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Investors reap the rewards as Airbnb disrupts hotel industry

Building a hotel is expensive as compared to getting a house and registering it as an Airbnb

In Summary

• There are about 4,500 facilities in Kenya, attracting local and foreign tourists

• The platform is designed to benefit both client (lower charges) and host (less capital)

A screenshot of Airbnb website of Kwale homes and apartments
A screenshot of Airbnb website of Kwale homes and apartments
Image: COURTESY

In the eight months Maina Azimio has been in the Airbnb business, he has seen tremendous returns. He has three facilities registered under the platform, attracting mainly foreigners from Brazil and America. 

Maina says the advantage with Airbnb is that as the host, you can set the standards of how you operate your facility, as opposed to how hotels have their standards set by a regulator or board. 

“My target clientele are those who go for furnished apartments and those sensitive to health issues,” he said.

 
 

As a wellness trainer, he realised hotels do not offer exercises on mental, physical and emotional wellness, thus he added it as an experience on his Airbnb facilities.

Every third Saturday of the month, he takes his clients for hikes.

“This month, I will be taking my clients for a hike at Mt Longonot so they can have an experience apart from just having an accommodation,” he said.

There has been a rise in people registering their commercial properties under Airbnb. There are about 4,500 facilities in Kenya, which are attracting travellers from foreign countries and local tourists.

Americans are the biggest clients of this platform since they are the pioneers and prefer getting reservations for apartments or single rooms that are cheaper than what hotels charge.

Airbnb was born in America in 2008 by architectural designers, who offered accommodation to travellers who were looking for a place to stay. It started gaining popularity in 1996 with hardly 1,000 properties listed under the platform.

Its theme is 'Belong Anywhere', alluding to its more homely experience compared to hotels. 

 

HOW IT WORKS

In Kenya, Nairobi has the highest number of properties listed on Airbnb with 2,113 facilities, followed by the Coastal region with 1,091 facilities.

 

This platform benefits both client and host. Guests have a wide selection of what they want. They can choose from a single room, suite, apartments or an entire house. They can search for what fits their profile by date and location, price, type of property, amenities and language of the host. 

For the host, it offers free listing — you do not have to pay to list a property. The listings include written descriptions, photographs with captions and user profile, where potential guests can get to know a bit about the host. The host can also set their own price. It is up to them to decide whether they are going to charge per day, week or month. 

Maina charges an average of Sh10,000 on the higher end and Sh2,500 on the lower side, making it affordable for those looking to seek accommodation and enjoy the experience he offers.  

Airbnb verifies personal profiles and listings, maintaining a smart messaging system so the host and guests can communicate with certainty and manage a trusted platform to collect and transfer payments.

The platform holds the guest’s payment for 24 hours after check-in before releasing the funds to the host. That way, if the client does not like what they find, they can choose another facility within the platform.

The Host Guarantee Programme, which is eligible in some countries, provides for protection of up to $1 million (Sh100 million) in damages to cover property in the rare event of guest damage.

“I have had a challenge with guests who sometimes travel back to their countries without paying for extras,” Maina said.

He said he once had a case where an American guest returned to her country without paying extra payments of Sh35,000 ($350).

Other challenges he has faced are having to deal with guests who smoke yet they are aware of the sign that has been placed, restricting them from smoking in the facility. Some who are sharing an apartment are sometimes scantily dressed, leading to complaints from other occupants.   

Jumuia Beach Resort, Mtwapa. Its general manager Kimani Karanji admits Airbnb is taking customers from them.
Jumuia Beach Resort, Mtwapa. Its general manager Kimani Karanji admits Airbnb is taking customers from them.
Image: COURTESY

COMPETING WITH HOTELS

As Airbnb is tapping into the market of travellers, it is bringing competition to the hotel industry.

Jumuia Resort general manager Kimani Karanji said Airbnb is indeed taking customers from them, as people are capitalising on commercial properties and transforming them into Airbnb. 

He said it is giving them a run for their money, mostly in the cities Nairobi, Kisumu and Mombasa, as the platform is easier to access than those of the hotels.

Tourism Ministry Secretary Said Athman said this booking platform is an advantage to the tourism sector in terms of accommodation, by providing more bed capacity than what is offered in hotels.

He said it helps to cater for the wasted space and that building a hotel is expensive as compared to getting a house and registering it as an Airbnb.

“We have people who have big houses, like people from rural areas and remote places, which are sometimes unoccupied. They can register on this platform through the ministry,” he said.

Apart from it being a booking platform providing accommodation, it also provides opportunities for young people to invest in.

Athman said it will open up opportunities for the youth as the entry levels are lower. He was saddened that youths are not taking the opportunity to create jobs from it.

He said in other countries like South Africa where he visited, he was amazed at how young people are showing tourists around the town and city, taking them to historical places and parks.  

He wished he could get young people in remote places in Kenya showing him around and sharing the history of those regions when he books an Airbnb there.

Tourists arrive at Diani airstrip
Tourists arrive at Diani airstrip
Image: FILE

NO GUIDELINES YET

In the recent past, you would go through a travel agent to book a hotel or apartment, but with this platform, you can book from anywhere in the world.

The Ministry of Tourism has not set guidelines yet on the booking platforms as they are still negotiating with the Airbnb owners, and now is when they are picking up in the Kenyan market.

“We are yet to set the guidelines but are on the road to having them. We want to allow them to penetrate the market first. We do not want to scare them away,” the Tourism Secretary said.

He said hotels need to up their game as they need to move from the mindset of their business premises and focus on the customers.

Kimani said hotels should take advantage of the online space and compete with Airbnb. They can improve on the areas where it is taking advantage based on the clients.

“We can create a platform than can counteract the Airbnb platform and have a personalised profile of the client so we can give them options of the facilities we have that fit their profile,” he said.

He added that hotels need to focus on the needs of the clients more than the facility by offering services like housekeeping and room service on a daily basis.  

With the 5G network rolling out in Kenya soon, Kimani said hotels need to have an online presence to reach out to the young generation, which is aged between 18 and 35 years, as youth are more attached to their devices and social media sites.

Kimani added that having authentic information will be an advantage, so they need to research to avoid negative publicity, which is part of the challenge they face.

Edited by T Jalio