Airbnb is an online marketplace and homestay network enabling people to list or rent short-term lodging in residential properties, with the cost of such accommodation set by the property owner. The company receives percentage service fees from both guests and hosts in conjunction with every booking. This new business is gradually attrting Ethiopians, writes Tibebeselassie Tigabu.
It was at the end of 2007. Brian Chesky and Joe Gebbia came up with the initial concept for Air Bed and Breakfast during the industrial design conference held by the Industrial Designers Society of America. The idea was to create a business venture of an alternative homestay between hotels (expensive) and couch surfing (free).
This online marketplace and homestay coined its name Airbnb around 2009. The popularity grew with the potential of enabling various individuals to rent out short-term lodging of residential properties for affordable price.
Many praised this initiative, which gave accommodation options for those privileged to travel.
For those who were unable to book a hotel room in the saturated market, Airbnb enabled shared spaces at a variety of properties including entire homes, apartments, private rooms, castles, boats, manors, tree houses, tipis, igloos, private islands, and other properties. Airbnb listings vary in price and style, catering to various tastes.
Since it’s launching, the number of Airbnb guests has reached 100 million,hosts 640,000, and listings have reached 2.3 million.
Airbnb has become so popular that it has presence in 191 countries and 57,000 cities. Ethiopia is not an exception to this trend, and if one browses online, one can see how the business is flourishing. And one can choose from a pool of houses according to their tastes, and rates can go as low as 11 dollars per night.
One of those houses with a good review is Cozy Artist’s House, and its Airbnb advertisement shows a small beautiful garden with a colorful outdoors canvas camping hammock.
Located around Arat Kilo, the listing states that one could be at the heart of Addis with restaurants, cafes, the National Museum, supermarkets, bus stops and internet cafés, all within a walking distance.
The listing also includes a detail of the number of accommodations, the bed type, the kind of pets guests could bring, house rules and the price range. There are online pictures that show the various corners of the house and the compound. If pictures are not enough, one can also read reviews by guests who previously stayed in the house.
The owner of this house is the artist Henock Getachew and his wife Juli. Henock’s Cozy Artist’s Place seems to have gained popularity among people who he hosted.
One online comment reads: “Henock is a warm, friendly and open-minded host who does everything to make you stay as comfy as possible. You can discover the city with him or just stay at home for some nice discussions.”
He was not making a lot of money and his newly-moved wife was not working. According to Henock, before they launched this business, the family was in a financially compromising situation.
Therefore, his wife came up with the idea of subletting their house. At first, sharing a bathroom and a living room with strangers seemed unbearable, and it needed getting used to.
Having convinced themselves of this idea of sharing their home with strangers, they started the registration process online. A valid email and telephone address, a government-issued ID and profile, as well as user reviews and social connections to allure more customers were all needed.
For Henock, it did not take that long to make his business viable. Many tourists flocked to his cozy compound and in thirteen months, he was able to host around forty-five guests from more than twenty countries.
By subletting his rooms, not only did Henock stop worrying about where money for house rent would come, he was able to get additional income. In addition to the financial gain, the networking as well as socializing is some of the things he values most.
Henock believes in the principle of Airbnb, and creating a home-like setting wherever one travels.
According to Henock, he tries his best to make his guests comfortable. Sometimes he goes out of his way to show them around the city, cook with them, arrange for a transport service, and even obtain a SIM card.
So passionate about cooking is Henock that on many occasions he invites his guests for breakfast.
Since the host can determine pricing, Henock’s rate per night is 20 dollars but this price differs for couples. Guests have an option of messaging the host directly, and the latter has at least 24 hours to accept or decline a reservation request.
Henock usually has a reservation when it comes to guests who do not reveal personal information. “My house does not function as a hotel and I don’t want them to see it as that kind of establishment. In addition to getting service, this is a place to make friends,” Henock says.
Since launching this business, he has made friends and family. One of his guests from Canada, Allen, is a memorable one who showed him ways of cooking various dishes and another guest he remembers is an African-American man who came here looking for a bride.
In search of his roots and heritage in Africa, the gentleman extensively traveled to many African countries while at the same time looking for a bride. Finally, he was able to find a bride in Ethiopia where he stayed for ten days.
Though Henock enjoys meeting people, there are times when he was pretty occupied all the time, leading to his exhaustion.
The business in Ethiopia is flourishing with hundreds of listings, but according to Henock, when it comes to Ethiopia, it has its own unique challenges.
Airbnb processes transaction between hosts and guests by charging a service fee. It charges hosts and guests on every booking; for guests it ranges between six percent and 12 percent depending on the price of the booking, while from hosts three percent from each guest booking for credit processing.
Since online payment, credit card and other schemes are non-existent in Ethiopia, it makes transaction very complicated. This problem does not affect Henock since they use his wife’s international account, which makes transaction easy.
Nevertheless, for another famous Airbnb spot, Manuhie Backpackers Lodge, listed on Airbnb as marvelous, things have not been as smooth.
