Airbnb
Airbnb is a paid community residential rental and booking platform founded in 2008 by Americans Brian Chesky and Joe Gebbia . The website contains in 2015 more than 1.5 million listings 1 in 34,000 cities 2 and 192 countries 3 . Based in San Francisco , the company is owned and operated by Airbnb Inc 4 .
In July 2011 , the company raises $ 119.8 million 5 . In March 2015, Airbnb raises a new round of financing that values the company at $ 20 billion 6 . In March 2017, following new fundraising, its valuation increased to 31 billion dollars 7 .
Concept
Airbnb allows individuals to rent all or a part of their own home as a second home. The site offers a search and booking platform between the person offering accommodation and the holidaymaker who wishes to rent it. It covers more than 1.5 million ads in more than 34,000 cities and 191 countries. From creation, in August 2008 until June 2012, more than 10 million nights were booked on Airbnb 8 , 9 .
Since Thursday, November 17, Brian Chesky presented the new services offered by Airbnb: experiences and places. For the experiments, the inhabitants share their social life, their interests and work at a price. And as far as the places are concerned, expert guides, knowing the places well, propose addresses of recommended places according to specific criteria. 10 , 11
History
Shortly after moving to San Francisco in October 2007, Brian Chesky and Joe Gebbia create the concept of AirBed & Breakfast (“air mattress and breakfast” in French). The original site offered the short-term rental of parts of apartment, including breakfast, for people who can not book a hotel because of saturation of the market 12 .
They have the idea while living in San Francisco . They knew that a major design conference was being organized in their city, but that all hotel rooms had been booked. They then decided to rent a room from their apartment with an air bed, a breakfast and a local reception, to some foreigners attending event 13 . From there remained the name “Air bed and breakfast”.
In February 2008, Nathan Blecharczyk, a graduate of Harvard University and joined the technical architect and became the third co-founder of the company 14 . During the early stages of creation of the company, they focus on high-profile events at which it is difficult to find a place to spend the night 15 . The Airbedandbreakfast website is officially launched on August 11, 2008 16 .
To fund the website, the three founders created a special edition of breakfast cereal boxes, inspired by the design of US presidential candidates of the day, Barack Obama and John McCain. They create the “Obama O’s” and “Cap’n McCain” 17 . In two months, 800 boxes of cereals are sold at $ 40 each, earning more than $ 30,000 for the development of their business. They are then noticed by the co-founder of startups Y Combinator 18 , Paul Graham 19 . They transform their site into20 and propose properties between the hotel market and theCouchSurfing market 21 . In January 2009, Y Combinator invites Brian Chesky, Joe Gebbia and Nathan Blecharczyk to join its business incubator for a trial period of three months 22 . While the website is already created, they use the $ 20 000 funding allocated by Y Combinator to go to New York to meet users and advertise the site 23 .
In March 2009, the name Airbedandbreakfast.com is shortened to Airbnb.com. The content of the site is expanding from shared spaces with air mattresses to whole houses, apartments, private rooms, etc. 24 A year later, 15 people work in the loft of Brian Chesky and Joe Gebbia in San Francisco. Brian Chesky there abandons his room in order to make an office for employees and lodge more than through Airbnb housing until the company moved into its first space work sharing 25 .
The company experienced rapid growth during the year and, in November 2010, raised $ 7.2 million from the funds of Greylock Partners and Sequoia Capital 26 , 27 . The three founders then announced as 700,000 nights booked on their website, 80% occurred during the last six months 28 . May 25, 2011, actor Ashton Kutcher , through his investment fund A-Grade Investments, ads will significantly invest in the company 29 .
In July 2014, the design of the website and the mobile application are reviewed and a new logo was created 30 .
Airbnb is starting to build homes between individuals and will soon open its first building stamped “100% Airbnb”, where travelers will rub shoulders with local residents. The first building was built in Japan in the city of Yoshino and is called Yoshino Cedar House , named after the kind of wood used in its construction. The building will be trucked to Yoshino in October 2016 to be installed on land sold for free to Airbnb by the town hall. It will be able to accommodate travelers in stride 31 .
In June 2017, Airbnb launched a platform for climate and political refugees, called Open Homes 32 .
In 2017, the head of Airbnb to Johansbourg announces increase in accommodation bookings in Africa, estimated at 1.2 million visitors 33 . The number of inbound visitors in Africa has evolved significantly from 572,000 in 2015-2016 to 1.2 million visitors in 2016-2017 34 .
