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How Airbnb craze is giving hotels a run for their money

REAL ESTATE
By Peter Theuri | Jun 23rd 2022 | 6 min read
By Peter Theuri | June 23rd 2022
REAL ESTATE
Airbnb is an American company that operates an online marketplace for lodgings. [iStockphoto]

Picking between a hotel and an Airbnb seems like a big dilemma nowadays. With the hospitality industry now in a rebound after the Covid-19 shocks, hoteliers face huge competition from Airbnb properties for guests. Both are boasting of unique selling points for a client base increasingly spoilt for choice.

Airbnb is an American company that operates an online marketplace for lodgings, primarily homestays for vacation rentals and tourism activities. Homestays and vacation rental platforms have come to be widely referred to as Airbnb, riding on the fame of this company.

Their attractiveness seems to have grown in the recent past, with proponents citing “comfort, freedom and flexibility” as the key reasons they would book themselves into one.

“Assume you are on a vacation and you do not want to miss out on anything, and yet you do not want to follow routine such as breakfast, now that hotels have set hours for such. There is only one place to be - a vacation rental,” says Claire Angoye, a finance and investment professional who is into the homestays and vacation rentals business.

That you will get up when you want to and do your activities at your own time, and pace, changing your schedule at will, is a convenience people are willing to choose and pay for.

Morris Aron, a real estate expert and proprietor, says people will opt to book into a hotel for more “business-like activities” saying that those out to have fun will want to have the power to manage their time and activities. And the latter, it seems, is increasing by the day.

The homestays and vacation rentals business has grown in leaps and bounds, gaining traction, and falling into the dragnet, of The Kenya Tourism Regulatory Authority (TRA).

Kenya implemented regulations for tourism activities and services under the Tourism Act 2011 and the Tourism Regulatory Authority Regulations 2014.

The TRA issued a public circular at the start of March 2021 requiring all persons who offer licensable accommodation facilities to register with the body by March 31, 2021.

Airbnbs offer comfort, freedom and flexibility. [iStockphoto]

“The circular was issued pursuant to the Fourth Schedule to the Tourism Authority Regulations, 2014, which designates serviced apartments, serviced flats, beach cottages and holiday cottages amongst others, as regulated tourism activities which need to be licensed on an annual basis,” reads the official Homestays and vacation rentals website.

A 16 per cent Value Added Tax (VAT) was also later imposed on anyone looking to lease out their apartment, in addition to a Sh1,000 registration fee and an annual Sh26,000 fee per unit.

And with the mainstreaming of the industry, many have given vacation rentals a try, with varying degrees of satisfaction. However, it has become an issue worth debating, even defending, showing the importance homestays and vacation rentals have in the hospitality sector.

“Hotel booking and check out have a lot of processes, unlike in homestays,” says Maxwell Otieno, a regular vacation rentals user. “And in such a property, food is prepared the way I want it, unlike in a hotel.”

This is in reference to many homestays and vacation rentals availing an offering for chefs who can be hired at the client’s desires.

That such vacation rentals will allow for in-house partying without incurring additional costs or having warnings fly clients’ way is also a motivating factor for many, with Otieno saying that those in “non-urban” settings create “an especially wonderful atmosphere for parties”.

While he admits that hotels in the countryside offer the ambience that homestays and vacation rentals do, he says that hotels of such nature are few and not easy to come by.

Ms Angoye says that for people travelling in groups, vacation rentals give them better rates in terms of cost, alongside allowing them to pursue their activities outside a fixed programme. “You could spend your time out and will come back to a ready meal because your chef follows your instructions,” she says.

Also, that homestays and vacation rentals do not charge per head makes this arrangement attractive, instead of charging per space that is being rented out for a few days.

Homestays and vacation rental platforms have come to be widely referred to as Airbnb, riding on the fame of this company. [iStockphoto]

But when clients rate, there is a problem. A Twitter user posted a screenshot of a homestay host threatening them because the user had given poor ratings.

“I have your name, your picture and your number. You have 48 hours to remove your review or I am hiring a private investigator to obtain your address and then the fun begins,” read the host’s screenshot message.

The user by the name of Dr Alex Moore asked Airbnb: “In the interest of my own personal safety as well as public safety, can you explain to me and everyone else why the host who sent me this message is still active on your platform? This person is clearly a threat and should not be allowed to host guests!”

Another user, Dee Warira, in response, said: “This is why I don’t trust Airbnb. Never have. I’ll always take my chances with hotels. I can’t risk my safety when there’s zero accountability and no recourse for clients when things go south.”

Ms Angoye says the rating system is more favourable to the client and organised in that the listing algorithm favours the top-rated hosts.

The client is allowed to record their displeasure with a rental as much as they would like. She, however, argues that clients should try to be more reasonable when making the ratings even when a little disenchanted with the hosts - some gravitate on small issues that end up costing the business owners.

At some point, when the concept of homestays and vacation rentals was still relatively new and attractive to excited, holidaying people, folks “overdid” it.

Every person with any house that they thought could bring them any kind of income converted it into a homestay, Mr Aron says. But even to this day, some hotels might feel their position is threatened, he says, with some even “operating homestays and vacation rentals within their premises.”

Lake Elementaita Mountain Lodge (LEML) General Manager Charles Muchangi, however, says hotels’ unique offerings cannot be matched up by vacation rentals’, and that hotels will remain competitive.

Lake Elementaita Mountain Lodge (LEML) General Manager Charles Muchangi. [David Njaaga, Standard]

“You get personalised service in properties in LEML - you don't get personalised service in homestays and vacation rentals. The majority of potential guests are looking for affordable high-end places to put up and this gives them exactly that unlike a vacation rental,” he says.

He says guaranteed security, alongside privacy, will have more people choosing such a hotel over homestays and vacation rentals. Other services that hotels offer their guests, that are not in homestays and vacation rentals’ menus - especially the high-end ones, is image.

“Augmented services are available in properties here, such as steam bath or sauna, massage, gift shops, gym and specialty restaurants."

"Homestays and vacation rentals don't offer activities such as outdoor games including archery, swimming pool, pool table, table tennis and also indoor games including board games, playing cards, PlayStation games, among others. These activities are offered in properties like Lake Elementaita Mountain Lodge,” says Mr Muchangi.

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