20 November 2011

Is This The Way Forward for P2P Accomodation?

Regular readers and followers of the Professor's Wisdom knows that I am not a fan of the aggregated P2P accomodation business of Airbnb. In my view there is a lot of risk and lack of regulatory adherence hurts consumers. Their somewhat cavalier attitude to the consumer got them into a lot of hot water this past summer. And rightly so.

Part of the problem in P2P accomodation services is that there are a wide number of disconnects between the needs and wants of the people who own the property and those of the consumers. This is not new. However when someone steps into the middle to connect the two there has to be a clear set of roles. Either you have a marketplace where P2P can take place or you are an agent acting for one side or the other.

In the case of the former - this is just like Criag's List. So anyone doing this in an ad model can do so provided they understand their responsiblity to ensure that the ad is genuine. Classified Newspapers around the world have been doing this for years. Its fine. Caveat emptor applies.

In the case of the latter if you step into the middle of the relationship even if its just to collect the money they you become something called an AGENT. In this case they you take on a series of responsibilities. This is the flaw (fatal in my opinion) that companies such as Airbnb failed to comprehend in their pitch to investors.

At last week's PhocusWright in Fort Lauderdale Florida, Bob Sharples CEO of HomeAway was interviewed. Having put a significant ring fence around his business - he was able to demonstrate that the process of renting is not like that of fixed products such as an airline ticket or a car. He made the point that much of the value of HmeAway is not to facilitate automated booking but rather to enable a converesation between the owner/manager of the property and the consumer.

Indeed I have always felt that accomodation by definition drives more customer service questions than an airline ticket. If you are dealing with something that has more unknowns such as a private condo vs a fixed and predictable product such as a hotel room, then naturally you want to get some better sense of it. Having used HomeAway (successfully) and tried to use Airbnb (unsuccesfully so far) I can assure you that Bob's point about the conversational element of his business is spot on.

Last week, DepositGuard put forward a survey which highlights some of these issues. Clearly DepositGuard wants to promote its services, however they have a valid point and seem to be addressing the need. The survey demonstrates that there is a clear missing component in the P2P process that needs an honest broker to solve. Given Airbnb's troubles in this area, both renter and property owner need to ensure that they are dealing in a safe and secure fashion. Ideally there should be regulatory controls in place that address this - and their are - however compliance is almost non-existent.

P2P accomodation services are addressing a need that has long existed in the market. I recall when my team launched Expedia UK that we had Home Exchanges as a lead facility. Personally I hate the impersonal nature of hotels and prefer to stay with friends or take the extra space that condo type accomodation provides. The concept that Airbnb proposed is very attractive to me personally. But do I trust them. Nope I don't. Perhaps this this is the answer.

Think about it