International expansion
In May 2011, Airbnb acquires one of its German competitors, Accoleo. The acquisition results in the creation of the first international office of Airbnb to Hamburg 35 . In October 2011, the company installs a second international office in London 36 . In early 2012, Airbnb opened 6 new offices in the world, in Paris , Milan , Barcelona , Copenhagen , Moscow and São Paulo 37 . The company announced in September 2013 that its European headquarters would be located in Dublin .
In early November 2012, Brian Chesky announced that the company will focus on Australia, the second largest market behind the United States. To support this effort, the company opened an eleventh office in Sydney 38 . The Australian consumer represents one-tenth of the Airbnb user base 39 . A few weeks after announcing this installation in Australia , Airbnb turns to the Asian market and opens a new headquarters in Singapore . The goal of the company is to acquire an additional 2 million properties within the continent and attract more Chinese travelers. They are the most expensive travelers in the world, but Airbnb focuses on Chinese people travelingChina because the country uses its own social networks and online payment systems 40 , 41 . The company further expands in April 2015 and opened an office in Cuba 42 .
Regulations
In Germany
In January 2014, the German Federal Court ruled that the renting of his residence to tourists is not covered by a sublease agreement and that the tenant does not have the authorization to sublet its accommodation on platforms of type Airbnb, Wimdu or 9flats without the agreement of its owner, who then takes all the risks. This decision comes in the context of a case between a landlord and his tenant who sublet without authorization his housing for over a year to a total of 52 tourists. In the learner, the owner terminates the lease without notice for abuse and then files a complaint 43 .
The city of Berlin imposes on lenders to obtain permission to give their entire housing for rent from 1 st May 2016. The rule does not affect the fact to provide a room in the dwelling occupied by the lessor. Offenders are liable to a fine of up to EUR 100 000 44 .
In Spain
In 2015, the Parliament of Catalonia imposed the payment of a tax of 65 eurocents per night per person in Barcelona , 45 centimes out of the city. It is forbidden to lease an entire housing: maximum two rooms can be rented in the presence of the owner, within four months of the year 45 .
In the United States
Until 2014, renting short-term housing through an Internet platform like Airbnb is banned in the company’s hometown, San Francisco . Several rental companies are fined and some tenants who sublet their homes without informing their owners are summarily dismissed 46 . The situation changes in October 2014 when the mayor of the city has passed a law legalizing the short term rental under certain conditions: the renters must register as such in the registers of the city and pay 14% of the tax of stay that hoteliers also pay 47. According to a study commissioned by Airbnb, between 2011 and 2012, the shortfall Airbnb rentals for the city is $ 1.9 million 48 .
In New York , while a law dating from 2011 prohibits the rental of residential units for a period of less than 30 days 49 , 50 , 51 , a judge of the city condemns in May 2013 an Airbnb user, Nick Warren to $ 2 400 fine for having rented his apartment on the Internet platform for less than 30 days 52 . In April 2015, Airbnb company made a request to the city to lift short term rentals of illegality in exchange for payment of a kind of tourist tax that does not pay until 53 , 54 .
Since September 10, 2015, residents of Charlottesville , Virginia who wish to rent their home on Airbnb must first obtain a business license 55 .
In France
The law prohibits in France to rent or sublet a living space whose area does not exceed 9 meters square, or 20 meters cubic 56 .
In August 2015 , the platform announced that from October 2015, it collects itself the tourist tax on behalf of its guests in Paris 57 . The same year, Airbnb starts collecting a tax of 75 cents per person per night in Chamonix on behalf of the Town Hall 58 .
In January 2016 , more than 50,000 homes are online on platform 59 .
The same month, the National Assembly amends the bill to a digital Republic with Amendment n o 376, adding an article 23 bis and ter making punishable by imprisonment, heavy fines and even to expulsion from its seat anyone renting his property on a platform such as Airbnb without the written authorization of his owner 60 . The amendment is defended by MP PS Sandrine Mazetier 61 .
A tax statement of August 30, 2016 clarified the position of the administration concerning the revenues generated from the rental business 62 , 63
In 2017, Paris remains the first Airbnb city in the world. In 2016, France remains the second most popular destination for users. 64
Since the 1st of December, advertisements for tourist furnished must have a registration number which must be published on the advertisement. The latter serves to verify that the hirers do not exceed a period of 120 days per year. 65
Sublease Issues
In France, the rise of Internet-based rental accommodation platforms such as Airbnb is intensifying the phenomenon of subletting 66 , 67 . Some practices, however, are illegal. It is illegal for any tenant who signed a lease for unfurnished housing before March 27, 2014, according to the law of July 6, 1989 tending to improve the rental relationships, to sublet his housing without the prior consent of his owner, who must also validate the price of the sublet 68 . If the lease was signed after March 27, 2014, the price of the sublease square meter can not exceed that of leasing 56 .
