Yes I’m mad I got ripped off by AirBNB Scalper. And yes. It IS a scam.
There was a large (and at least on reddit) evenly negative response to my last post about AirBNB scalpers:
And I hear you. I’ve read Ayn Rand, and have a business degree. Capitalism preaches that everyone should always try to seek their best advantage, and when one party gets one over on another party, that other party should laugh, point gun fingers, say “Ya got me” and buck up next time. That’s true of Capitalism for sure.
I don’t think there was anything illegal done by the host, or AirBNB, but that doesn’t mean it’s not still a scam. And it isn’t going to stop me from trying to bring it to the attention of AirBNB and try to get them to put a stop (or at least a finger) in the coming flood of scalpers on the site. Hear me out.
First, the game. I’m going to sum it up quick here, not because I want the practice to spread, but because calling out bad practices and loop holes publicly like this is the only recourse when you bring it up privately and it doesn’t get fixed. Plus, it’s already out there:
- Find a hotel that doesn’t list their rooms on AirBNB
- Steal the images, description etc from the site they do list on and post a listing that claims you to be the “Host” on AirBNB, set the price higher than what the hotel charges
Arguments “For” this behavior focus around defense of it as “Arbitrage”, these people who choose to do this as a living aren’t just leeching off gullible marks, they are providing a valuable “Relisting” service, helping folks find properties that they otherwise wouldn’t, and taking whatever reasonable fee they can as a fee for the service they are providing. And were it just that, I’d agree with those arguing against me, but there is an important difference.
There are plenty of websites that provide hotel arbitrage as a service. In fact, some of them it’s their primary marketing tactic:
It is an important service, because unlike milk or steak, there is a great deal of research required to determine what a fair price for a room is on a given day in a given location, and a fair price can vary quite a bit.
AirBNB doesn’t bill themselves as a site to help you find the best deal in a sea of deals, their market niche is “Cutting out the middle man” — By allowing home owners (or renters) to sublet their own property directly to the renter, maximizing both the profit to guest, and minimizing the cost to the guests. A win win for all of their real customers (Hosts get the best rate they charge, and guests get the best price minus middle men). And they have become wildly profitable on that advertised image. By secretly adding a third client (Hotel “Arbitors”) they are being dishonest to at least the “guests” part of their existing client base, and acting in bad faith in regards to their implied promise of direct pricing. If there isn’t an actual promise of direct pricing (I looked, and couldn’t find one), then at a minimum it’s shady. AirBNB extracts a hefty fee for using their website, and so they are making a not insignficant amount of money off this new client, and as shown in my previous post they are both aware that it is happening, and actively hiding the fact.
Here is the litmus test:
If items that were “Re-listed” indicated that they were such (Though didn’t provide a link to where the original listing was from) would they still be successful?
The answer is no. Because there are other great sites out there that people know about, and it’s trivial to find the original listing and book through the other site. There may be a few who find the “service” of being able to find all hotel sites through AirBNB useful, but people don’t come to AirBNB to find all the sites they can stay at (There are better providers of this service) they come to AirBNB to find a direct deal.
If you have a business plan that involves the customer not knowing how your business plan works, then you are a scammer.
I’m sticking to my guns here.
And to those who are saying that I’m just bitter, you’re right about the bitter part (nobody is immune to buyers remorse). But please don’t conflate that with the reason I’m spending so much time writing about and sharing this. The reason I’m writing this is to change AirBNB’s business practices. I am two times a customer of AirBNB and have been a supporter of theirs in the past, as I am a believer in the sharing economy, my wife and I have a house in Tahoe that we list on AirBNB, as it works the best at pairing us with real guests, and saves us having to bring in a property manager and give them a “cut”. I’ve stayed in numerous wonderful homes, and have 2 young children who love the special effort that AirBNB hosts put in to their homes that make staying at an AirBNB better than a double king noisy A/C hotel room. Hosts like myself have built a lot of trust with guests, and when “Scalpers” profit off that trust it hurts our bottom line, it hurts the actual guests who stay, and it turns a one click “No-Haggle” AirBNB experience into an hour of research.
The reason I’m writing this now is that they have a well protected false image of being a good deal for hosts and guests, and are profiting off that lie. And by spreading knowledge of this side of their business, at a minimum I can encourage other users of the site to be dubious of condos, and Google, Kayak, Priceline, Whatever around for the underlying real listing — And maybe, just maybe, I can reach some executive at AirBNB who agrees with me and get them to correct their course before their image is damaged permanently and get these people booted off the site, because it’s my belief that doing what is right for the people spending the money is better in the long run than doing what is right for your share holders in the short term.