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Regulatory Risk

Former Supply Side Manager, Australia, NZ, Pacific at Airbnb

IP Interview
Published on May 30, 2020

Why is this interview interesting?

  • Potential regulatory risks on Airbnb and the impact of the company on local residential areas
Executive Bio

Darren Vincent

Former Supply Side Manager, Australia, NZ, Pacific at Airbnb

Darren was one of the first employees to join Airbnb in the APAC region. He joined the company in 2012 when the company opened the first office where he was responsible for opening new destinations in Australia, New Zealand and South East Asia. Darren was then promoted to lead recruiting and onboarding hosts where he led the supply side to grow from 5,000 to 200,000 hosts.

Interview Transcript

Can we discuss briefly the regulatory risk on Airbnb? Clearly, there’s been discussions with states and cities and authorities around Airbnb listing’s growth impacting housing supply and then pricing, as well. What’s your view potentially on that longer term regulatory risk?

It’s certainly a risk. First of all, I’m not an expert on some of the regulatory challenges that Airbnb faces. I think the difficulty there for me to comment as well is ultimately the regulations are going to exist whether it’s at a country, state, city, or even street level or building level regulatory environment. Which means that you’ve got a very complex mesh of different regulations to deal with. Ultimately, that’s certainly a risk but Airbnb’s business is so dispersed across many different cities and different markets that I think one issue, like an issue in New York, which is one that comes up a lot. That’s not going to sink the business in any case.

Airbnb’s business is across so many different markets that one situation isn’t going to affect the other’s too much. Ultimately, it is really about partnering with those cities, working with those cities and ensuring that the right regulatory environment exists for Airbnb and working with them closely. Airbnb was not just about flouting regulations or anything like that. They want to exist in a regulatory environment. However, ten years ago, none of this really existed. Local governments, state governments, federal governments didn’t really have to deal with it too much. Kind of didn’t really deal with it much for many years and they’re only having to deal with it now. I think it’s about partnering with them closely. In terms of risk, it’s certainly there. It’s difficult to comment when there are so many different situations to deal with.

Did you see longer-term rental properties moving to short-term because the rate is higher or because people could earn more money? If I’m a property owner, instead of me giving it out on a long lease, I would rather just rent it out on Airbnb throughout the year.

Yes, it’s certainly something that I heard many times over the years. I think ultimately, that’s going to be different market to market, it’s going to differ in different cities and even in different neighborhoods within those areas, as well. I think when a lot of people throw those kinds of claims out there, they don’t actually look too much into some of the data and some of the numbers and so on. There’s still a lot of effort and cost involved in running and managing an Airbnb. People don’t necessarily think of that. If they’re just thinking of looking at the high-level top-level dollars and so on and looking at a long-term versus the short-term, they often do certain math that doesn’t always work out. Sometimes they’ll be calculating on the basis of 100% occupancy and different things. It’s not always that simple, ultimately.

I would like to see an environment where if someone is looking to stay in a place or travel to a city, they’re not getting gouged $700 a night for an experience that’s not up to standard and so on, whether that’s a hotel, whether that’s an Airbnb, and would love to see an environment where people have the right options, but is also working closely with the community and the cities that they operate in to make sure that it’s not an issue. Certainly, there are issues and a lot of talk over the last couple of years of the things like over tourism and so on. I don’t think that’s uniquely an Airbnb issue, that’s existed in some areas way before Airbnb even came along. You look at places like Barcelona and so on. Even other cities and different places around the world have had the same challenges. When you’re a government body or regulatory body, they’ve got to be doing their work to look at the whole picture from that stuff, as well.

Do you think there could be a cap on prices or a risk that the host may have to pay more tax?

In my experience, I’ve probably heard just about every proposal out there in terms of managing Airbnb, whether that’s night cuts, whether that’s taxes. You can have taxes on the host side, you can have taxes on the guest side. Bed taxes, all those different things. The answer to that is, sure, yes, I think some of that it is probably going to happen because some of it has already happened. There are probably going to be other ones that happen as well that we haven’t really thought of. Each government is approaching it in different ways.

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