorts. trees.

Some of these companies are taking advantage of the surge of interest in all kinds of web businesses; Airbnb plans to announce Monday that it has raised $ 112 million from investors. Last month, Wimdu, a similar company in Europe, raised $ 90 million. Smaller competitors like 9flats, Roomarama and iStopOver also hope to take a share of the rental market in the short term.

These companies say they help hosts like Ms. Marion become microentrepreneurs, while also giving adventurous travelers a glimpse into the lives of local residents, whether they’re visiting Japan or Los Angeles.

“We started to realize that there was a growing trend of people doing this and making a living on Airbnb,” said Brian Chesky, who founded the company in 2008 with Joe Gebbia and Nathan Blecharczyk. “That’s what turned it into a movement and tipped it into the mainstream.”

But those who choose to welcome strangers into their homes in this way must be prepared to do more than just change the towels.

Hosts can have problems if their neighbors, or worse, their owners become aware of their guest rotation and disapprove.

Such short-term rentals are considered illegal in certain New York City buildings, according to the Buildings Department. The city says this year it is on track to receive more than double the 483 complaints about such activity it received last year.

Then there is the unpredictability of the guests themselves. Ms Marion said a guest stole a bottle of whiskey and drank it in her bathroom. (She finally coaxed him, and he then brought her flowers to apologize.) An Airbnb host in Brooklyn’s Bushwick neighborhood was not happy to return to his apartment after a short vacation and find a full trash can. of rotten products.

Guests have their own stories to tell. A recent Airbnb client who rented a room in Manhattan described a host who wanted to watch TV late at night – on a tray in the same room as the bed he was supposed to use.

Airbnb and similar sites try to prevent bad behavior by letting people leave ratings and reviews on hosts and travelers, much like eBay. Users who connect their Facebook accounts to the site can see if they and a guest or potential host have mutual friends or a shared alma mater. The site allows hosts to require a security deposit to cover damage or other issues.

To use Airbnb, site visitors search for listings in their destination city. Once they have found a place, they can message the host with any questions about the room or its location. They then pay for the entire stay by credit card or PayPal. Airbnb holds the money until the day after travelers check in, making sure they don’t get cheated out of their money. The site makes money by charging a transaction fee for each reservation.

Much has been said about the power of the Internet to eliminate middlemen, such as travel agents or real estate brokers. But to facilitate transactions, short-term rental sites are useful intermediaries in a market that would not otherwise exist on a global scale. Similar sites appear to rent other goods; NeighborGoods and SnapGoods list things like ski gear and power tools, and Getaround, a bay area start-up, matches car owners with people who want to rent cars.

Fans of Airbnb and its competitors say that the disadvantages of staying in a stranger’s house, or leaving one in your own, are outweighed by the advantages. Hosts can earn money to help out or even cover the cost of rent or mortgage payments. And travelers who choose to stay in a house instead of a hotel can save a few bucks and gain something even more valuable: an overview of the places they are visiting.

Zoelee Worsley, 34, who lives in London and does online marketing for nightclubs, said on a recent trip to Los Angeles she and her husband couldn’t find a hotel close enough to sites they wanted to see.

“You can be a little more specific about your location,” she said. “And we hired a car and didn’t have to worry about paying extra when we parked.”

While in Los Angeles, they rented their London apartment to help cover their travel expenses. Ms Worsley said they are considering moving into a more spacious two-bedroom apartment and using Airbnb to subsidize the rent. “I don’t think I will ever come back to a hotel,” she said.

Airbnb founders say they actually complement hotels and inject low-traffic areas of popular destinations like New York City with business they wouldn’t otherwise have. “We are taking local tourism beyond the big parts of a city,” Chesky said.

Of course, hotel owners might not be too happy to face competition from start-ups like Airbnb, whose hosts aren’t required to charge accommodation taxes or adhere to security requirements.

The laws regarding this type of rental are complicated and obscure, say housing officials and real estate experts. Leases vary from location to location. In New York City, opportunistic brokers have seeded Airbnb with several properties they own or rent and fill them with a revolving door of travelers.

The city passed a law in May aimed at curbing such behavior. “What the city is trying to discourage is someone buying or renting residential rooms and turning them into a hotel room,” said Kathleen McGee, who works with the special app in the mayor’s office. Airbnb says people who use the service are responsible for making sure they don’t break local laws. “We are not classified as brokers, we are only the service,” Mr. Chesky said.

Airbnb started out in a living room in San Francisco when its founders decided to rent a few air mattresses in their shared apartment at a design conference. Since then it has grown into a global market with 100,000 listings including high end exotic villas like beach villas in Greece and entire islands in Fiji.

The company recently moved into a large echoing office in the Potrero Hill neighborhood of San Francisco. Several of its meeting rooms are decorated to resemble some of Airbnb’s most popular announcements, including a minimalist loft in Tokyo and a rustic treehouse in California.

Airbnb’s new $ 112 million round of investment, led by Andreessen Horowitz, Digital Sky Technologies and General Catalyst, gives the company a significant $ 1 billion valuation, according to a person briefed on the deal who no was not allowed to speak in public. He plans to use the money to expand overseas.

Greg McAdoo, a venture capitalist at Sequoia Capital, which has backed Airbnb, said he did so because the service has the opportunity to grow as its users mature.

“We looked beyond air beds and air mattresses because we realized that the same people who might rent an air mattress today might one day be married with a family and seek a similar transaction with a type of property. different, ”McAdoo said.


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