Airbnb, an online service that facilitates the short-term rental of rooms, houses, apartments, and more, has revealed a huge uptake in London bookings in the lead up to this month's Summer Olympics. The company told Bloomberg that it expected a three-fold increase in its London business this summer, with pricing averaging out at 25 percent higher than normal.
London is preparing itself for a huge influx of visitors as the games begin, and the vast majority of hotels and hostels are booked, leaving a handful of rooms that are either very expensive or poorly located. Some hotels have been full for the Olympic fortnight since last summer. Airbnb users have added over 6,000 London properties to the site this year (a large portion of which are due to the company purchasing British site CrashPadder) and has 4,500 London bookings covering the next three weeks.
Many locals are looking to escape what they see as a major annoyance
Airbnb's success can be attributed to a wealth of disillusioned Londoners looking to escape what many locals see as a major annoyance, rather than as a celebration of humanity — or at the very least, cash in on a spare room. Some landlords have evicted tenants in the hope of securing a lucrative short-term let from a disorganized last-minute visitor, and are marketing rooms and apartments at three to four times the regular rate. While the cheapest remaining hotel and hostel rooms are fast-approaching the $300 per-night mark, Airbnb still has rooms available for under $100, and entire apartments for under $300. The company is profiting from all this business, of course; when users rent out their property, they give Airbnb a cut, and the company also charges the booker a small fee. But it's by taking care of finances that Airbnb lends an air of security to proceedings — transactions must be made through the company, which holds onto the funds until the visit is about to commence.
Although the company is more attentive to its customers' needs than your local newspaper, Airbnb is merely the evolution of the want ad, just like Craigslist and Gumtree before it. A cursory glance through Gumtree, the UK's self-proclaimed "number one classified site," will reveal thousands of "available" properties in London. However, the vast majority of London listings are posted by realtors, and an equally vast majority of those properties are not available, merely there to entice a user to make that call. Fortunately, the true scams — the sort that ask you to make a Western Union deposit just to show you're serious — are few and far between. For short-term lets, however, the percentage of scammers rises and the number of legitimate private properties drops — Gumtree has become little more than a shop window for other websites and companies to harp their wares, offering barely any protection for either buyer or seller.
Airbnb, however, is all about real people, and trust, backed by a $1 million property damage insurance. If you want your property to appear higher up in Gumtree results, you pay them money; to do the same on Airbnb, you get positive feedback. If you don't respond to requests within a reasonable length of time, your search rating on the site falls. The success of your listing essentially hinges on your guests' experience — if you're a first-time user, you can link in social networking profiles so that the other party knows you're a real person. It's not a perfect system, as proved by the sad case of a renter who had her home trashed and robbed last year, but for many fleeing London before the Olympics, it's vastly preferable to paying a private company hundreds of dollars.