Airbnb Shouldn’t Be Surprised.
With some guilt, I have to admit watching the Airbnb bad news bandwagon move up the media food chain has been a little bit entertaining. However, my experiences have included moments of inspiration. I have been graciously hosted by folks who have suffered terrible tragedies, and are avoiding foreclosure through Airbnb. Sharing a pizza, I have looked into the eyes of children, able to rely on the stability and security of remaining in their home, following the sudden loss of a parent because of Airbnb. I have been gracefully hosted by some bouncing back from divorce by earning some additional income from Airbnb. Show me one hotel that can share those claims.
The rush to judgement only required about 2 weeks before the first headline in a financial blog raised the question, “……is this the beginning of the end?” (Yahoo Finance) Airbnb’s recent challenges should not be a surprise to anyone. As soon as the news began circulating of Airbnb’s $10B pre-IPO valuation, exceeding the market cap of Hyatt, the time for serious attacks had arrived. Lesson 1: When an aspiring darling of silicon valley out-performs an established and influential business model in the business equivalent to lightspeed, prepare thyself.
At only four years old, Airbnb reservations in New York city were already exceeding the leading hotel properties some of which have a 220 year history in that city. What city has proven to be the most challenging? Ahhhh yes- that would be New York. If Airbnb deserves criticism, and they probably do, then start with the very real possibility that the executive team may have missed being prepared for this day. Lesson 2: Managing risk may not be sexy to VC’s, certainly not the media- but it is necessary. Protecting, strengthening, the delicate nature of TRUST among consumers is precisely why we formed get2kno!
Does anyone really believe these unsavory stories about misuse of properties, surfacing in a nice neat sequence, is coincidental? Sure, some of the damages incurred are genuine, and those are violations to be fully prosecuted. At the same time, after spending 25 years in the insurance industry, please rest assured- if consumers knew the loss patterns in hotels, the tourism industry would go broke. Consider the following search results from Google News:
NOT very scientific to be sure. However, one cannot deny a certain consistency to the results. If 1,000 reservations have resulted in damage, out of 4,500,000 reservations- Airbnb members are about as likely to incur a loss during a reservation as they are to be hit by lightening. Regarding Prostitution? What is that cliche’ about media? Oh yes- sex sells. Let’s boycott any hotel chain which ever had a room used to shoot porn or to transact illegal activity. Really?
In closing, check out airbnbhell.com, then ask yourself- who would bother setting up such a site? One can only speculate. Maybe a tourism union? How about a class action law firm tallying up potential clients for after the IPO? What about a hotel chain? Does Airbnb have some real problems to solve? Absolutely- Lesson 3: customer (member) service needs to be more about the members and less about the bottom line. While some traditional rules of business may not apply to the latest explosive new model being fueled by Silicon Valley, one must always respect the laws of nature- certainly human nature. Lesson 4: Without exception, any company may one day face a Johnson & Johnson “Tylenol Moment”. Again, be prepared- don’t rule anything out when serving the masses- understand that asking the hard “what if…” questions behind closed doors is safe & prudent. But…if that day comes- focusing on any issue above the safety & security of your customers is like engaging the Warp Drive towards a “Kodak Moment”. By the way, my experiences as a member do include 2 that were entirely negative. The assistance from member services was stellar and immediate. I’m just sayin…..
Guy Fraker CEO-get2kno,Inc