Airbnb, originally called AirBed and Breakfast, is an online marketplace that offers lodging and connects travelers with local hosts. The platform enables people to list their available space and earn extra rental income. It allows travelers lease or rent short term lodging including vacation rentals, apartment rentals, homestays, hotel beds and hotel rooms.
The founders of Airbnb started hosting guests on air mattresses in their living room in San Francisco, California, USA on August 1, 2008 because they were trying to earn extra cash to pay their rent. The vision however grew after they launched the company. They decided to focus on creating value around experiences as seen through a local’s perspective. This prompted the putting together of a website which offered short term living quarters, breakfast and a unique business networking opportunity for people who are unable to book a hotel in a congested market. It also gives guests the homely ambience as against staying in a hotel room when they visit a city or town.
Airbnb is currently present in over 34,000 cities and over 190 countries across the world. Over 140,000 people stay at Airbnb listed location every day and Nigeria is recorded to have the fastest growth for Airbnb in Africa because numbers of annual guests doubled in the past year from 572,000 to 1.2 Million. One can conclude that the Airbnb platform offers many advantages to a host (a person who owns property and wants to rent out space for money on short let) and a Guest (a person who books listed properties from local hosts) as a guest can save money and also get an opportunity to interact with local hosts. A host also gets insurance on property listed and ratings or review on properties which will facilitate future patronage. Airbnb offers free listings to property owners and lets guests browse the listed spaces and select whichever best suits their need on the platform. All bookings and monetary transactions are carried out on the platform and the company earns its revenue via commission gotten from hosts upon every booking done through the platform and a latter charge of the booking amount as transaction charges from guests upon every confirmed booking.
In Nigeria, Airbnb is the Uber of houses. The same way people use their cars to sign up on Uber or Taxify is the same way people rent their houses for a short term using Airbnb. Airbnb aggregates spare rooms for those that need rooms when they are out of town. This has made it possible for an individual to have a home away from home experience and still save on accommodation when they travel. There is a large market of international guests who use Airbnb and focusing on them will yield better and positive results than focusing on domestic clients. As a host, one simply needs to provide a secure location and maintain good reviews and ratings to win the trust of new guests. Airbnb currently thrives in limited places in Nigeria like Lekki, Victoria Island, Ibadan, Abuja, Magodo, Ikoyi and I suppose this is because this business like every other business has its Cons. Also considering the fact that it is relatively novel in Nigeria, a lot of people and business entities are not well informed about the business. Some of the challenges associated with listing a property on Airbnb for short let includes:
a. Lack of Trust. The rate of corruption and fraud in Nigeria makes a lot of potential guests doubt properties advertised online. They will rather lodge at a well-known hotel than get defrauded
b. Low brand awareness
c. Exorbitant Pricing. Listings are in dollars and this discourages an average Nigerian considering the devaluation of Naira. Hence Airbnb is termed as an enterprise for the rich only
d. Fear. Most people are afraid to put their details and credit card information online even though they might like the facilities and amenities a short let will provide.
e. Security. The police in Nigeria is seen as inefficient and hence security is a big issue. Tourists and even citizen are generally discouraged to rent a short let to avoid being victims of crime. This goes both ways. A host might also be bothered about the identity of a guest in their property and they sometimes hold back on listing their properties.
The benefits of the Airbnb business are also very apparent considering the short time and limited places of its use in Nigeria. It carries large potential economic benefits and costs to hosts and also provide increased supply of travel accommodation which could benefit travelers and make travel more affordable. This could also encourage tourism and grow the country’s GDP when people are assured of a safe environment and quality service.
The average cost of a short let apartment in Nigeria is $200 per night depending on if a guest is renting the whole apartment or a part of it. It is this writer’s opinion that if short let apartments could be more affordable and if provisions could be made for awareness or publicity and Security, the Airbnb business will thrive and bring great benefits to individuals and the government.
