Abstract
Airbnb has been suffering from many troubles for a long period of time. A few problems are common in China, France, and the USA. Airbnb’s ad campaigns are creating problems for the company itself. There are many platforms provided by Airbnb that allow individuals to offer their apartments, houses, and rooms to tourists. This type of business is not illegal, but there are inevitable issues that can become an obstacle for Airbnb, such as tax issues; many tourists or visitors have to pay a tourist or hotel tax when they rent any hotel room or apartment. Similarly, every country has its local housing laws and regulations, which have to be followed to avoid unnecessary conflicts. Airbnb is continually changing its political strategies just to save the economy, and international strategies are not going in favor of Airbnb.
Ethics And Business
The whole hotel industry became an opponent of Airbnb because Airbnb helps tourists or visitors find affordable accommodation in their desired locations without mentioning the cost of hotels and other costs; therefore, while paying bills, visitors face many problems. Hotels are continually threatening the business of Airbnb and its future. In April, an economist reported that if the immoral acts of Airbnb continue to grow at the same rate, then by 2016 its 10% share with hotels will be taken out.
Airbnb’s Legal Problems In The US
In New York, it is already in the midst of a prolonged legal debate with the attorney general, while experts in San Francisco, Malibu, New Orleans, and other US cities are also increasing shutdowns. In France, where Airbnb has been partly blamed for increasing rents, city authorities have created another housing law prohibiting standard rentals here. Europe is now the highest priority on the list, where Airbnb has recently been fined €30,000 for violating local tourism laws, and the association is likewise under attack in a growing number of other urban areas.
Airbnb represents its business as an issue of discussion. Much as it advances “living like a neighborhood” in the cities where it profits, the organization says it ultimately has no obligation regarding what occurs on the ground, much like a site with comments.
If Airbnb is viable, and a few authorities think Airbnb has a better shot, the CDA is planning to free the association of obligation concerning the influence of Airbnb’s business, and the SCA is planning to shield urban areas from discovering hosts and likewise hold Airbnb responsible. Governments throughout the United States would be vulnerable to controlling the amount of these company postings or restricting the guest corporations that they bring. It’s a solid mixture of offensive driving forces (Time.com, 2017).
Airbnb continues displaying its company as low-impact, consisting of normal hosts sporadically renting their specific apartments. A current Airbnb account of its company in Lisbon states that “various postings on Airbnb in Lisbon are neighborhood inhabitants’ family,” reassuring users that “In Lisbon, seventy-two percent of hosts in Airbnb have only a single posting.” But to be honest and reasonable with reality, my openly accumulated data set demonstrates that the 28% of hosts with more than one posting, who can be seen as “business,” account for 66% of the association’s business in Lisbon.
Also, while Airbnb claims that “seventy percent of guests of Airbnb stay outside spots instead of the regular vacationer in Lisbon,” my study demonstrates that the larger part of tourism occurs inside the two main areas of Santa Maria Maior and Misericórdia, an area of just around 6 square kilometers. In May 2015, the number of postings in the little town of half a million increased from 5,500 to more than 10,000 today; a primary influence is certain. João Seixas, a teacher of geography at the New University of Lisbon, and his colleagues are “particularly stressed over what is rapidly occurring to the recorded point of convergence of our brilliant city and town. Since the last three years, around one-quarter or even 33% of the hotel has changed its stock limit, generally toward financial investments and rentals with a short span of time.”
Sharing a home is a long-time trend in America. For a long time, homeowners have let other people live in their homes instead of hotels, sometimes for house chores and sometimes for money. At this time, Airbnb is playing a role as a sharing-economy technology that has become a link between travelers and home renters. Such online platforms help tourists select a living place of their own choice, whether it’s a hotel or someone’s home. But Airbnb doesn’t mention all the expenditures a tourist or renter has to pay. Therefore, this issue is becoming very prominent in different cities in America, for example, Chicago, New York, and San Francisco.
Airbnb Faces Legal Challenges In China
Airbnb may have stumbled somewhat a week ago when it revealed its new strategy for conquering the Chinese market, which included doubling its investment there and an important new name: Abiding. This is where the issue lies. The name isn’t easy to say for Mandarin speakers, and many Chinese netizens have responded negatively. China has a unique culture compared to other nations in the world. A cultural study before implementing a business is a must-do for any organization. Cultural misinterpretation could lead to some serious issues.
