Skift Travel News Blog

South Africa’s ministry of tourism and Airbnb have announced a partnership to regulate the country’s short-term rental industry.

This agreement will include the introduction of a voluntary national registration system to help the South African government understand the rental business better. The country’s tourism minister Patrcia de Lille said, “Insufficient information is available about the unregulated Short Term Rental subsector, and this hampers informed policy decision making. Access to the Airbnb data can only assist in informing better decisions.”

The registry would also look to “protect hosts and clamp down on property speculators who damage communities,” added Velma Corcoran, Airbnb Regional Lead Middle East Africa.

Airbnb has long been calling for rules to distinguish between professional and non-professional activity and a framework for public-private cooperation to help promote inclusivity in the country’s sector, added Corcoran. Airbnb said it will further give South Africa’s tourism ministry access to its City Portal—a tool it says has been “rolled out to over 300 jurisdictions to date and helps governments develop and manage fair short-term rental policies and regulations.”

This call for regulation is in contrast to the crackdown underway in New York, in which Airbnb hosts must register and comply with STR rules specific to the city. In New York’s new registration requirements, hosts with shared rooms need to obtain registrations from the city to accommodate a maximum of two guests legally, and the hosts need to be present during the stay.

Corcoran added that international best practices regarding the short-term rentals sector will be a focal point for the Airbnb Africa Travel Summit, slated for 23rd to 24th October in Johannesburg.

Skift reached out to SA’s Tourism Minister Patricia de Lille to confirm when the registry would take effect, what information would be required, and how the data would be regulated and protected but has yet to receive a response. 

Greek startup Blueground has bought corporate housing specialist Travelers Haven to grow its footprint across the U.S.

Denver-based Travelers Haven sources apartments on-demand through its software and a network of vendors, giving it access to up to 20,000 U.S. cities.

Terms of the deal were not disclosed, but Travelers Haven reported $100 million of revenue in 2022.

Blueground focuses on urban centers, with apartments in 11 cities in the U.S. and 19 cities internationally. It said the combined organization will employ 1,200 people, and is expected to reach over $600 million in revenue in 2023.

Traveler’s Haven currently employs 100 people. “Nobody will be laid off following the acquisition, and their day-to-day work will not change as a result as the two companies will continue to operate independently for the near future,” a spokesperson said.

This acquisition is also expected to add more clients to Blueground for Business, its corporate service division for human resource and travel managers.

Airbnb executives have talked a lot about how they have reduced their spending on performance marketing (think: buying ads in Google search results) to focus on brand marketing (think: subway posters advertising the company’s new “OMG” category of properties). So how much do they spend on brand and how much on performance?

The short answer is we don’t know for sure. In its first year after going public in December 2020, the short-term rental giant didn’t break out its brand marketing as a share of sales and marketing expenses in its financial results.

This year, though, it began to provide a touch more color, though not enough detail for a full picture.

The company doesn’t disclose how much it spends on performance marketing. Yet it has begun disclosing its year-over-year increases in search engine marketing and advertising spending. In the first nine months of the year, its search engine marketing and advertising expenditure rose by $76.9 million year-over-year. Sadly we don’t know what the total amount of performance marketing was in 2021 to compare it with.

What we can see for sure is that the bump in performance marketing represented a comparatively smaller increase than the company’s increased expenditure on brand marketing. We know that the company increased its brand campaign spending and that the increase was two-and-a-half times as much as the increase of its performance marketing.

In the first nine months this year, the company spent $771.9 million on “brand and performance marketing,” according to financial filings published on Thursday. Of that, $202 million, or 26 percent, represented increased spending on specific brand marketing campaigns.

Sadly, we don’t know the company’s total spending on brand marketing.

But we know the increased spending was meant to support campaigns including its “OMG” category of properties. Since the category’s introduction, the OMG listings have been viewed more than 300 million views, the company claimed this week.

Brand marketing is critical to the company’s ability to continue to attract guests and hosts through direct and unpaid channels, which executives say are cheaper than advertising on Google, Facebook, and other channels.

The company’s other “sales and marketing” costs included personnel-related expenses for its communications teams and for “policy,” which cost a separate $335.7 million in the first nine months of the year — representing a 3 percent increase year-over-year.

Added up, the company spent about $1.1 billion on “sales and marketing” in the first nine months of this year. That was about 17 percent of revenue, far lower than what traditional online travel agencies spend, as Skift has analyzed before.

Boosting Incentive Payments to Customers?

An unspecified amount of Airbnb’s other sales and marketing money was used for referral incentives and coupons. The company has for years made payments to customers via referral programs. Airbnb typically offers a coupon credit for a future booking after a person refers someone to the online agency and that new customer completes their first stay.

