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Faced with opposition to its hosts’ apartment rentals in cities from New York to San Francisco, Airbnb co-founder and CEO Brian Chesky said the company engages in talks with officials in municipalities where issues have been raised, seeks to be transparent, and doesn’t want to operate in cities where it isn’t wanted.
Speaking at the PhoCusWright conference in Scottsdale, Arizona, November 15, Chesky was asked about the issue of hosts renting apartments to guests even though such practices may violate a lease. Chesky pointed out that 92% of hosts own the properties they rent out to guests so leases or subletting isn’t an issue, and more than 50% depend on income from such rentals to pay their mortgage or rent.
Airbnb is changing the way some people make their lodging choices as an alternative to hotels, but there is no word yet on Airbnb withdrawing from any major cities.
Hosts using Airbnb have been accused of dodging taxes, and Chesky noted that Airbnb files 1099 income-tax forms for every host who rents out a unit so they would be subject to taxes, and “is in dialogue with cities” on how to remit local taxes. Airbnb has argued that its hosts should not be required to pay the same room taxes that traditional hotels are required to pay in many municipalities.
Visionary or delusionary?
Chesky also outlined his vision for the future of the sharing economy, and his talk was controversial, sparking much conversation by conference participants, some of whom lauded his creative thinking, while others thought it foolhardy.
Throughout his talk, Chesky argued that mobile trends and the sharing economy will end “travel,” as we know it, because millions of people will be constantly mobile.
“Travel is going to go away in the future,” Chesky said. “People won’t travel, they will be mobile,” staying in one place for a night, and perhaps moving onto another locale for four months.
“When you are actually connecting and meeting in the real world, that is what travel is going to be,” Chesky said.
In this scenario, Chesky derided the inefficiencies of apartment leases, contending they will become relics as people will move around, living in one place for a few weeks or months, and residing elsewhere for another period.
That prompted a tweet from Skift co-founder Jason Clampet:
— Jason Clampet (@jasonclampet) November 15, 2012
The sharing economy as a solution to the European economic crisis
Chesky even went so far as to outline his vision for tackling the European economic crisis, noting that millions of tourists want to travel to Greece and Spain, and they can be paired with millions of unemployed Spaniards and Greeks, who will become the new “micro-entrepreneurs,” and can serve as hosts and local tour guides to help travelers experience the world like locals.
This dynamic will be the next social network, Chesky said, arguing that real “social” will take place “after Facebook.”
In this super-mobile, changing world, romanticism about owning a car or home “is going away,” Chesky opined. He wasn’t clear how this would affect the 92% of Airbnb hosts he mentioned earlier who are owners.
Chesky’s address at the conference found him on-stage with two interrogators, HomeAway CEO Brian Sharples and Simon Lehmann, CEO of Interhome, which handles professionally managed vacation homes in Europe.
But if people thought the presence of Chesky of Airbnb along with the vacation home offcials would spark fireworks, Chesky sought to dampen that prospect.
The sharing economy is a win-win for all concerned, Chesky offered, in a kumbaya moment.
“For us to win, nobody has to lose,” Chesky said. “The idea there has to be a battle between us and HomeAway, between us and the hotel industry is absurd.”
He said the travel industry is “not a zero-sum game. For us to win, everyone can win because the travel industry is under-valued.”
After predicting the transformation of the travel industry, offering a solution for saving the European masses, and pointing to a Thoreau-like relationship between consumers and their material possessions, Chesky turned to more practical matters — the financial prospects of Airbnb.
Chesky said Airbnb is not profitable, but added “you have to be [profitable] at some point.”
He said Airbnb is investing heavily in regions such as Asia so it can build a foundation for long-term profitability.
“To be extremely profitable, you have to build a network in cities around the world,” Chesky said.
That is, of course, one might interject, if cities and countries will still exist in the future or become totally overtaken by the new mobility and sharing economy.