As one Weibo user put it: “Airbnb has given itself a foolish Chinese name and even shot an MV (music video) for it. It is much the same as an outsider attempting to speak poor Chinese.” However, notwithstanding the name issue, Airbnb may be better positioned than different US tech organizations that have tried and failed to enter China, most notably Uber. As an issue of fundamental significance, there is a larger size and improvement potential in the Chinese travel market. In 2015, vacationing totaled $500 billion and is expected to increase significantly to $1.2 trillion, according to a China National Tourism Administration report.
A large portion of this travel is occurring locally as well. As per the report, the number of trips taken inside China came to an amazing 4.1 billion in 2015, with an average annual growth of 10.2%.
The home-sharing business sector in China is still in its earliest stages. Thus, despite the fact that Airbnb has only 80,000 postings there up until this point, its domestic rivals are not that far ahead. Xiaozhu, its direct equivalent, has more than 100,000 postings, while Tujia, which is more of a vacation rental site and regulates the administration of its properties, claims to have 450,000 postings. Recently, Airbnb has faced many problems in the Chinese market. The company is facing challenges, and authorities are continually seeking clear answers regarding population management, taxes, and other aspects of the client-to-client business model.
It also has to face problems because of its different background. Comparatively, Airbnb faces many difficulties in adapting to the Chinese environment. It is becoming quite difficult for Airbnb to establish friendly relations with authorities and the people of China because it’s a foreign internet company. And these challenges are not limited to one country only; Airbnb has to suffer these problems even in the international market. But the main benefit of these hurdles is the experience Airbnb has gained from international markets, which might help it adapt to the Chinese environment. Airbnb has to work very hard just to gain the trust of its users and regulatory authorities in the Chinese market. Negative reviews of Airbnb in the international market have become another hurdle to its success. Its success in the Chinese market depends on collaboration with and understanding of the Chinese people and their demands and needs.
Airbnb Is Under Continuous Crackdown In Paris
The French government has inspected homes and apartments in the capital to crack down on Airbnb because some hosts are not following the country’s rules and regulations. Recently, officials have carried out raids on apartments in the first and sixth arrondissements because both these areas are attractive for tourism, and tourists usually stay in these places. The main reason for these raids was to discover home renters whose attempts were to become rich by renting out their apartments and flats for up to 120 days, which is against their country’s rules. Airbnb has faced these problems by not complying with local government regulations, which is a very important factor to consider when expanding a business to a different country. Officials didn’t target those who rent their homes for one or two weeks when they go on visits or vacations.
It was stated by the town hall’s housing chief that they wanted to discover those professionals who violate rules and rent their flats for the whole year or those who buy a house or apartment merely for the purpose of converting it into a tourist place. They found many individuals who violate the rules of the country and rent out their homes without following any rules. Recently, a survey was conducted, and it was found that on Airbnb, forty-four percent of home renters are available permanently. Along with those landlords, Airbnb also had to pay a hefty fine. Individuals who rent their homes for more than three weeks have to pay fines of up to €25,000, but it is still not enough according to authorities; however, they have decided to increase this amount to around €100,000.
People in Paris are showing their frustration with the constant pace of Airbnb residents carrying baggage up the stairs of their apartment buildings. France Blue said that we are getting more complaints from residents because of Airbnb. Paris is already a very expensive market, and now Airbnb is adding these housing challenges for tourists, which makes it difficult for a tourist to enjoy their tour. Airbnb was launched in 2008, and in the starting period, it had some forty million users, but with the passage of time, its quality has decreased, and the whole hotel industry is becoming a rival because it violates tax laws and country laws.
Airbnb recently agreed to remit tourist tax to France and Paris from every booking it receives. A study was conducted in November, and it was found that Paris is the world’s biggest market for Airbnb. It has 3.9 million users using the service of Airbnb; thus, losing the Paris market would be the biggest loss for Airbnb. The Paris government made a new law in June that says whoever rents out flats in Paris using services like Airbnb will have to get a registration number. The main reason behind this law was to make sure that no one rents out their property for more than a 120-day limit. But there is also good news for homeowners in Paris: the rates of local tax will remain the same for everyone. Airbnb is under continued pressure from different cities, almost 17 cities, and Paris is one of them. It is trying to control its rentals according to local rules. On the Airbnb website, Paris offers more than 60,000 homes. Hence, it is clear that the business of Airbnb is booming in France’s capital. It’s one of the world’s biggest tourist markets, and Airbnb can’t lose it at any cost.
