Unlicensed residences represent a growing change in the hospitality industry. Hotels should now face a new competitor in the form of anyone with a spare room and access to websites like AirBnB. However, consumers should also understand how the two services now differ as much as expectations, regulations and more.
For those who are not familiar with it, new websites allow real estate owners – or sometimes simply lax owners – to list their spare room for housing. There are some expectations, but they are largely negotiated between the owner and the operator, as websites simply serve as an intermediary for money exchange and advertising.
Initially, these startups accounted for less than a fraction of the housing industry’s revenue, necessitating more than just an inactive eye from the hotel industry. Last year, however, these services exploded – AirBnB, for example, has now coordinated more than 10 million accommodations since its foundation.
It is important for smart consumers and anxious executives alike to understand the underlying differences between traditional housing and these new services.
First, hotels are a regulated industry. In addition to star rating, city, state, and federal laws define minimum guidelines for hygiene and safety. This provides travelers with a degree of certainty when booking accommodation. BnB websites claim to mitigate these concerns through a review and return process; however, such an process is interactive, leaving stranded travelers stranded in a bad rental situation. It is the responsibility of the consumer to examine any new or uncertain rents.
Cities around the world are moving to address the regulatory issues of these rents under the radar. Many cities already have requirements for buildings operating as BnB to license, but many avoid this requirement. As a result, tax revenue is lost and minimum standards, such as accessibility for the disabled, are avoided. The use of profiles, which are praised as a way to communicate with society, differs from the traditional housing community, and is required to provide housing based on ability to pay only. The process by which an AirBnB renter can choose who stays the rules on images and personal information opens the door to discrimination.
But the concern to legalize these alternative services lies in consumer demand for an alternative way to stay while traveling. While hotels offer a great job for business and short-term travelers, they may not be appropriate for the subject and long-term stays. Alternative residences often include apartment-like amenities geared towards longer stays and lower prices – services that only a few companies can afford to keep in bulk. BNB rentals online can often be wonderful topics. One example is the "forest house" on the Caribbean side of Costa Rica. Although many resorts can be "of a certain nature", these themes are often limited to common areas and decoration in the room.
Since two industries play their power, it is the consumer who will win. Hotels are likely to save costs by not having to meet long-term rental requirements, while online rental services will slowly develop the necessary legitimacy to ensure minimal service.