More generally, when a tenant sublets its housing, furnished or not, in case of disputes, it is the owner who is held responsible in the eyes of the law 56 . In addition, the renters’ insurance does not cover damage incurred during a sublet 56 . For HLMs, it is possible to sublet a part of its housing with a special exemption, this thanks to the Boutin law of 25 March 2009 69 .
On February 13, 2014, the Paris District Court convicted for the first time a tenant who had subleased one of his rooms via the website. The tenant was ordered to pay 2,000 euros in damages to its owner 70 .
Seasonal Rental Issues
An owner is in principle free to rent his home on Airbnb for a short time. However, when this rental lasts less than 90 days and corresponds to a tourist period that varies by city, it can be considered as a seasonal rental governed by several criteria:
- If the rented accommodation is a city second home, the rental is then considered as a commercial use of housing and the owner must register a change of use at its town hall (when the city exceeds 200 000 inhabitants) 56 .
- Is considered as guest room, any part of a main housing rented by its owner. It can not then rent to more than 15 people and must be limited to the rental of 5 rooms 56 .
The mayor of Paris criticizes the financial speculation caused by the rental platforms by decreasing the living space in the capital. In Paris, protection services for residential premises fight against second homes illegally transformed into tourist furnished rentals. In 2013, 420 homes were checked 66 .
Some co-ownership regulations contain an exclusive bourgeois dwelling clause and, in this case, the building is only intended for housing and excludes any professional or commercial activity (the seasonal furnished rental is considered a commercial activity) 71 .
The co-owners bothered by such use of housing can refer to building regulations to justify their opposition to improper use destination of the building 71 .
Lobbying activity at the National Assembly
The AirBnb France group is registered as an interest representative with the National Assembly . He states in this respect that the annual costs of direct activities of interest representation in Parliament are between 50 000 and 100 000 Euros 72 .
In Quebec
On April 29, 2015, the Quebec Minister of Tourism, Dominique Vien, declares that regulations will be tightened concerning the rental through housing brokers like Airbnb. It plans to balance the tourist accommodation market by subjecting Airbnb renters to the same legislation as hoteliers 73 .
Financial model
Location and income
The founding team of Airbnb is the management of the company: Brian Chesky as co-founder and CEO, Joe Gebbia as co-founder and product manager and Nathan Blecharczyk as co-founder and Technical Director 74 . The company has offices in 12 cities: Barcelona (Spain), Berlin (Germany), Copenhagen (Denmark), Dublin (Ireland), London (United Kingdom), Paris (France), Moscow (Russia), San Francisco ( United States), São Paulo (Brazil), Singapore and Sydney (Australia) 75 .
The first Airbnb source of income comes from fees for booking 76 . Rates vary between 6% and 12% depending on the price of the reservation. Airbnb also charges the host 3% for credit card processing 77 .
Growth
In February 2011, Airbnb announced its one millionth reservation since its creation in August 2008 78 . A year later, in January 2012, the company recorded 5 million reservations. This number doubles in 5 months with 10 million bookings in June 2012 79 . Three-quarters of these bookings are made outside of the United States. As of December 2013, the company represents 15 million users and approximately 250,000 properties 80 .
Mergers and Acquisitions
Since 2011, Airbnb has acquired several of its competitors, the first being Accoleo Hamburg-based 81 . With the approach of summer 2012 Olympic Games in London, the company buys a competitor established in the English capital, CrashPadder, and thus adds additional 6000 international listings to its existing inventory 82 . This acquisition makes Airbnb the UK’s largest peer-to-peer tourist accommodation site 83 .
Airbnb NabeWise bought in November 2012. 84 , a tourist guide, and extending its offering for local recommendations of travelers 85 . In December 2012, the company announced the acquisition of Localmind 86 , a platform for questions / answers which allows users to post questions about specific places, experts from the areas referred responding in real time 87 .
Controversies
Using spam
In June 2011, blogger Dave Gooden revealed that the company allegedly mass-mailed automated emails to owners using the Craigslist classifieds website , which would have allowed the company to experience such rapid growth. 88 .
Incidents and safety of tenants and owners
In July 2011, a host, under the pseudonym EJ, sends a report to Airbnb because his apartment was robbed and vandalized by the tenant he found through the website 89 , 90 . After 14 hours without answer, the company tells him that she will not pay the damages 89 , 91 , 92 , 76 . Given the somewhat negative reaction of the general public, Airbnb announces reverse 89 . EJ assures that the company encouraged him to withdraw his complaint, pointing out to him the “potential negative impact” it could have on the image of the company, before cutting off contact 89 , 92 , 76.