Nathnael, the owner of the Bahir Dar property, was able to get the title of super host, one of the highest titles in Airbnb. He was able to get this by fulfilling such criteria as at least 10 trips throughout their listings in a year, have a 90 percent response rate, or higher, get five star reviews on at least 80 percent reviews and never canceling. His place is also highly recommended on websites such as Trip Advisor.
A senior student in electrical engineering at Bahir Dar University, Nathnael started this business a year ago with a family house in an area commonly known as Kebele 3.
Though the house has ten bedrooms, they dedicated only three rooms for the Airbnb business.
For Nathnael, the registration was not easy since there was no online payment in Ethiopia. Therefore, following recommendation from friends, he approached Ethiopian banks, and they suggested an alternative way of doing transactions.
The idea was to use Swift codes, a standard format for business identifier codes used to uniquely identify banks and financial institutions globally.
So using Swift code, Airbnb executes the payment by wiring the money.
According to Nathnael, this process of wiring money made them lose quite percentage of the payment.
“We only charge 15 dollars for a single room per night. From this we also lose a percentage because of the absence of direct online payment,” Nathnael says.
Though the process seems discouraging for Nathnael, they also have a tour package for tourists visiting attractions in Bahir Dar.
“The benefit for us is showing the real Ethiopia and Bahir Dar. Staying in a hotel does not give you that feeling but Airbnb creates an option of staying with the locals and learn about the country from the locals,” Nathnael says.
Nathnael also lives in the house he sublets, giving him a chance to get to know his guests. Though Airbnb is becoming popular in Ethiopia, it is not known officially or does not have any legal recognition. That is something that worries Henock. Since there is no taxing system or any law that clearly states how to deal with short-term renting of properties, he feels anxious about his work. “This business is done in the underground and there is always a risk to that if there is no official recognition,” Henock says.
On the other hand, Nathnael registered the other rooms he rents out as guesthouse so he is not worried about the three rooms he rented out for Airbnb.
Even though it is at an initial stage, the Ethiopian Airbnb has been popular in the narrative of putting “Africa as a dangerous place.” According to an article entitled “The Nicest Airbnbs in 25 Dangerous Countries,” Ethiopia is listed as 16.
With its popularity Airbnb is stirring controversy all over the world with on-going battles with states and local regulators related to tax, and is also dealing with the #AirbnbWhileBlack controversy: a protest movement against multiple instances of hosts apparently declining guests due to skin color.
This trending social media hashtag has highlighted possible racial bias by users of the AirbnbR rental app.
Jazmin Jones, who stayed in one Airbnb establishment in the Bole area called Annex, has a conflicting attitude towards Airbnb. For more than three years, she rented out her apartment in New York. Speaking of her experience, she actually says that it is one of the most racist platforms.
She dealt with Airbnb customer representatives regarding various disputes.
Airbnb advertises her neighborhood as a Jewish area; but the reality is that it is a black neighborhood so when white people show up, it is contrary to their expectation.
Therefore, a dispute arises and they always claim a refund. Therefore, Airbnb explained that the reason the renters wanted to cancel was because of racial prejudices, and gave them the option of keeping the money or giving it back.
In addition to these incidents, one recent case was that in which the management of Airbnb sided with a guest who was renting their apartment who planned to rent their house for two weeks and potentially extend it for a month.
He showed up in their house one day and claimed the toilet was leaking, there was mold in the shower, and other complaints. She called the plumber to check his complaints but there was none. According to Jazmin, Airbnb, without any photographic evidence, cancelled his reservation, putting them in debt. Therefore, they decided to stop being a host. Though she stopped renting her rooms out, she does not deny how convenient it is to be in certain places, like her stay in Addis Ababa.
Regarding her Addis Airbnb experience, she says it is a new house where Wi-Fi as well as dinner and free alcohol were available. “In this guest house, any comfort I could have asked for is provided and it is only 25 dollars,” Jazmin says.
She also has done it in other countries such as France and Japan. In Tokyo, they were misled into a fake address. She went to the listed address, but it did not exist and had a hard time locating the place. Finally, they located it but had to deal with the police since Airbnb was not legal.
Critics of this lodging arrangement have long claimed that the service removes affordable housing from the market by turning rentable apartments into unofficial year-round hotels.
In many states, many landlords evicted tenants to transform their properties into Airbnb establishments. Even though Airbnb claims on many occasions as primarily offering an economic lifeline to help residents pay their bills, rent or mortgage, in many countries hotel industry groups are upset at the loss of revenues.
Many countries are banning Airbnb or formulating new bills. A pending New York bill would make it illegal for many people to list their apartments on sites like Airbnb. It is already illegal for people to rent out most apartments for fewer than 30 days in the state.
According to a CNN report, hosts violating the ban would face up to 7,500 dollars and Airbnb says more than 40,000 hosts could be subject to the fine. Some European and Asian countries adopted laws that restrict to host paying guests for short periods. Following that, some countries like Germany banned Airbnb.
In addition to that, Airbnb is on the Boycott, Divestment, and Sanctions list of companies. The company was added following media reports that accommodation listing included settlements in the occupied Palestinian territories that are advertised as being in Israel.