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As Airbnb joins the stock market, TOM LEONARD asks is it wrecking cities? 

Brilliant but impoverished, many internet visionaries were camping out in a friend’s spare room when they had their great brainwave. In the case of Brian Chesky and Joe Gebbia, billionaire founders of Airbnb, that was the great brainwave.

The two former school friends had just moved to San Francisco in 2007 when, unable to pay their monthly bills and aware local hotels were all full because of a technology conference, they put three inflatable mattresses in their living room and rented them out online. They called their website Airbed & Breakfast.

In the event, they’ve been able to do a lot more than just pay their rent. Allowing ‘hosts’ to let spare rooms (or homes) to travellers at a knockdown price because they avoided many of a hotel’s built-in costs is a fairly basic idea — as they so often are in Silicon Valley.

Feet up in floating paradise: Bird Island, Stann Creek Dist, Belize (£520 per night): Imagine holidaying on a private island. Snorkel in your own patch of paradise, try a spot of fishing or soak up the sun in wonderful seclusion. Situated on one of the most beautiful coral atolls in Belize, this private floating home, complete with its own security force (on an island nearby), can sleep eight guests.

However, it’s one that, when repeated many millions of times by would-be renters and spare-room owners across the world, has been transformed into a multi-billion-pound business.

Airbnb has listings in 110,000 towns and cities in 191 countries, owning virtually none of the properties but taking a cut from each rental.

Thirteen years after that cramped night in the founders’ apartment, Airbnb will today list its shares on the stock market with an initial public offering set to value the company at up to £31.7billion.

A condor’s view… of Peru: Skylodge Adventure Suites, Urubamba, Peru (£225 per night): Make like a condor of the Andes and tower above the Sacred Valley in this transparent luxury hanging capsule. Hike your way up to it then take a zipline back down to earth — but not before enjoying your four-course gourmet dinner with wine (included in the price).

A condor’s view… of Peru: Skylodge Adventure Suites, Urubamba, Peru (£225 per night): Make like a condor of the Andes and tower above the Sacred Valley in this transparent luxury hanging capsule. Hike your way up to it then take a zipline back down to earth — but not before enjoying your four-course gourmet dinner with wine (included in the price).

Northern Lights from an Igloo: Igloo, Pelkosenniemi, Finland (£100 per night): This romantic fur-lined Lapland igloo, made from ice bricks, is perfectly positioned for you to glimpse the Northern Lights by night, and visit the nearby reindeer farm during the day. (Warm apartment available in case of cold feet.)

Northern Lights from an Igloo: Igloo, Pelkosenniemi, Finland (£100 per night): This romantic fur-lined Lapland igloo, made from ice bricks, is perfectly positioned for you to glimpse the Northern Lights by night, and visit the nearby reindeer farm during the day. (Warm apartment available in case of cold feet.)

Its success no doubt ensures sweet dreams for its investors, who include Hollywood star Ashton Kutcher, but it has proved a nightmare for others, particularly the hotel industry and, all too often, neighbours of Airbnb properties. As well as complaints from people who have suddenly found themselves living next to call girls, drug dealers or party animals, Airbnb has been accused of driving up prices for people who simply want to rent a home. As with the likes of online retail giant Amazon and taxi service Uber, customers are lured by price and convenience at the cost of knowing they are helping to hollow out an established industry that cannot compete with the internet interlopers.

However, while the pandemic has been great for many internet giants’ bottom lines, it was terrible for Airbnb, because the few people who had to travel thought twice about the health risks of renting a room in a stranger’s home.

Experts see the Airbnb share issue as a key test of the health of the travel industry — will the arrival of vaccines see a rapid return to old habits and high demand for room rentals, or has the coronavirus instilled a reluctance to put one’s health at the mercy of a ‘host’ who may not have bothered to clean the bathroom properly in between guests?

Bali’s walkway to heaven: Sharma Springs Bamboo Mansion, Abiansemal, Bali (£638 per night): This luxurious five-storey bamboo mansion is nestled among treetops and sits alongside the sacred Ayung River. You enter through a suspended walkway and there are five bedrooms, a private pool and the option of an in-house chef

Bali’s walkway to heaven: Sharma Springs Bamboo Mansion, Abiansemal, Bali (£638 per night): This luxurious five-storey bamboo mansion is nestled among treetops and sits alongside the sacred Ayung River. You enter through a suspended walkway and there are five bedrooms, a private pool and the option of an in-house chef

Suddenly a costlier hotel room may seem a much safer bet.

Airbnb’s founders, who have previously refused to share control of their business, are taking a risk. But, then, they’ve weathered uncertain times before.

Growth was initially slow, as was outside enthusiasm in the project. In 2008, the company’s founders resorted to making boxes of novelty cereal, one to celebrate Democrat presidential contender Barack Obama (‘Hope in every bowl’ was the marketing slogan) and the other a homage to his Republican rival John McCain.

Airbnb co-founder Brian Chesky called the breakfast sideline the company’s ‘low point’, but it ended up saving the day. Not only did the cereal generate £19,000 in badly needed income, when Chesky produced one at a meeting with a venture capitalist from whom they were seeking funding he was impressed. ‘You guys won’t die, you’re like cockroaches,’ he said, rescuing them from bankruptcy.

Even as the company expanded to 15 staff in 2010, they continued to work from the founders’ flat, forcing Chesky to give up his bedroom and spend three years using Airbnb to find a bed each night.