Political Economy
Not all countries are against Airbnb; their reaction to Airbnb is positive to some extent. This February, Amsterdam passed an Airbnb-friendly law, keeping the sharing economy of the city in mind. Amsterdam became the first city to pass Airbnb-related legislation. This city allows natives to offer their homes and apartments to four visitors at a time for up to two months. Nevertheless, all types of taxes, such as tourist tax, should be paid by an owner who rents out his home or apartment. The founders of Airbnb and their expert economists are expanding their business in such cities, which can give them maximum benefits (SmarterTravel, 2017).
Many homeowners think they could get in trouble for renting their homes through Airbnb, but it depends on local laws. Airbnb doesn’t always follow local laws, regulations, and rules of countries, which is why it has to face such problems. Airbnb puts homeowners in trouble because it creates a risk of punishment from government authorities. Recently, it was found that in San Francisco, it is entirely banned to rent out homes without an expensive permit, and those who violate this rule have to face heavy punishment and penalties from high authorities. The study has found similar cases in New York; authorities there also do not allow homeowners to rent out their property by using Airbnb without legal permission.
Penn Schoen Berland, a partner of Burson Marsteller, conducted a timed poll on the gig economy and realized that fifty-six percent of people who share their homes and make money say Airbnb is an entirely different thing from vacation and hotel rentals and should not be subject to the same regulations. Those who rent out their homes and apartments were more positive about their financial condition than the general public. Sixty-three percent of people believe that their financial condition will get better in the coming year. San Francisco’s attempts to abandon Airbnb were defeated by fifty-five percent to forty-five percent. Lehane states of this defeat in San Francisco, “Coming out of that, the light bulb went on over our head.” A lot of people are inspired and have a self-interest in their economy. Thus, a huge community supports Airbnb because of its political economy strategies and the benefits it gives to home renters (Miller, 2017).
Response Of Airbnb To All These Challenges
Keeping the need for change in mind, Airbnb updated the organization’s terms and conditions to make its customers more conscious of local charges and laws, placing emphasis on the host’s obligation to comply with them. When problems arise, most hosts have not been charging their guests lodging taxes or submitting them to the town. To address this, in a few areas, Airbnb has begun arranging to collect hotel taxes on the host’s behalf, which means costs in a few places will increase. The company has focused on its international strategy to view cultural values more closely, along with the regulations of the local country. Beginning on July 1, the association has been adding an amount of around 11.5% as a hotel tax for all reservations made in Oregon and Portland, and it has likewise begun gathering charges in San Francisco. Likewise, the association is attempting to arrange practically the same plan in New York (Harvard Business Review, 2017).
Airbnb is planning to take San Francisco to court and claims that the city is not following laws and that the violation is very open. Section 230 of the 1996 Communications Decency Act (CDA) says that the owner of a website is not responsible for content provided by its users on the site. This law protects newspapers, bloggers, and sites like YouTube, Yelp, and Craigslist. The 1986 Stored Communications Act provided that before the government is entitled to information about consumers of a web service, it must have a particular subpoena. Therefore, according to its international strategy and under these laws, Airbnb is claiming protection (Anon, 2017). Airbnb planned to make home-sharing groups; these groups are made to push the company’s mission to the government. In 2008, it was founded by three friends just to make money and to become one of the best travel brands in the world. These strategies help Airbnb regain its lost reputation on three continents.
However, all would no longer be smooth sailing for Airbnb. The business of Airbnb is booming currently in Europe, where Barcelona, Berlin, and, to a lesser extent, Paris are showing a fresh decisiveness in adapting to the boom in vacation rentals. In the meantime, the leaders of 10 major markets around the world are starting an effort to create a common reaction to the problems that Airbnb brings. Such patterns are very well planned. Without them, accurate tourism reports might be sold at the expense of the people who matter most: local residents.
However, some travelers can “remain there” before Airbnb acknowledges that it has developed a mass-tourism vehicle and that its clients are travelers; like various components of the tourism industry, Airbnb has become a double-edged sword. Guests bring new stories and money; however, as their numbers grow, they erode the very atmosphere in which they stay and undermine the livability of the town for residents (Fox Business, 2017).
References
Miller, R., (2017, July 22). Airbnb and Uber face some harsh realities. Retrieved from https://techcrunch.com/2014/10/08/Airbnb-and-uber-face-some-harsh-realities/
The Verge, (2017, July 23). Airbnb’s worst problems are confirmed by its data. Retrieved from https://www.theverge.com/2015/12/4/9849242/Airbnb-data-new-york-affordable-housing-illegal-hotels
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