Pros & Cons about AirBnb: a critical view

With this article I'd like to present you several aspects of AirBnb, one of the most successful travel platforms of the XXI century, on a critical point of view.

First of all, AirBnb was born in 2007 from the idea of two roommates with the intention of making some extra bucks, because they couldn't afford their own rent. AirBnb was born to persuade strangers to sleep in one another's house and in a few years it became a $31 billion company capable of disrupt the hotel industry. Everything started from the idea of transforming their loft into a bed - an air mattress actually - & breakfast to host people in San Francisco for a few days. This is why it's called ''Air''Bnb.

After several rejections from investors, debts and marketing campaigns with the selling of cereals boxes, Air Bed & Breakfast changed its name into AirBnb in 2009 and the company started attracting investors. Its fast growth came along with several legal battles: guests causing damages in the houses, people fined for illegally renting on the platform, housing shortages, the flexibility of their policies compared to the one of traditional hotels, complains from the local citizens and so on.

Let's see together a few aspects in favour and against the platform to help you having a critical point of view about it.

Pros

1. Meet the locals

A positive aspect of AirBnb is the possibility of sleeping by the local population. It allows travellers to have a more immersive experience in direct contact with the culture of the destination and its people.

Of course, this depend on the destination. For example, in Cuba AirBnb allows local Casas Particulares to have a greater visibility when international travellers are looking for a place to stay while visiting the country. They're basically the place where the hosts live plus a few more rooms to rent. This was for me a great opportunity to meet the locals, spend time with them and understand their lifestyle. On the contrary, in developed countries, AirBnb has now became a simple extra source of revenue and very often travellers don't even get to know or to see the host. This aspect of cultural sharing is then a bit lost.

2. Flexibility and fast growth

As the other platforms, AirBnb benefits from this economic model that guarantee a great flexibility and extend the business opportunity to a greater number of people. Potentially, everybody could became a host and gain an extra revenue from the rental. The increase in tourism capacity is also an element of attraction for the destination and a contribution in the GDP of the country.

Flexibility means that hosts can decide whenever the property is available or not to tourists and flats can be easily adopted according to the situations. For example in Milan, the initiative Open Homes allows 67 apartments to host refugees waiting for a long-term placement and in France the platform used some properties for sanitary workers during the Covid-19 pandemic.

2. Strategic location & cheaper solution

Considering the lofts are owned by locals, AirBnb's offer is generally interesting in terms of location. The platform gives you the possibility of sleeping in central neighbourhoods where hotels rates are much higher. If not right in the center, lofts are often close to public transports in order to reach the main attractions very quickly. AirBnb is very popular among people under-30 because of its price range. The platform offers good deals and helps the democratisation of tourism, it's the same concept of low-cost flights.

3. Evaluation

The evaluation system is double: it's used by travellers to rate their staying as well as by the hosts to give a note to the guest. The positive aspect is that evaluation is possible only for those who stayed in the flat, it's not an open one as on TripAdvisor. This means they're more trustful. At the same time, this concept causes another problem on a psychological level which characterises the economy of platforms: it pushes the owners to always be under pressure, worrying about a bad comment that could ruin their reputation.

4. Live an experience

Booking an AirBnb can mean living a really unique experience in terms of the type of accommodation (tree houses, castles...) and the possibility of booking local activities directly through the app. In 2017, the platform created AirBnb Experiences to include another step of the tourist staying to their offer. This strategic choice was immediately successful and it was then followed by the introduction of Adventures, making AirBnb seem like a travel agency. This new feature offers original experiences such as a trek in Nepal, a trip to Mexico looking for ufo or a gastronomy journey in kayak along Sweden.

Cons

1. Mass tourism

Travel democracy in developed country is often synonym of mass tourism. The accommodation capacity of cities increased with the introduction of AirBnb, attracting more and more tourists, especially in capitals such as Venice, Amsterdam and Barcelona.

Let's take the example of Venice, a city which suffers for the uncontrolled amount of tourists arriving every day. Venice has limited dimension, but it's a worldwide famous holiday destination, so tourism has always been subject of debate. Damaged buildings, acts of vandalism and traffic are just some frequent complaints. The so called ''Disneyfication'' is the phenomenon that happens to urban centres because of the massive presence of tourists. Local activities are gradually replaced by hotels, restaurants and shops to respond to the tourists needs and the main objective is to entertain them. In 2016, Istat registered 8 798 677 visitors in terms of arrivals from all over the world and UNESCO warned Venice about the possibility of being removed from the UNESCO World Heritage sites, because of the uncontrolled flow of visitors and practices.

The presence of AirBnb is a factor of growth for short-term rentals which have a lower impact on the local economy in terms of tourist expenditures. In January 2018, 6 784 properties in Venice were available on Airbnb. Despite the gradual legal measures taken from the regional authorities to regulate the platform, cruise ships and AirBnb are surely elements that stimulate mass tourism in the city.

2. Gentrification

In some cities, AirBnb can also be considered as a cause of the so called 'Gentrification' which means that the city centres are progressively emptied. The movement of the local population toward the suburb is due to the increase in rentals which make life in the city center more and more expensive. This provokes a significant change in the urban system.

If we take the case of Paris, there are more than 59 000 apartment listed on the platform and the debate about the negative impacts on the city is quite fierce. The elevated number of properties listed causes an increase in rents in the main neighbourhoods. Plus, finding an apartment in the city for long-term staying has become a mission impossible for the lack of flats available. Students are often obliged to sleep in tiny 'studios', because they can't afford to pay higher rentals or they're obliged to live in the most external sides of the city.

3. The change in the value chain

The economy of platforms or collaborative economies represent a new business model that experienced an extremely rapid growth in the last few years. Platforms are normally based on networks and they benefit from its effects when the number of users become consistent. It's easy to understand it if we think about social media, Uber or AirBnb indeed.

The original aim is to create an intermediary between companies and final clients through a cooperation that should be beneficial for all the actors involved. In reality, more detailed studies have demonstrated that the greater gain in sharing economy goes to insurance companies, because transactions need to be regulated by insurance contracts in order to protect the network.

4. Competitiveness

Platforms as AirBnb are accused of unfair competitiveness by traditional actors such as hotel owners. In fact, this business model evolved more rapidly that the legislation, so laws and policies to regulate them are still unclear and they lack of details. This is the reason why there are safety concerns for travellers, tax duties problems and regular listing of the properties to the municipalities are often avoided by owners. The debate about AirBnb causes many demonstrations and protests organised by the local population and tourism professionals.

So, AirBnb yes or no?

There's not a right answer, what is certain is that, as all the other platforms, AirBnb constitutes an important element of economic growth. Nevertheless, we have to ask ourself where the real gains go, especially according to the destination we are visiting. And of course, until the regulation of this modern practices are not detailed and fair, the negative effects on tourism destinations will be significant.