Branch out in a tree-mendous treehouse: Private treehouse, Elham, England (£99 per night): Perch 20ft up between three sturdy oak trees in this traditional treehouse made entirely of recycled timbers. With uninterrupted views across Kent’s North Downs, this cosy cabin is the perfect romantic getaway

Branch out in a tree-mendous treehouse: Private treehouse, Elham, England (£99 per night): Perch 20ft up between three sturdy oak trees in this traditional treehouse made entirely of recycled timbers. With uninterrupted views across Kent’s North Downs, this cosy cabin is the perfect romantic getaway

The next few years saw the website’s popularity soar and investors poured millions into the venture. It opened its first international office in Hamburg in 2011 — the same year it notched up its millionth booking — followed by London in 2012. By 2013, it had served nine million guests, and last year its revenue was $4.7 bn.

Although Airbnb has repeatedly faced crackdowns from authorities around the world over accusations that many of its hosts are unregistered and operating tax-free — to the fury of the hotel industry — the company continues to come up with new money-making ideas.

These include plans for hosts to offer cooking lessons or take guests sightseeing and proposed Airbnb ‘hotels’ — announced last year — which will feature valet-parking and a 24-hour concierge.

The business hasn’t only expanded, it has changed fundamentally — but not for the better, say critics. What was once a modest way for homeowners to make pin money from renting out an empty room has become a profitable industry for investors juggling myriad Airbnb lets —and paying a fraction of the costs facing hotels.

Nowadays, only 21 per cent of Airbnb’s active listings are for spare bedrooms. More than half are managed by hosts with at least two properties on the website. (Six per cent of them control more than 100 listings each).

With many thousands of flats lying empty, thanks to the pandemic, authorities around the world have accused the business of ratcheting up the cost of housing for renters.

Your dome sweet dome in the desert: Off-Grid Dome, Terlingua, Texas (£79 per night): Escape to your very own cave in the Texan desert, in Big Bend National Park. The earthen structure shelters you from the worst of the desert heat, the shower is powered by rainwater (so be quick!), and you’ll have to get used to using a composting toilet — there’s no flush facility. Though there is an R2D2!

 Your dome sweet dome in the desert: Off-Grid Dome, Terlingua, Texas (£79 per night): Escape to your very own cave in the Texan desert, in Big Bend National Park. The earthen structure shelters you from the worst of the desert heat, the shower is powered by rainwater (so be quick!), and you’ll have to get used to using a composting toilet — there’s no flush facility. Though there is an R2D2!

In Scotland, Airbnb hosts were accused of ‘lovebombing’ local MPs about how wonderful the company is in a bid to stave off regulation to crack down on short-term lets. Across the UK, Airbnb stands accused of ruining towns and cities, amid estimates that 120,000 flats and houses are unlawfully sublet through the website.

One London-based Italian woman, Natali Rossi, was revealed to be renting out 12 properties on Airbnb, none of which she owned.

Residents have sometimes banded together to demand that their neighbours have nothing to do with Airbnb.

Often a property’s owners are unaware it is on the website, with traumatic consequences when it falls into the hands of prostitutes or ‘rave’ organisers.

In Manhattan, a comedian who believed he had rented his ritzy flat to a family in town for a wedding returned home to a wild orgy for overweight people. ‘The worst part of the internet was right there in my apartment,’ he said.

Space-age pod on the sound of Mull: AirShip, Drimnin, Scotland (£150/night): This is no simple tin box! The AirShip 002 is an insulated aluminium pod with huge windows looking out onto the Sound of Mull. Complete with kitchen, shower and sitting area, this is a space-age home!

Space-age pod on the sound of Mull: AirShip, Drimnin, Scotland (£150/night): This is no simple tin box! The AirShip 002 is an insulated aluminium pod with huge windows looking out onto the Sound of Mull. Complete with kitchen, shower and sitting area, this is a space-age home!

Prostitutes and pimps are often keen on using Airbnb rentals as ‘pop-up brothels’ as they offer more discretion than hotels.

This problem isn’t limited to cities. Police have found Airbnb brothels as far afield as Cornwall and the Lake District.

The company counters that such cases account for only a small minority of its rentals.

But Airbnb has been enmeshed in other controversies — in the U.S., a study by Harvard Business School showed some hosts discriminated against renters who ‘sound’ black, and it has been accused of insufficiently vetting hosts to ensure their properties are what they claim, with widespread ‘bait-and-switch’ scams in which the property offered online is drastically different from the one a renter gets.

London is reportedly rife with such scams, with conmen turning entire newly built apartment blocks into de-facto hotels designed for short-term rentals.

Last month, it emerged that a former Airbnb executive resigned in 2019 over concerns that the company wasn’t being honest in the information about its users — Chinese and foreign — that it was sharing with the Beijing regime.

When he complained, he was reportedly told: ‘We’re not here to promote American values.’

Yet, for many, no scandal has proved sufficient to dent the operation’s appeal. It’s not just price but also choice — you can find castles and palaces among listings.

Meanwhile, the website and its rivals have opened up travel options for everyone from dog owners to off-the-beaten-track explorers, who can visit places that would be impossible if they had to rely on hotels.

Whatever the cost to the wider world, that lightbulb moment involving three blow-up mattresses in an empty living room in San Francisco has yet to dim.


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