As property owners continue to cash in on the Airbnb gold rush, a handful of L.A. businesses are setting up shop to serve these prospectors.
Instead of picks and shovels, they’re selling data and fresh towels – and keeping an eye on looming regulations that could shut down the whole homesharing ecosystem.
Homeowners and real estate entrepreneurs alike have found they can make good money by renting out rooms or whole properties through Airbnb and similar platforms. But they’ve also found that being small-scale hoteliers comes with lots of work – from managing bookings to changing sheets. Now, businesses are cropping up as entrepreneurs hope to fill demand for those services.
“These companies have emerged because there’s a gap in what Airbnb provides,” said Scott Shatford, founder of Santa Monica’s Airdna, which provides market research for Airbnb landlords. “The platform currently doesn’t do a good job of assisting the hosts to price their listings dynamically or manage the properties.”
Airbnb, based in San Francisco, launched in 2008 and has grown rapidly. Through its app and website, it now lists more than 1 million short-term rentals worldwide – ranging from couches to entire homes – with more than 7,000 in Los Angeles.
While the market is large, and still growing, it also is rife with risk. Santa Monica and West Hollywood have begun cracking down on short-term rentals after protests from affordable housing advocates, and leaders in the city of Los Angeles are discussing ways to rein in Airbnb and similar services such as HomeAway, based in Austin, Texas.
The regulatory momentum keeps these new firms on edge since their success is closely tied to that of the homesharing companies. They argue a more limited rental market would stymie growth and possibly sink their businesses.
Bedspreads to spreadsheets
The services offered by these startups range from providing market analytics to more hands-on work such as cleaning and guest check-in. Airdna’s Shatford said at least half of the Airbnb hosts in Los Angeles outsource some or all of these tasks.
His company, founded in June of last year, combs through thousands of websites and listings to measure an Airbnb listing’s revenue, occupancy rate and other performance indicators.
Much of the information on Airdna.com is free, but hosts and other users can pay about $50 for more comprehensive reports that break down the performance of listings in a given neighborhood or even that of a competitor, giving them a better idea of whether they are under- or overpricing their own listings.
“Everybody’s looking for some data to price their listings better, support their guests better or decide where to open up a new property on Airbnb,” Shatford said.
Venice’s HostWise, also founded last summer, provides housekeeping services and supplies fresh linens, towels and toiletries to prepare clients’ homes for guests. Co-founder and Chief Executive Matt Lucido said the firm services about 5 percent of Airbnb hosts in Los Angeles and plans to expand to San Francisco.
Another startup, Kerry Hirschberg’s Check-in LA, has essentially taken over the roles of a hotel front desk and concierge. Hirschberg and three employees manage guests’ stays from check in to check out, greeting guests when they arrive and offering recommendations for local attractions. The company, which plans to expand to Palm Springs by the end of the year, also hires cleaners and gardeners to take care of properties.
Regulation coming
As these businesses grow, their owners are keeping an eye on looming regulation.
In May, Santa Monica banned hosts from renting out entire homes for less than 30 days, effectively banning a majority of Airbnb listings, which cater to stays of a few nights. Hosts can only rent parts of their homes where they live full time – a guest room, for instance – and must apply for a city license.
Only a few hundred of the roughly 1,700 Santa Monica properties listed on Airbnb and other short-term rental sites meet those standards, said Salvador Valles, the city’s assistant director for planning and community development.
Hirschberg said he’s already lost a client in Santa Monica and no longer does business in West Hollywood, which has rules similar to Santa Monica’s.
HostWise’s Lucido, a board member of rental industry trade association L.A. Short Term Rental Alliance, said he has yet to lose business in Santa Monica due to the ordinance, but knows it is a possibility.
“If they are successful in reducing the number of Santa Monica listings, there will certainly be less customers for us,” Lucido said.
Now, all eyes are on the city of Los Angeles. Some residents complain that a number of homesharing units are frequently rented out, transforming much needed homes into de facto hotels. City Council members Mike Bonin and Herb Wesson have proposed a plan that would allow hosts to rent all or part of a home even when they’re out of town, but ban listings without a full-time resident.
While that has business owners worried, Shatford said he thinks Airbnb and other short-term rental platforms are too well established to be killed off by regulation. Indeed, some property owners in Santa Monica are defying city rules, continuing to list whole units while regulators scramble to rein them in.
With cities struggling to enforce their rules, Shatford sees a more capable opponent for his and other Airbnb-dependent businesses: Airbnb itself.
The biggest risk, he thinks, is Airbnb might become more than a listings platform and start offering the data or management services that startups are providing.
“If they decide to build out these assets for their company, they’ll squash us like little bugs,” he said.