Home alone
A report this week, stressing on how home-sharing company, Airbnb, is struggling with bookings due to new short-stay rules introduced in New York City, United States of America, has forced me to consider some pros and cons with that decision.
Advertisement
According to the report, short-term renters (shorter than 30 days) in New York City will need to register with the City authorities before making a booking on Airbnb. Significantly, also, short-term renters are expected to be present in the home for the duration of the rental.
Yeah, it certainly affects you if you are planning to visit New York City any time soon and intend staying in an Airbnb approved home.
Airbnb has and is still fighting the rules, arguing that the restrictions would rather hurt visitors looking for affordable homes.
According to another report, Airbnb’s Global Policy Director, Theo Yedinsky, is of the view that the rule change was a blow to “the thousands of New Yorkers and small businesses in the outer boroughs who rely on home sharing and tourism dollars to help make ends meet.
But advocacy groups think otherwise. They believe that in New York City, “residential apartments should be for residential use”.
In all of this, what l have found most disturbing about commentaries on the restriction is a quote attributed to one Murray Cox of Inside Airbnb.
And this is the quote: “The city is sending a clear message to millions of potential visitors who will now have fewer accommodation options when they visit New York City: ‘You are not welcome.’”
Inside Airbnb is described as a housing advocacy group that collects data about Airbnb’s presence in cities around the world.
According to the UK-based Guardian’s online report, officials and housing advocates who had pushed for the restrictions are of the view that it was necessary to stop apartments from becoming de facto hotels.
Certainly, the impact of the restrictions would be huge, not only on the fortunes of Airbnb in New York City but also on would-be travellers to New York City and residents who rent out their homes.
Platforms such as Airbnb, VRBO and others are not allowed to process rentals for unregistered hosts.
For instance, available data claims that out of the more than 3,800 applications sent and received by the New York City authorities, only about 300 applications had been approved.
This means that the more than 3,800 active non-hotel listings by Airbnb for New York City would suffer the knock-on effect from the restrictions. A serious unintended consequence?
In fact, even though the regulations were approved in January last year, it was held up due to legal action and only came into effect in August this year when that hurdle was cleared.
So, without an approved registration number you will not be able to book through Airbnb and visit The Big Apple in New York City, and even if you are in the position to go after securing approval, you cannot go with the family because under the new restrictions two guests at a time are not allowed.
You will be home alone! The more flexible option is the hotel route.
I have always admired the business model of Airbnb, therefore, should the stringent restrictions introduced in New York City become replicated in other jurisdictions too, it could badly damage the franchise value of the company.
As I explained in the May 18, 2019 edition of this column, Airbnb, and others such as Amazon, EBay and Alibaba have brought some vibrancy, literally, into the conduct of global business.
All the companies mentioned above are running multimillion revenue streams without necessarily having to hold stock.
Significantly, the digital age is transforming lives by making it possible for new products and services to be accessed without extensively altering user behaviour.
I have had the opportunity of listening to a number of financial planning experts, and one line that runs through all their themes is the need for multiple streams of income so that there is a balance in your portfolio of assets.
And one area that comes up most, as a low hanging fruit, is the home-sharing concept.
Homeowners are encouraged to consider renting out their homes to tourists (visitors) on a short-term basis to generate that additional income that would beef up the pot.
In fact, there are testimonies from many on how renting out a room under the Airbnb scheme has helped in balancing the finances at home.
For this reason, I am particularly concerned about the lost income to the homeowners in New York, who may literally be forced to be home alone at the short-term end of the market, because of the restrictions.
One appealing part of the Airbnb concept is its short-term nature.
A client or homeowner may not have to put up with a toxic guest (on both sides) for a long time because of the short-term nature of most relationships.
You can quietly wait for the days to go by and get your sanity back! I believe this is one of the main reasons why Airbnb has been so popular.
Well, this is a New York City issue, as there are still opportunities with Airbnb here that you can explore too.
The business landscape has changed for good, and aside the business model of Airbnb, the internet ecosystem has helped with the removal of barriers to entry in many industries.
About three decades ago, only companies with high street presence had the best goodwill and could do business directly with clients.
In the typical hotel business-sense, for example, you must own the hotel before you can book clients or be acting as an agent for a typical hotel.
That’s how the hospitality industry worked.
But with the Airbnb model, every decent building can offer hotel services—and more.
No wonder some residents in New York City are up in arms against the success of Airbnb!
I don’t think they would have bothered much if the company was a flop or failing.
By and large, analogue methods can never be useful in a digital age. At best, the analogue methods can provide useful lessons to shape the future.
And so we have turned our backs on the past and moving forward.
Just make sure that when you intend travelling to New York City and want to enjoy some savings with Airbnb, you make your booking early; register in good time with the New York City authorities so that you can have the approval to book your accommodation on Airbnb to enjoy some good savings.
Otherwise, the hotel becomes the most flexible option.
Every little saving helps so always do some bargain-hunting!
