This article is reprinted by permission from NerdWallet.
Airbnb has changed a lot since its humble couch-surfing beginnings in 2007. What started as a way for homeowners to earn extra income by renting out their spare bedrooms has become a multibillion-dollar, industry-disrupting giant.
The majority of travelers now rent entire residences rather than stay with hosts. Nights booked at private rooms made up only 16% of U.S. short-term rental bookings in May 2023, an all-time low, according to a report from AirDNA, a short-term rental analytics company.
And many of the hosts renting their homes are not mom-and-pop homeowners trying to earn extra income. They’re large management companies with multiple properties in their portfolios, some with dozens or even hundreds.
More than 30% of active listings in the U.S. are managed by hosts with 21 or more properties, according to data provided by AirDNA. That’s more than the 26% of listings managed by single-property hosts.
In other words, almost three in four Airbnb
ABNB,
listings are now managed by hosts with more than one property in their portfolio. This trend raises the question: Is staying with a mega-host good for travelers?
Read: Judge dismisses lawsuits by Airbnb and 3 hosts over New York City’s short-term rental rules
The effect on guest experience
Staying at someone’s guesthouse has its charms. If the hosts live nearby, they might offer local recommendations or provide other personalized touches. Yet many small-scale Airbnb hosts have little experience with hospitality, and few are available 24/7 to respond to customer service issues.
In principle, larger-scale management companies could offer more consistent and professional guest experiences. This comes at the expense of the human factor. Your management company probably won’t be able to tell you which bakery has the best biscuits.
To address this trade-off with data, AirDNA compared guest reviews for properties in Europe managed by hosts with many properties and those with fewer. They found a consistent trend: The larger the portfolio, the lower the average rating.
On the surface, this seems to suggest that properties managed by big companies offer a consistently worse experience. But Jamie Lane, chief economist at AirDNA, suspected something else was going on.
“There’s typically lower review scores when you’re reviewing a company rather than a person,” Lane says, suggesting that meeting and interacting with an individual rather than a management company leads guests to leave higher scores.
Also see: Airbnb has a new, old plan to eat into hotel business
To account for this, Lane’s team controlled for the ratings on the “location” portion of the overall guest review, which should not depend on the host’s portfolio size.
They found the same trend — lower scores across several ratings for larger portfolios — but it also revealed some interesting details. Larger hosts scored only slightly lower than single-property hosts on cleanliness ratings, though hosts with over 300 properties actually scored slightly higher than those with 100-299 units.
The more units a host owns, the lower the average communication rating. Lane suggests that this makes sense given the lack of personal interaction from larger-scale hosts.
“I will typically leave [a single-property host] a higher review than if I rented with Vacasa and was working with their customer service person in the Philippines.”
Do hosts with larger portfolios receive lower scores because their service is actually worse? Or because guests are kinder to smaller-scale hosts? That answer seems to be “both.”
Also read: 5 things I learned while traveling with my wife and adult children
What to do as a traveler
Choosing between a small-scale or large-scale Airbnb host depends on your preferences. If you want something more like a hotel, you might actually be more comfortable with a professional management company. If you care more about the personalized experience, consider looking for a host with only one or two properties.
Airbnb doesn’t make it very easy to search for properties based on the size of the manager’s portfolio, or even to see how many other properties a given host manages. So finding a property and host that matches your preferences requires you to click on individual properties you’re interested in and checking hosts’ profiles.
Plus: The best and worst days to fly for Labor Day travel
And keep in mind that many properties are managed by medium-size hosts who are real people (not corporations) with lots of experience. This could be the sweet spot for many travelers who are looking for high-quality service without sacrificing the human touch.
“There’s a broad trend of professionalization, but that doesn’t always mean [a property is] being run by larger companies,” Lane says. “There are lots of medium-size organizations that are using tools to make their operations much more professional.” Finally, don’t confuse “Superhosts,” an official Airbnb designation for hosts with consistently high reviews, for hosts with several properties. Superhosts can own a single property or several hundred, and are usually some of the most reliable hosts on the platform.
More From NerdWallet
Sam Kemmis writes for NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.
Read the full article here
