Written by Špela Koželj
Are you one of those people who likes having their vacation organized by a third party? Do you like to save some of your valuable time and leave the preparation of your trip to an established tourist agency? Well, then your travel life hasn’t changed much since the emergence of Airbnb.
However, if you are like me, a freelance traveler who likes to save some money and prefers to organize sightseeing and other activities on her own, then you might agree with me – agree that since 2008, the year when Airbnb was introduced to the housing and vacation rental market, travel culture has changed.
Why? Let’s go a few steps back first.
Airbnb is an American company that hosts an online marketplace and hospitality service for people to lease or rent short-term lodging, including vacation rentals, apartment rentals, and homestays. The company does not own the properties; it is only a broker that receives percentage service fees from both guests and hosts in conjunction with every booking. In January 2018, the company had over 3,000,000 lodging listings in 65,000 cities across 191 countries.
However, Airbnb has always been more than just an online portal connecting hosts with guests and more than just a trip-organizing intermediary. If you compare it to its competitors, such as Booking.com or Hotels.com, Airbnb offers more than just accommodation. It also offers experience: the experience of meeting the local people and interacting with the culture and their way of life. If you only check out their motto, “Don’t go there. Live there,” you can understand what I mean.
Not long ago, Airbnb also extended their offerings, which are no longer limited to home rentals but also include booking experiences such as concerts, events, cooking classes, surfing lessons, parties, discovering hidden spots, and all sorts of other day and night activities.
Moreover, with the emergence of Airbnb, the means of accommodation has changed as well. Before 2008, most people stayed in hotels, some backpackers preferred hostels, and in some parts of the world, it was popular to rent an apartment through local people you would meet at the spot and then just keep on going there every summer.
Then, Airbnb connected one’s dreams of a perfect vacation with reality. Private beach villas, cottages in the woods, jungle bungalows, northern igloos, safari observation cabins, and tree houses were introduced to the market, all of them skimming quite high profits. An overnight stay in a simple but cute tree house in a remote forest of South America would cost you almost as much as staying in some of the world’s best hotels. Crazy, right? How the tables have turned. The reason is 2018’s mentality and the capitalism of the new world. It’s not that much about the money and materialism anymore, but more about the experience and unforgettable memories. And that is exactly what this tree house offers. The demand for it is high, at least in the nomadic travel culture, and the supply is not that large. It is a unique experience for which one will have to pay quite some money, but the memory will stay forever.
All this sounds great, right? The guest is happy, and the owner is even happier since he is earning quite a bit of money. Seems like a good, advantageous business. However, it is not that perfect once you look at the wider picture.
Airbnb provides great profits for hosts and for the organization itself, but what about the country where this economic exchange is being made? The country does not benefit from it! It is quite bizarre how this online portal has become one of the most flourishing businesses in the last ten years, and the regulations regarding taxes have not changed at all. An Airbnb owner does not pay any taxes to the country where he performs business. The company has been criticized for avoiding taxes by setting up a double Irish arrangement through subsidiaries in Ireland and Jersey. In 2016, the Spanish treasury department sent letters to property owners that have not declared income associated with Airbnb. In Australia, insiders said in 2016 that the hosts of the 75,000 properties listed on Airbnb would likely face increased chances of being audited.
Moreover, a lot of people have quit their jobs because they can have a very comfortable lifestyle by owning a couple of residences around the world. They employ locals to maintain the property and give them regular payment (at least, I hope so). I believe most of them are fair to their local employees; however, there must be some exceptions. Being informally employed by an Airbnb owner gives a worker no job security, no healthcare or social care, no incentives, and no room for career development. How about annual salary raises and the option of maternity leave? Or what about safe working conditions? Those workers are paid way less than they could be, regarding the Airbnb owner’s profits. The working conditions are usually not too bad, but in some instances, it could be compared to third-world-country labor, such as contracting in China, for example.
Nevertheless, the story is never black and white. From one point of view, those Airbnb owners are doing a good thing since they provide jobs for people who may otherwise be unemployed. The owner usually takes good care of them and makes them happier than they would be working for another local employer. It is just about the “what if” situations. If the cleaning lady gets pregnant, will the owner use proper procedures for the situation? Will she get a salary while on leave? If something happens, who will cover the employee’s healthcare? The Airbnb owner? Let’s hope so, but as things stand now, there can be no guarantee.
As I have written above, it is never black and white. In my opinion, and based on my Airbnb experience, this has been one of the greatest inventions in the travel industry: so much fun and a super-easy system. However, based on the market share it takes in the vacation rentals market, the Airbnb organization needs to establish some rules and regulations regarding taxation and job safety soon.
Špela is a 22-year-old student of International Business from Slovenia. She is completing her double degree program in Gwangju. Besides studying, she likes to take part in all sorts of activities, such as dog shelter volunteering, writing, traveling around Asia, and working on different marketing projects. She is very pleased to be a part of Gwangju News!