As a frugal consumer with a penchant for good value and a distaste for wasting money (a principle I acquired after I saw thousands of bank account details while working as a teller at 16), Airbnb‘s 14-percent service fees for guests have long had a way of rubbing me the wrong way.
Between the cleaning fee, which often costs around $200, its 14-percent service fee, and then the fact that you pay taxes on said fees, costs quickly add up. For example, a rental priced at just $200 per night totals around $2,000 for one week or about $285 per night.
Feeling burnt out from burning money on Airbnb bookings — and after noticing that listings were increasingly becoming dominated by Airbnb management companies — I turned to my old pal, confidant, and front-line informant, Google.
There, I searched for the Airbnb management company that had listed the property I wanted to book on Airbnb. Lo and behold, there it was, as was the ability to book the same property directly, without the exorbitant cleaning fee and Airbnb service fees. The grand total was $400 less.
I tried the simple strategy again and again, and it worked. Again and again. In the past year alone, I’ve collectively saved thousands on the exact same Airbnb bookings for the exact same dates with this simple method.
At the root of this simple method is a common mistake amongst growing startups: assuming popularity equates to loyalty and failing to consider that the stakeholders (in this case, management companies, hosts, and guests) could actually cut you out of the deal.
Popularity does not equal loyalty
It is often assumed that popularity is synonymous with customer loyalty. But oftentimes what is assumed to be loyalty is simply popularity. And of course, popularity can be quite fleeting.
In a competitive market, odds are there will always be new competitors getting ready to take a stab at a slice of your customer base. When a customer base is based on popularity as opposed to loyalty, customers given alternative options are likely to pursue them.
With Airbnb, it’s not just that management companies are becoming more common. With the help of beginner-friendly (and code-free) website builders such as Squarespace and its Lodgify integration, nearly any host can build a website that automatically syncs bookings across travel booking channels, such as Airbnb, while also accepting direct bookings. When direct bookings increase a host’s profit margin and decrease a guest’s cost, both guest and host benefit.
As competition strengthens, so should your value proposition
There’s an oversight that many startups fall prey to: Once they gain a customer base, they do little to retain it. In other words, as a business grows, so does its competition and so should its value proposition.
After Airbnb shifted power (and profits) into the hands of individual property owners and out of the pockets of multinational hotel chains, companies — whether that’s website builders or management services — gave owners a way to cut Airbnb from the equation. While there will always be others lining up for a piece of your market share, businesses that give customers a good value proposition will end up with a loyal customer base that stays because they want to, not because they haven’t yet discovered a way leave.
While your customers are your biggest opportunity, there are instances where they may also be your biggest threat — especially in a two-sided marketplace where the business is the middleman, connecting buyers and sellers (or hosts and guests). With costs disproportionate to value and both parties seeking ways to hold onto their money, the middleman is the first to go.
