SAN FRANCISCO—Airbnb co-founder, Brian Chesky, addressed ULI Fall Meeting attendees as part of a conversation with Constance Moore, president and CEO of BRE Properties, ULI San Francisco board member and the sponsorship committee chair for the 2015 Fall Meeting. Chesky described his company's model of hospitality as complementary, rather than a threat, to the traditional hotel industry since Airbnb's global network of hosts can alleviate consumer demand that cannot always be met during periods of peak occupancy.
Citing the example of the 2014 FIFA World Cup in Brazil and the fans who flooded its cities, Chesky said that Airbnb's inventory of hosts and private homes can help hotels and cities contend with the challenge of having an adequate supply of rooms for tourists and business travelers to stay in during major events.
"We allow cities to swell for large events," Chesky said. "For us to win, no one in hospitality has to lose."
Chesky shared the improbable story of Airbnb's creation and of how he—the son of two social workers who simply wanted him to get a job with health insurance—became a technology entrepreneur worth billions. In order to make rent, he and his roommate, a fellow Rhode Island School of Design graduate who, like Chesky, was broke, decided to turn their apartment into a makeshift bed-and-breakfast to host attendees who were coming to San Francisco for a design conference. Because neither had a real bed, Chesky and his roommate rented out three air mattresses to their guests—hence, the name Airbnb. An idea that began as a lark in 2007 has come a long way: Airbnb was recently valued at $25.5 million by investors, and lists 1.7 million homes for rent across more than 190 countries on its website.
Despite these growth metrics, Chesky emphasized that the personal connections that develop between hosts and guests and the experience of belonging that hosts offer guests—rather than rooms or inventory—are what his company is about. While nobody thought in Airbnb's early days that tourists would be willing to stay with strangers in an unfamiliar city, the opposite has turned out to be true. Hosts love opening up their homes to travelers, and travelers have found places to stay that had a personalized touch and that felt more like home in an unfamiliar city.
"This weird thing that happens is that the normal one-year arc of a friendship gets compressed into a few hours," he said.
Chesky shared an example to illustrate his point: an Airbnb host in the United Kingdom told him that his home was near rioting that broke out in several London neighborhoods a few years ago. In the 24 hours it took the host to speak to his mother and tell her he was safe, seven of his previous Airbnb guests had called him to ask if he was OK. That his former guests had so swiftly turned into friends didn't surprise Chesky at all. "It's not that he provided a space, but that he provided a sense of belonging."
As previously reported, hoteliers are not concerned about Airbnb at this point.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
