In her book, The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions . . . and Created Plenty of Controversy, journalist Leigh Gallagher charts the course of the startup's meteoric rise. But the tale would be incomplete without mention of the people who use the home-sharing platform. In this edited excerpt, Gallagher discusses how some of the most successful Airbnb hosts are now making six figures.
Airbnb's data reveals that the average host makes around $6,000 a year, but many hosts make much more than that. Evelyn Badia has turned her hosting business into a full-fledged branded enterprise. A charismatic former producer of television commercials, she runs two listings out of her three-story, two-family row house in Park Slope, Brooklyn. Badia, fifty, started hosting when she lost her job in 2010 and now hosts full-time, making a "low six-figure" income by booking her listings about 80 percent of the time; she says she's hosted four hundred people.
A few years in, she started a consulting business for hosts, Evelyn Badia Consultations, for which she charges ninety-five dollars per hour. There were other similar services, but she felt they were run by young guys offering tips for monetization and efficiency, and women were not being spoken to: "I was, like, 'Dude, do you realize how many hosts are baby boomers and over forty?'"
In 2014, she added a blog and a subscription newsletter, anointing herself a "hostician" and sharing her learnings with others. She also hosts a monthly webinar--hospitality entrepreneur Chip Conley has been a guest--sells a house manual for thirty-nine dollars, and runs a Facebook group called The Hosting Journey, which has more than seven hundred members.
She has become a quasi-celebrity in the Airbnb hosting community, holding barbecues and events for area hosts and speaking at the 2016 Airbnb Open in Los Angeles. She's thinking of offering a class on the challenges of dating and hosting on Airbnb. (Being single and bringing suitors home while also hosting guests is, she says, "like living with your parents.")
Pol McCann, a fifty-two-year-old Superhost in Sydney, Australia, first used Airbnb as a guest when he and his boyfriend came to New York City on vacation in 2012. They rented a studio apartment in Alphabet City for what McCann says was less than half what they'd pay for a hotel--a price so low that they were able to extend their stay from three nights to twelve.
Everything on the trip worked so well that McCann thought he should try listing his own apartment back in Sydney. He spruced it up, took some photos, and listed it, and within twenty-four hours he had his first booking. Within short order, his apartment was booked twenty-eight or twenty-nine days a month. After six months, he had earned enough from renting the apartment that he was able to put down a deposit on a second apartment in the same complex across the street.
Between the two properties, he estimates that he earns $100,000 a year after his costs. In mid-2015, he then put a deposit down on a third apartment, a much bigger one-bedroom that he spent six months renovating. He's done the math and worked it all out: by the time he's ready to retire, in five years, the apartments will be paid off and he'll become a permanent, full-time host.
Jonathan Morgan, forty-one, runs six listings out of three homes in Savannah, Georgia: one entire home that he rents, three rooms in the house where he lives, and two rooms in a vacation house on an island off the coast, to which he shuttles people by boat. He says he started hosting in 2010--"when there were twelve people in the Airbnb office"--and he's ridden the wave of Airbnb and seen the members of its community grow more sophisticated.
In his early days, he says, "nobody knew what to do, what the experience was. 'Are you the psycho killer? Or am I the psycho killer?'" He draws young, tech-savvy travelers and invests in things that appeal to them: twelve fixed-gear bicycles, video-game systems-- "anything that will attract our target group, because then our lives are easier." He charges from seventy to ninety-nine dollars per night and accrues some intangible benefits, too: his last two girlfriends have been Airbnb guests he rented to.
The growth of the Airbnb host community has also fueled a robust cottage industry of start-ups offering services to support them, everything from linen changing, pillow fluffing, turndown service, key exchanges, property management, minibar services, tax compliance, data analytics, and more. Call them the "pick and shovel" purveyors of the Airbnb gold rush: there are dozens of these start-ups, almost all of them started by Airbnb users themselves who spotted a need, hole, or pain point somewhere in the process.
Many of them are raising venture funding. Guesty, a professional management service for hosts, started by Israeli twin brothers, is one of the largest: hosts give Guesty access to their Airbnb accounts, and it handles booking management, all guest communication, calendar updating, and scheduling and coordinating with cleaners and other local service providers, for a fee of 3 percent of the booking charge.San Francisco-based Pillow creates a listing, hires cleaners, handles keys, and employs an algorithm to determine best pricing options. HonorTab brings a minifridge concept to Airbnb. Everbooked was founded by a self-described yield-management geek with expertise in data science who saw the need for dynamic pricing tools for Airbnb hosts.
One of the biggest chores that hosts often need help with, for example, is turning over keys to guests. It can be hard to always arrange to be home when the guest arrives, especially if the host has a full-time job, or is out of town, or when travelers' flights are delayed.
Clayton Brown, a Stanford Business School alum living in Vancouver who worked in finance, started using Airbnb in 2012 to list his apartment whenever he traveled on business, and soon identified the key exchange process as his biggest point of friction. He would arrange for his cleaning service to be at the apartment to let the guest in, but on one occasion a guest's flight was late, the cleaner had gone home, and the guest had to take a taxi to the cleaner's house in the remote suburbs to fetch the key, leading to frustrations all around.
"I started thinking, " 'There has to be a better way, and Airbnb is growing crazy fast, so maybe there's something here,'" Brown says. In 2013 he and a partner started a company that essentially turns local cafés, bars, and gyms into neighborhood key-exchange hubs.
Keycafe provides the establishment with a kiosk, and the host pays $12.95 per month (plus a fee of $1.95 per key pickup) for an RFID-enabled key fob. Travelers are remotely assigned a unique access code through the Keycafe app, which they then use to unlock the kiosk. The host gets notified any time a key is picked up or dropped off, and the local establishments like the arrangement because it brings in foot traffic.
While Keycafe serves customers beyond just Airbnb, including dog walkers and other service professionals, Airbnb and property managers are more than half its business, and the company is one of the stronger Airbnb "bolt-ons": it is an official partner in Airbnb's Host Assist platform, which integrates some of these vendors into its website, and Brown and his business partner have raised almost $3 million, more than most of the other ancillary services.
"As Airbnb has become larger and the valuation and sheer scale of the company has grown, it's kind of a known play in the venture space," Brown says.