A Coliving Operator’s Guide to OTA Usage
I generally don’t depend on Online Travel Agencies (OTAs) to fill my coliving space. In fact, my goal is to completely remove them from my sales process. I have previously written about the inefficiencies they bring to your operation. Now, let’s get specific and talk about my experience using Airbnb for Startup Embassy.
When I started operating, let’s be honest, I was doing it in a grey zone, like every other hacker house in Silicon Valley. Airbnb was pretty new, and I was afraid to publicly list my house. The space was (and still is) unregulated, and it wasn’t clear how local governments would perceive platforms like Airbnb. It took three months of operation until I used the platform. For some time, it worked like a charm, bringing many new leads to our coliving.
But after years of heavy usage, I’ve grown mixed feelings about it. So if I had to balance the pros and cons, I would advise against using it for your coliving.
That would be the simple conclusion. Of course, it’s a bit more complex than that. At some point, Airbnb counted for around 30% of my reservations. Why would I advise against it for something that amounted to a third of my revenue? Here are my reasons:
Cons of using Airbnb for coliving
It’s Difficult to Communicate Your Values
I’m running a coliving. It’s a different animal than renting a spare room, and to be fair, Airbnb wasn’t designed for booking coliving rooms. The core of any coliving is its community, and for serious operators, this means heavy filtering of potential guests.
Airbnb has a section where you communicate your space’s rules, but the filtering I do is much stronger. It’s not that it’s forbidden to smoke on the premises, or that at 10 pm we have zero tolerance for noise or whatever. It’s that we only accept entrepreneurs, founders of tech startups. We want to make sure that you are aligned with our community. We want to know what your company does, and why you are coming to Silicon Valley.
Because of our niche, we need to ask open questions to ensure we land on a proper decision. Airbnb would bring all sorts of low-quality leads because people don’t fucking read the listing description!
In the beginning, it was OK, but after some time, we were rejecting 80% of inquiries because they were clearly not a good fit. The platform forces you to answer all inquiries in 24 hours unless you want to be penalized. That’s understandable, but the leads we got were so uninformed about the values we searched for, that using the platform required us to use a large bandwidth of our time. And it was very frustrating.
The titles of all our listings said: “ONLY ENTREPRENEURS ACCEPTED!! If you are not a tech founder, we will reject your application”, but, of course, people applied anyway. It was discouraging to wade through countless inquiries (rapidly) only to find out they didn’t read our requirements.
There’s No Way to Communicate the Experience We Provide
At Startup Embassy, our colivers live an intense experience. Apart from pictures and testimonials, there’s not much more we can do to communicate what you will find in our space.
It was common for Airbnb applicants to arrive blind to our space. In their minds, they were only booking an affordable bed.
I remember Nima’s case, who just booked a one-night stay, expecting to wake early in the morning to take a flight home. Nima wasn’t expecting anything in addition to a bed for the night.
We accepted his application because he made it clear he was a startup founder. However, when he arrived, his first two hours were completely quiet, and he kept looking around, confused. So much so that I thought he was weird.
But suddenly, he rushed to me literally yelling: “Now I get it! NOW I GET IT! This is amazing!! This place is fucking awesome!!”
Nima didn’t use his bed that night; he was so excited that he stood awake all night with our community. Even after those 24 hours, to this day, he’s a part of our family.
Can’t Differentiate Our Coliving From Other Listings
This is a byproduct of the two previous reasons. Why is our space different from others listed on Airbnb? The platform levels the playing field for everyone, and it’s challenging to stand out.
People renting their spare bedroom coexisted with true hacker houses and with what I consider the worst: the opportunistic hacker houses (colivings). Those who don’t give a fuck about its community but say they have a great one, only to take advantage of the poor individual and milk the Real Estate cow.
We all say we are awesome in our listing description but are we?
One way I solved this was by showing pictures of people. All other listings around the city showed perfectly organized, tidy, and clean empty rooms. I did the opposite. All of our photographs showed entrepreneurs working on their computers, enjoying our events with famous investors, or pitching in some Silicon Valley startup conference.
And guess what, I did not show a single one of our rooms! I reasoned that our guests are not looking for a nice room but a community! Of course, that doesn’t mean that our rooms are not nice and tidy, but I don’t even want to have that conversation when communicating my business.
If someone applies to stay with us, asks the right questions (about community, events) and answers our questions with the right keywords (investor, startup, excitement, sharing, pitching, scaling, mentors, to name a few) and then asks about the rooms, we will gladly show pictures.
But when the order is reversed, and they only ask about the physical space, they will most likely be rejected.
I once got an Airbnb request that stated:
“I want: A quiet room, with a window facing the garden, a desk, and a bottle of water every night.”
Just like that. I replied with our polite template for rejects. I couldn’t care less if they were an entrepreneur or not. And I made a considerable effort to restrain myself from answering in a not so polite way.