After this incident, several hosts shared similar experiences. Among them, a man whose house had been rented by Airbnb to an addict who stole his host’s birth certificate and caused thousands of dollars worth of damage 76 , 93 . The host expressed the same discontent concerning EJ reacting Airbnb face incident 93 , 94 .
In March 2014, a new incident hit the headlines. While Ari Teman rents his apartment through Airbnb, his tenant organizes in his apartment a sexual orgy. Ari Teman then declares more than $ 87,000 in damages (the amount will later be reduced to $ 23,817 ) and finds himself on the street, his neighbors having requested his removal from residence 95 , 96 , 97 , 98 . Since the incident in New York, a number of cooperatives scan the Airbnb site looking for apartments in their buildings listed as being for rent to denounce them to the authorities 99 .
In July 2014, in California, a customer refused to leave the apartment he had rented to an Airbnb host for a month. However, California law provides that once someone has rented an apartment for at least one month, that person is considered to be the tenant of a lease from month to month. Therefore, the host had to hire a lawyer and launch a legal eviction process 100 .
In April 2015, a co-owner discovered that her roommates rented her home on Airbnb while she was traveling. Airbnb has stated that it can not verify the complaint and has refused to delete account 101 . After the media seized of the matter, the company falsely claimed to have removed the account in question even though it was still active 102 . That same month, a Calgary couple rented his house on Airbnb for a weekend to a young man who organized a 48-hour party there, causing excessive damage to over 100 people in the house. The damage was estimated at more than $ 50 000 103 .
On July 20, 2016, Airbnb has recruited the former Minister of Justice Eric Holder will help it fight against discrimination between users of its platform 104 .
Use by housing professionals
The platform is defined as a link between two individuals allowing a landlord and a tenant to conclude the rental of a home. However, the success of Airbnb has attracted other types of renters who seem not to be private individuals seeking additional income. According to the website “Inside Airbnb”, which has listed accommodation available on Airbnb in several major cities around the world, 20% of Paris housing is held by hosts managing several ads. The site has found that among these hosts, some are owners of dozens of homes on Airbnb 105 .
Housing crisis
In several metropolises around the world, Airbnb is accused of being responsible for a housing shortage. Seasonal rentals on Airbnb are more profitable 106 than long-term rentals, more and more apartments would be removed from the rental park for the benefit of the tourist park.
In 2016, the city of Berlin has 16,000 Airbnb homes out of 24,000 reserved for tourists. The German capital then decreed the platform outlaw in the name of the “fight against speculation and rising rents” whose platform is originally 107 .
In 2017, the mayor of Paris denounces the loss of 20,000 homes in the capital 108 . The city council of Bordeaux says, meanwhile, to count more than 5,000 dwellings reserved for rent on Airbnb 109 .
International Campaign on Israel
Airbnb is on the list of companies covered by the international campaign ” Boycott, Divestment and Sanctions (BDS) ” on Israel 110 . BDS application to Airbnb to stop offering on its site rental of housing units in Israeli settlements in the West Bank, illegal under international law 111 .
Taxation
In France, where its turnover is estimated at 60 million euros, Airbnb would have paid only 69 168 euros in taxes in 2015 thanks to its tax optimization practice 112 , 113 , 114 . For this, Airbnb would bill its customers in Ireland and the United Kingdom, while the French branch would only be responsible for marketing, thus posting a revenue offset by the profits generated by rental housing in France. According to a note from the law firm Gide Loyrette Nouel, commissions on French rentals would have reported to Airbnb between 60 and 160 million euros in 2015. This is for the company’s second market after the United States 115 ,
Opposition to the policy of Donald Trump
Airbnb and its director Brian Chesky openly oppose Donald Trump’s anti-immigration policy and ” Muslim ban ” . On the occasion of the Superbowl in February 2017, Airbnb airs an advertisement advocating tolerance between peoples and religions by launching the keyword “#weaccept”.
The company also agrees to repay over 4 years, an amount of 4 million to the International Rescue Committee , an NGO that helps refugees 117 .
Competition
Many private rental sites have been created since the creation of Airbnb in 2008. At the European level, the main competitors are Wimdu, a Berlin-based company created in 2011 and Housetrip . In France, 5 sites share the rest of the market: Cybevasion, Sejourning, MorningCroissant, Bedycasa and KooKooning 118 , Opitrip and Likibu allows to compare offers with other actors in short-term rental.