How to get a room with $15/night for 2 people: What you need to know
In 2016, when Airbnb became an industry darling, its success came down to a simple idea: to let people rent a room in their home for $15 a night and then pay rent to Airbnb on the spot.
Airbnb’s technology allowed users to stay in their homes for a couple of days and then rent out the rooms, with no upfront fee.
“It was very revolutionary to see how quickly people used it,” says Mike Lander, an Airbnb partner and co-founder who’s also a professor of marketing at Northwestern University.
“People loved the idea.
And then there was a lot of hype about what Airbnb could do for cities.
The thing was, what Airbnb does for cities is not new.
They’re doing it in a way that’s very similar to how hotels do it.”
Airbnb users have been using it to host events for the past year, like the Grammys, concerts, weddings, and even a few parties.
But now that the company has begun to test the service in cities, the company is hoping to get more people to use it for things like hotel stays.
For a room that costs $10 a night, that’s $3,000 in total per person.
But for a room like a one-bedroom apartment, that means $2,500 a night.
“What’s going to be really interesting is, the more people who use Airbnb, the less money Airbnb will have to raise to pay for the rent,” says Ryan O’Neill, a professor at the University of Michigan.
That means that, as Airbnb continues to grow, it will be much easier for cities to offer a cheaper alternative to hotel rentals, as the number of people willing to pay more per night for a hotel room will continue to decrease.
“We think that in the near future, Airbnb will be able to scale up to an even more massive scale,” Lander says.
Airbnb has already started using the technology in places like Austin, where it’s trying to sell its hotel room service to residents.
But in places where Airbnb doesn’t already have a presence, like New York City, Lander and his colleagues are working on ways to give Airbnb users an incentive to rent out their homes to people who don’t already live there.
Airbnb could charge hosts a percentage of the rooms they rent for a certain time period, or even a flat fee for the first month or two of their stay.
If that’s successful, Airbnb could offer other ways for users to earn money off their rooms.
“For the first few months or months, there are some potential problems with that,” says Michael Gebbia, an associate professor at UC Berkeley’s Haas School of Business.
“But then the business model is built around a few years of usage, and that’s when the demand is there.”
For Airbnb to scale well in New York, Larger will need to convince some of the city’s more conservative Airbnb users to switch to the service.
That will require the company to get people to accept that Airbnb will eventually lose its monopoly over hotel rentals in the city, and also convince them to pay a lower fee for a month or a day’s stay in New Jersey or New York.
The city is looking at ways to make that happen, including charging the same amount per month for a one or two-night stay as a hotel in a major American city like San Francisco.
“The first step is to try to convince the public that this is something that’s good for them and their community,” says Andrew Katz, a spokesman for New York Mayor Bill de Blasio.
“And we’re not going to let Airbnb get away with it.
We’re going to fight it tooth and nail.”
Airbnb has also been looking at what it could do to make the company more appealing to consumers in smaller cities.
In 2017, Airbnb expanded into Boston, Philadelphia, and Washington, DC.
And in 2018, it announced plans to expand to Portland, Oregon.
But the company still has work to do in the larger cities that already have it.
“If you look at cities like San Jose and San Diego, which have large populations of young people, they’re also going to have a lot more people willing and able to use Airbnb,” Katz says.
And the company also needs to find ways to get some more people interested in its platform in cities that have traditionally been averse to it.
For instance, the city of Austin, Texas, recently launched a pilot program that allows residents to rent a single-room apartment out for the night, and then charge a flat monthly fee to Airbnb.
But that won’t be enough to attract a large number of Airbnb users.
Airbnb already has a large user base in the U.S., with about 7.4 million members, according to data from data provider Rentrak.
But if it wants to get into bigger cities, it might have to start by getting people to rent rooms in their houses instead of renting out