You Don’t Own the Data
Airbnb makes a huge effort to hide personal data from your guests: no email, no phone number. We had to implement a process to guarantee that once they booked through the platform, our House Manager would get those. We asked them to provide their email so we could add them to our Slack channel. Otherwise, they would miss interacting with our community.
But when we get inquiries directly from our website, we get much more:
- What channel did they use to find us?
- Which keywords did they use?
- What is their reason for traveling?
- What’s the name of their company?
And any question we wanted to ask. All those questions were automatically added to our CRM. With Airbnb, it was all manual and incomplete.
In addition, consider that lost leads might become future clients. If you keep their information, you can always retarget them. On Airbnb, you are left to expect that one day they will knock on your door again.
Airbnb Penalizes You if You Reject Too Many Inquiries
This one really pissed me off! Our Airbnb profile earned the badge of Superhost, which is a reward given to experienced hosts who have proven to be a cut above the rest. It requires consistent good reviews, a response rate over 90%, etc.
It takes time to get to Superhost status, and if you get there, it does boost your profile visibility and perception of trust, which is good. Guess why we were able to get to Superhost status? Because we got excellent reviews, and we diligently answered requests on time, even if it meant spending bandwidth in politely rejecting inquiries we should not receive. And why did we get really good reviews?
Because we filtered our guests.
This means that we reject 80%+ of applicants because Airbnb does a terrible job pre-qualifying them. Not only that but their revenue model is directly correlated to the number of guests you host. This means that if they send you someone and you reject the person, they lose money. And Airbnb doesn’t like losing money.
I don’t mind losing money on an unqualified lead because my strategy is for the long term, and my obsession is to build the right community, not to earn extra bucks.
After some consecutive rejections, they send you a message, threatening to block your account:
“But hey, Airbnb, it’s my house, my rules! I’ve proven to you that I excel in the service I provide. It’s correlated to my filtering process. And now you want to punish me because I don’t want to accept someone into my house? Just wow.”
Most Inquiries Are for Short Term
Well…this can be good or bad, depending on how you see it. Ideally, you want stays that are longer than a month in your coliving. Most Airbnb requests were three days long, which added stress to our operation (cleaning and onboarding the new members). If you get several of those in one day, your coliving becomes a war zone. Not to mention that in some regions, it might be illegal to host short stays.
Other Issues With Airbnb
These are not related to coliving in particular but didn’t help in our day-to-day operations:
- The platform is difficult to manage. It’s easy to miss inquiries or follow up on messages. If you manage many listings, changing one text or picture is a repetitive task you could avoid if they had templates. But no, you must do it one by one.
- The platform changes too often, and when it does, it doesn’t communicate it to you. So one day, you realize that everything has moved, or they have added an additional field that if you don’t fill it up with information, your profile will be at a disadvantage.
Pros of Using Airbnb
Of course, there are pros; I won’t deny it.
It Provides New Leads You Wouldn’t Get Otherwise
That’s the big one, especially when you are starting. In our case, we operate in Silicon Valley, so many travelers arriving are entrepreneurs. Most repeat clients first discovered us through Airbnb.
Good for Short Term
Wasn’t this a bad thing? It depends. Your booking calendar should show many long-term stays. But it always has holes on it, single days that are impossible to occupy, especially if the vacancies are near in the future. Airbnb is perfect for filling those spaces easily and allows you to get to that ideal 100% occupancy rate. It’s great as a complement.
Money Gets In
Getting paid is something you can’t take for granted. I’ve learned painfully that sometimes you must chase people to get paid. A task that should be merely transactional (collecting the payments) is, in fact,another process that adds a layer of complexity to your operation while not providing real value.
Airbnb simplifies it. The moment a guest arrives at your space via Airbnb, you have the certainty that you will get paid. This makes their fees so worth it.
Mama Carlos Says:
I would ask myself the question again, why use Airbnb? Well, it depends. If you are starting your coliving, yes, you should. But be aware of the problems that I described above. It’s important that you focus on building your brand, your culture, and your community to reduce the dependency you will have on the platform day by day.
After a year or two, you should only depend on Airbnb to fill those gaps in your calendar for only very short stays.
Also, make sure to measure your metrics correctly. Notice I said that 30% of our reservations came from Airbnb at some point, but I didn’t mention the impact that had on our total revenue.
Having 30% of bookings coming from it, but all short term, what was the real effect on my revenue? An average stay from an Airbnb booking would give us around 200$, while an average stay that came directly via our website would be around 2500$. So even though that 30% might look large, it was, in fact, anecdotal if compared to the total revenue.
Is it worth the bandwidth it requires to manage? To me, only if you have built your sourcing channel and your business doesn’t depend on mama Airbnb to survive.