Airbnb derived its name from the notion of "home-sharing", providing travellers prepared to rough it with an air mattress and perhaps even some coffee and croissants in the morning. When it was set up in 2008, nobody – not even its entrepreneurial co-founder Brian Chesky – could have imagined that the company would be valued at more than $100 billion just 12 years later. But that's what happened last week when shares in the San Francisco-based "disruptor" opened on the Nasdaq at $146 – more than double the price quoted in Airbnb's initial public offering (IPO).
It didn't seem to matter to investors that so much of the company's business model is based on facilitating property owners worldwide to rent "entire homes" to tourists, raking in a percentage of the takings, and that this is often done in defiance of local laws and regulations. Efforts made by "Share Better" groups to alert the US Securities and Exchange Commission to this defect within Airbnb's business as a "home rental platform" and the measures being taken in many countries to curb it also counted for nothing in the end.
Despite the current pandemic, Chesky’s gamble paid off handsomely, enriching him to the tune of $11 billion. Indeed, Covid-19 even turned out to be an ally, as more travellers opted to book homes rather than hotels after lockdowns eased, helping Airbnb to post a profit for the third quarter of this year. Yet nearly all of the homes being rented out by its four million “hosts” in some 100,000 cities around the world were places where people could live – stripping out the housing stock for profit at the expense of local communities.
In pre-pandemic Dublin, up to 5,000 "entire homes" were being short-let via Airbnb. Investigations by Dublin City Council of 900 of these cases, under planning regulations introduced in July 2019, have resulted in a majority returning to the long-term rental market. But more needs to be done, by imposing an obligation on Airbnb to advertise only properties that have planning permission for short-letting or face substantial fines if they don't.