The Rise of Airbnb in San Antonio

I don’t recommend sleeping with strangers, but for Airbnb I make an exception.

The company, founded by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia in San Francisco in 2007, is expanding globally, and San Antonio is not immune to its charms. The premise of Airbnb sounds inherently dangerous: open your home for a fee to strangers you meet over the Internet. Give them a key. Pray they don’t steal everything you own, or worse. Then, when you decide to travel, make arrangements to stay in the home of someone else you’ve never met.

Yet Airbnb is approaching one million listings and more than 10 million users worldwide. It operates in more than 190 countries and is valued at $13 billion. Properties include castles and private islands, although more often they’re apartments and repurposed children’s rooms. In Texas, there are more than 1,000 listings in Austin, 900 in Houston, 730 in Dallas, and about 340 in San Antonio.

Like rideshare companies Uber and Lyft, and other “sharing economy” startups, Airbnb faces increased government regulation that may fundamentally alter or even threaten the way it operates. Regulations written for the hotel-motel industry, and competitive fear from the traditional hospitality industry, could crowd it out of the market just as the traditional taxi industry, threatened by innovation, has fought tooth and nail to vilify rideshare companies.

To better understand Airbnb, I signed up for service and traveled across town to rent a room for the evening.

Why Airbnb?

While long-term house rentals and hotels are established institutions, Airbnb is distinctly different from either. It fills a niche between the creepy – but free or cheap – Craigslist and Couchsurfing, the security and expense of a hotel, and the commitment of a long-term rental. It’s also a chance to live like the locals, something chain hotels can’t offer.

“The difference between a hotel and an Airbnb is the difference between a tourist and a traveler,” said Jennie Quinlan, who became one of the first Airbnb hosts in San Antonio when she opened up a room in her Alta Vista neighborhood home in June of 2010.

Founder Brian Chesky said Airbnb is more than just “renting space.”

“It’s about people and experiences,” he said. “We’re trying to bring the world together. You’re not getting a room, you’re getting a sense of belonging.”

One traveler said Airbnb is more affordable than hotels, but the real value is the connections she makes with her hosts.

“It’s a very personal experience, staying in someone’s home,” she said.

Airbnb appeals to travelers who want to experience a city more authentically, like a local, instead of those seeking the customary tourist attractions. The company’s website offers a vast array of options. Listings vary in cost, design, location, and amenities. Rentals often provide greater flexibility for guests and for hosts, who can manage their own rental times and dates, and have complete control over who stays with them.

One host, who just opened up his refurbished garage apartment in February and asked not to be identified, said he likes that he can still use the space as a guest room for friends when he needs it.

Airbnb’s website does much to distinguish itself from its sketchier home-sharing counterparts, and to negate initial feelings of trepidation at the thought of staying with strangers. The company’s rhetoric is compelling — “belong anywhere #onelessstranger”— and its design is sophisticated. Airbnb offers free professional photography to hosts.

The impression is backed by security measures: guests and hosts must verify their e-mail addresses, telephone numbers, and provide an image of a government-issued ID, such as a driver’s license, or link to social media (Facebook, LinkedIn, or Google+). If you chose to confirm your identity via social media, you hand over access to your basic profile information (name, home town) and your friend list. When you book a rental, your credit card information is required. There are no cash transactions.

All together, this makes guests and hosts feel more secure with one another, and more vulnerable, as personal information, including name, address, phone number, e-mail, driver’s license, and list of friends and acquaintances, is now being stored in one place. It’s better than staying with a stranger you meet on Craigslist, but Airbnb’s process is not without loopholes.

The site’s review system, where guests and hosts go through a multi-step process to rate and comment on their experiences, provides the most security. Statistically, you’re in good hands. Of six million guests staying in 550,000 listings in 2013, there were a mere 1,700 reports of property damage. Airbnb employs more than 600 people in its always-available Trust and Safety Department. Further, Airbnb now insures for up to $1 million in the event of theft or damage, following a poorly handled incident in San Francisco in 2011.

How It Works

A glance at the Airbnb San Antonio listings reveals mostly guesthouses, garage apartments, and what appear to be guest bedrooms or former children’s rooms in the abodes of Empty Nesters looking to make a little extra income. When searching properties, you can specify dates, room type, and price range. Search results yield an image of the property, a picture of the host, and titles such as “charming cottage” or “Zen treehouse.” Average San Antonio rates fall between $75-125 a night. Further property information includes details about the space, amenities, additional fees, and “House Rules,” as well as the ratings and reviews that are so central to Airbnb’s successful functioning.

Décor is mostly unremarkable, but occasionally stunning. The restored garage apartment in Southtown that I visited is finished with salvaged wood and pressed tin walls, a full kitchen, and a claw foot tub. At another venue, Dan and Kitt Diaz, who rent out a fully refurbished historic home near the Alamodome, fitted it with antiques and family art. Yet another Southtown loft where I spent the night was spacious and tastefully decorated, with a beautiful back porch that guests were invited to use.

Once potential guests find a property they’re interested in renting, they message potential hosts through Airbnb’s private messaging service to request a booking. Hosts have complete control over whom they accept and reject. Juan and Barbara Garcia, who hosted for a year and a half in Dignowity Hill on the city’s near-Eastside, said they only turned down two requests the entire time. Quinlan said she accepts about half of her requests.