The company doesn’t spell out how much it spends on these incentive programs. It appears to mostly lump the amount along with refunds it offers to customers upset with something going wrong in their Airbnb experience.

Intriguingly, the total number of customer payouts for incentives and refunds has increased this year. In the comparable third quarters in 2020 and 2021, Airbnb kept these sums at about $85 million. But in the third quarter of 2022, the total number of incentive payments and refunds rose to $152 million. That was 78 percent more.

Have refunds gone up as the pandemic has ended? Perhaps. But it’s also possible that the company instead increased its referral and related marketing programs, such as where it offers coupons. The company hasn’t broken out the details.

Energy Credits for Hosts in Britain?

On Thursday, the company debuted another type of brand-boosting program. In the UK, Airbnb debuted a sustainable hosting fund worth about $1.1 million (£1 million) to help property managers who want to make their lodging more energy efficient.

Many hosts are struggling to cope with spiking energy costs in the UK because Russia is disrupting energy supplies to Europe during its war on Ukraine.

Airbnb will make grants to hosts of about $3,300 (£3,000). Qualifying actions include switching to a more energy-efficient boiler or heat pump and insulating a roof. Details are at the company’s sustainability fund site.

Overall, Airbnb appears to have found alternatives to paid performance marketing to be more cost-effective. For more context, watch Airbnb co-founder and CEO Brian Chesky explain the company’s strategy in this video from Skift Global Forum 2022.

A startup whose founding team includes two former Uber staffers has secured $5 million to grow its vacation and short-term rental platform in Mexico.

Naya Homes began operations in Puerto Vallarta in August, and with the extra cash will launch in Mexico City, with a 15-unit building in Polanco in September.

It specializes in vacation and short-term rental management, and it works with both real estate investors and homeowners.

The company claims that relative to Latin America incumbents that execute master leases on larger buildings, Naya Homes is an asset-light operator that maximizes profitability for all types of properties, from individual apartments to vacation villas.

Despegar, meanwhile, is bolstering its vacation rentals portfolio in Latin America, following the closing of a 51 percent stake in channel manager Stays. Lodging startup Casai, which is based in Mexico City, is also steeping up its presence.

The funding round was led by Boston and New York City-based Flybridge Capital Partners with participation from Primary Venture Partners, Clocktower Technology Ventures, K50 Ventures, Carao Ventures, Trip Ventures, Colibri Equity Ventures, Derive Ventures, in addition to several former executives from Uber’s Latin America team.

“We believe Naya can deliver incredible value to numerous stakeholders across the residential real estate value chain at scale,” said Jeff Bussgang, partner at Flybridge Capital Partners, in a statement. “Naya’s founding team is incredibly well-positioned, having on-the-ground experience managing operationally intensive businesses in LATAM, ranging from Uber to Sonder.”

The funding follows a $600,000 pre-seed led by Primary Venture Partners in March 2022.

The owner of European vacation-rentals business Awaze is looking for a sale, according to a media report.

U.S. private equity firm Platinum Equity created Awaze after buying a selection of rental businesses from Wyndham Worldwide in 2018. The deal was worth $1.3 billion, and its collection at the time included Novasol, Cottages.com, James Villa Holidays and Landal GreenParks.

Now Sky News has reported that Platinum Equity has appointed Goldman Sachs and Morgan Stanley to oversee a strategic review of Awaze — with a price tag of up to $2.14 billion. A sale is being sought within the next 12 months. However, in June another report suggested a sale could take place by the end of this year.

Awaze itself has been buying up other players. In 2021 it bought Bornholmtours, Amberley House and Portscatho Holidays, Quality Cottages and Quality Unearthed.

Awaze CEO Henrik Kjellberg said bookings were “holding up well over winter both in terms of volume and price,” in a Financial Times report on Monday. “Even in the event of a recession, I expect the travel industry will still perform well”.

With Airbnb among the potential suitors for the Wyndham rental brands back in 2017, could it now return to the table as the short-term rental market recovers afters the pandemic?

Alloggio, a short-term rental property manager based in Australia, has invested $11 million ($16 million Australian) since its November initial public offering. The small company has acquired rights to manage properties and getting its own channel manager by acquiring Aabode.com, reported The Australian.

The company is strengthening its position as one of the country’s managers of short-term rentals and vacation homes through a series of acquisitions of companies, including Great Ocean Road Holidays, Best of Magnetic, Prestige Holiday Homes, First National Magnetic Holiday Rent Roll, and The Edge Holiday Rent Roll at Coffs Harbour.

Alloggio now manages about 1,950 holiday homes in the country. For fiscal year 2022, it expects to generate revenue of at least $14 million ($21.5 million Australian) and earnings before interest, taxes, depreciation, and amortization of at least $7 million ($10.5 million Australian).