By Brook Furniture Rental – http://www.bfr.com
Revenue-sharing model would allow apartment dwellers to market rooms through lodging website.
Three of the nation’s largest landlords have held discussions with Airbnb Inc. about allowing apartment dwellers to market rooms through the company’s global network in exchange for a slice of the revenue, according to a report in the Wall Street Journal.
Equity Residential, AvalonBay Communities Inc. and Camden Property Trust have had discussions with Airbnb in recent weeks about joining forces, executives at each of the companies said. They all said they are interested in pursuing a revenue-sharing model with Airbnb but would need to work out the details.
Anthony Anton, CEO of the Washington Lodging Association, on Friday told the Puget Sound Business Journal that Airbnb would not be a threat to the association’s 500 members – if Airbnb had to play by the same rules as hotels. In some jurisdictions, Airbnb does not pay lodging taxes and is not affected by health and safety standards.
Executives at the three apartment companies said they plan to examine local laws carefully to ensure they don’t run afoul of them. Mr. Santee, of Equity Residential, said they wouldn’t let units be converted into full-time hotel rooms.
Airbnb officials have said in the past that the vast majority of its users are renting out their apartments only occasionally on the site, helping them afford rapidly rising rents in those cities.
Airbnb has about 322,500 accommodations in the U.S.up 80% from a year earlier, according to the company. It generated $340 million of revenue in the third quarter, on bookings of $2.2 billion, according to an investor presentation earlier this year reviewed by The Wall Street Journal.
Home dwellers who use Airbnb’s website to list rooms or entire homes for rent pay Airbnb a percentage of the nightly rate. But most apartment leases have restrictions that forbid tenants to sublet or to do so without permission. That has made many of the apartment dwellers who advertise their units on Airbnb’s website subject to possible eviction, a hurdle to Airbnb’s growth thus far.
But landlords could stand to benefit from a hookup with Airbnb. They could impose a fee to tenants for allowing them to rent out their units, apartment executives and analysts said.
Landlords also could find it easier to pass along rent increases. If tenants can get $300 a night renting their room from time to time, it is easier for landlords to keep pushing steep rent increases, the apartment executives and analysts said.
Airbnb for the first time in November publicly revealed the details of how it plans to make its home-sharing business available to multifamily housing owners. Speaking at the NMHC OpTech Conference in November, Airbnb’s Vice President of Landlord Relationships JaJa Jackson says the flexible plan that is still being formalized would potentially include a 10 percent to 15 percent revenue share for apartment owners and would emphasize greater transparency for owners, hosts (those residents who home-share) and guests (those who use Airbnb to book short-term stays).
The news was met by industry professionals in attendance with a mixture of anger, skepticism and enthusiasm regarding the program’s potential, according to the National Apartment Association.
For many in the apartment industry, the short-term rental industry represents a number of threats. First and foremost, apartment owners and managers have legal concerns, as most leases have been written such that short-term rentals are prohibited. They also have security concerns because they often lack information about which residents are renting out their units and to whom. There is fear over the extra wear and tear on the facilities, as well as potential damages to units and common areas. Liability is also an issue, as apartment firms do not want to be responsible for anything from the banal like a guest slipping and falling to the extreme like a guest assaulting another resident.
Because “we respect ownership,” Jackson said Airbnb was in the process of developing tools that can help the apartment industry manage what he called “home sharing activity” by providing more transparency and control, as well as a share of the revenue generated by the units in their buildings. The multifamily-specific program is set to roll out in 2016.
If multifamily investors go along, the strategy could eliminate a major obstacle for Airbnb, which needs a large supply of apartments to sustain its rapid growth.
While Airbnb has primarily served budget-minded tourists, it has been attracting a larger share of business travelers. This is due in part to cost – companies can save money on conferences, meetings and retreats. But the attractiveness of staying in someone else’s home goes beyond the travel expense report. These properties allow travelers to trade in the cookie-cutter hotel experience for one that offers colleagues a unique and comfortable space in which to connect and collaborate.
Most certainly if one had to choose between a hotel room for a beautifully furnished apartment or home with a full set of amenities it is not difficult to understand Airbnb’s success.
But just placing your rental space on Airbnb’s hosted marketplace does not guarantee success. Searching for a rental unit is not that much different than searching for a new home or apartment. Visitors are attracted by quality photographs that highlight the property’s atmosphere, amenities and decor. Airbnb’s hospitality guide is a great place to start when considering to rent your home or apartment.
One of the most important features for any rental is the furnishings. In order to achieve great reviews and hopefully a five start rating for your rental, you should consider the condition of your current furniture and decor.
Buying new furniture is probably not a financially sound move for a rental unit even on an occasional basis. One of the easiest ways to create a fabulous space that will appeal to your potential clientele and insure repeat business, is to rent furniture. Rental collections offer a variety of styles to suit any space and you can easily and quickly furnish your complete unit or choose only the pieces that make sense. Plus rental furniture is also considered to be an operating expense vs a capital expenditure, if you’re really serious about renting multiple spaces you control this accounting feature may be beneficial to your situation. Please check with your accountant to learn how this might impact your situation.
From home staging to model suites and temporary situations, Brook Furniture Rental has been providing high quality, stylish furniture for over 35 years. If you are considering joining Airbnb, then consider Brook for your furniture and decor needs.
Need inspiration? Check out some of Brook’s model suites on our social network or click here to view our eBrochure.
Need advice? We are here to help. Contact us at 877.285.7368