All hosts said they pay particular attention to the reason for the visit, as well as the general dialogue, reviews, images, and personal descriptions. Many took further steps, such as Googling their applicants, or even calling conference centers to confirm the guest was actually attending.

Travelers said they select rentals based on the aesthetics and location of the space, the information provided by the host, and the reviews. Price matters, too.

As to the sort of people attracted to San Antonio, there is no standard one-size-fits-all “type.” Hosts reported that convention attendees, academics, and Spurs fans were common, but so were foreign travelers, artists, weekenders from Austin, and staycationers from within San Antonio. A few hosts expressed a desire to avoid Spring Breakers, but otherwise said the broad variety of guests was one of more appealing aspects of Airbnb. Several said they made good friends in the process.

“The world becomes very small,” Quinlan said.

Beyond the basics (a bed), amenities vary from property to property. Richter, a San Antonio local who first started staying in Airbnbs when a hotel lost her reservation, said the more attentive hosts she’s stayed with have provided water and snacks. One San Antonio host always leaves a bottle of wine, and pays attention to guest’s requests for larger things, which have included a microwave and more curtains.

My host, who asked not to be named because of concerns about increasing regulations, provided earplugs and eyemasks, and left chocolates on the pillows. The Diaz family  thinkising about putting in an organic garden and chicken coop on the property, providing guests with fresh produce and eggs.

The Garcias said they were certain to always meet their guests and check them out (no matter the hour). They also provided libations, snacks, and local knowledge—they were once asked where to go to “ride a horse, eat a Texas steak, and go country dancing”—and sometimes gave their guests tours and rides. Indeed, their personal commitment was the reason they stopping doing Airbnb and reverted to traditional rentals — it simply took up too much time.

While some guests arrive by car, many walk or bike. Quinlan rents her bike out to visitors. Hosts who live downtown and in Southtown said guests love using B-cycle.

Staying at an Airbnb is a bit like staying with a very attentive acquaintance, much more akin to being a guest in a home than a hotel. Travelers I spoke with said the greatest challenge with Airbnb is defining your role as a guest. The boundaries are not always clearly delineated. Sometimes minor mishaps ensue. One young traveler relayed an experience in Europe where, unable to figure out how to work the shower, she accidentally flooded her host’s bathroom. Another traveler admitted to looking around her host’s apartment, including into her closet.

The intimacy of staying with a stranger is both jarring and sweet. I found myself tiptoeing around at night and early in the morning, and I gathered up all the sheets and towels before departing.

“The changeover is a pain,” one host said, a sentiment echoed by others.

It seems to be the only thing hosts don’t like about the process. That said, Airbnb-ers seem on the whole a neat bunch – though you can easily imagine that there are host and guests that are less than polite. The hosts I spoke with said guests always leave the places clean, usually gathering up the towels and linens, and sometimes even offering to sweep. The Garcias said all their guests were exemplary, with the exception of a few who required extra cleaning. The Diazs also said their guests have all been pleasant and respectful.

As to the logistics, my host gave me careful instructions for how to get to her house, where to park, and where to enter the property. I had access to a coded lockbox with a key. Inside the room, there was a letter that included her phone number and e-mail.

What I found most charming were the little notes that indicated the various quirks inevitable in an historic home. There were guidebooks, menus, and cards for local sites, restaurants, and businesses. There were even stamped postcards for guests to write and send.

Following the stay, the ratings and review system helps to ensure safety and define expectations for future guests and hosts alike, both of whom are invited to rate the other once the stay is over. You can’t see the other person’s review until you submit your own. Certain parts of your review are visible to all users, others only to your host, and others only to Airbnb, so you have various opportunities to give an honest assessment of the situation.

As for payment, all monetary transactions pass through the Airbnb site, which protects cancellation fees, and facilitates security deposits and cleaning fees. The company recommends nightly rates based on location, size, etcetera, but hosts ultimately set their own rate.

Airbnb earns between 6-12% commission from the guest payment, and receives 3% of what the host is paid. The commission still allows for a profit margin, which means prices can stay low. That said, a warning: on a room listed for $85 a night, my final bill came out to $134. There was an additional $35 cleaning fee, which wouldn’t look so startling if it was spread out over a longer stay, and a $14 “Airbnb Service Fee.”

At the end of the year, Airbnb issues a 1099 Tax Form to hosts, which qualifies earnings as “miscellaneous income.” Of the hosts I spoke with, they were variously using their earnings to go toward utility bills, home improvements, and property taxes they couldn’t otherwise afford. No one relied on Airbnb as their primary source of income, or indeed treated it as a source of disposable income at all. Rather, renting out rooms was a way to maintain properties that may otherwise have been prohibitively expensive.

In the rare case where a full home, not the host’s primary residence, was rented out, it was usually for a limited time until a decision was made on what do with the property. For instance, the Garcias rented out a full house they owned via Airbnb before deciding to revert to a traditional annual lease arrangement. The Diazes, who remodel houses professionally, said Airbnb provided a financially viable way to hold on to a property until the time was right to sell.

However, like Uber and Lyft, Airbnb’s popularity has not escaped the notice of government officials and the hospitality industry. Increasing regulations may limit its availability. The company which aspires to help its users “belong anywhere” may soon find itself challenged in San Antonio.

Stay tuned to the Rivard Report tomorrow for the second part of this story, exploring regulation of the sharing economy.

*Featured/top image: Jennie Quinlan was one of the first Airbnb hosts in San Antonio when she opened up a room in Alta Vista. Photo by Gretchen Greer. 

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