Digital disruption

Momina Aijazuddin Saeed explores Airbnb's impact on travel - in a world where digital innovation is taking centre stage

Digital disruption
The digital age has connected us in ways that were unimaginable in the very recent past – our experiences can be live-streamed, tweeted and shared in an instant. Information globalisation is here to stay. There will never be a day again when one cannot access information, culture and music at the touch of a button, to plug into a world without borders. This is not without a sense of irony when, all too often, it feels as if our physical world is more divided and fragmented than ever.

At one inspiring conversation between Jim Kim (President of the World Bank) and Joe Gebbia (co-founder of Airbnb) in Washington recently, the two global business leaders outlined the powers of the digital economy. For those of you who are not familiar with Airbnb, it is the success story of the digital alternative hoteling age. In 2007, this company did not exist. Fast forward a decade, it is now valued in the billions and has expanded to more countries than the World Bank itself (191 vs 189).This means that you can choose to stay in one of more than 4 million homes in over 190 countries and enjoy a unique personal experience – sharing a space with others in their apartment, staying in a house or even a palace or a boat – in effect seeing those places through the eyes of a local.
This summer my own family stayed in a modern, well-equipped apartment in Venice for the same price we would have paid for a cramped hotel room. Each morning, we woke to several young artists sketching the building we were living in

The Airbnb story is compelling – as such narratives of disruptive change and innovation often are. Gebbia and his design graduate friend Brian Chesky began by renting out their space in San Francisco to people visiting the West Coast for a design conference. Contrary to their expectations, they attracted professionals and not students. These people wanted a local experience and an alternative to paying over-inflated rates at impersonal convention hotels.

These two RISDI (Rhode Island School of Design) graduates took their guests to their favorite burrito hangout, and showed them the city through their eyes. In exchange, they made enough money to pay for rent for their one bedroom apartment. They did it on a shoestring budget – buying inflatable air mattresses from the local TARGET. Slowly, they professionalised – setting up business in the same apartment, hiring photographers to take professional stills of the properties and engaging with people around the world who wanted to host and be hosted. By doing so, they challenged the notion of ‘stranger danger’ – that one does not trust strangers, either in one’s own home or as hosts.

Over the past few years, Airbnb has created an amazing virtual community. I have used it myself – staying in beautifully restored spaces in Italy and Mexico. I often find myself exploring the website to surf between forest retreats in Montana and local communes in Bali. The creation of these virtual communities is a sign of our times: whether Uber, or Facebook or Airbnb. These companies provide in the digital age an insight to others’ lives, and make experiences otherwise interesting, cheaper and usually more convenient.

One can access these experiences regardless of where one is from and where one lives in the world, which again breaks the notion of national boundaries a little bit at a time. Obviously, there is pushback, from local municipalities concerned that rental prices rise as people start renting out their spaces rather than living in them, people circumventing income taxes, and a few unfortunates who have bad experiences, particularly in shared spaces. There is a dark cloud in every silver lining. Airbnb is facing intense opposition from the hoteling industry and has attracted lawsuits in places like New York or Berlin, where it has been declared illegal.

Consumers and users argue that benefits outweigh the options; particularly for families. This summer my own family stayed in a modern, well-equipped apartment in Venice for the same price we would have paid for a cramped hotel room. Each morning, we woke to several young artists sketching the building we were living in. I could make delicious breakfasts from figs, fresh cheeses and flaky pastries available in from the local Venetian bakery recommended by the owners. Which hotel offers such personalised options?

Gebbia spoke about the company’s corporate social responsibility efforts – whether by paying U$300 million in taxes to local municipalities or Airbnb’s efforts to drive sustainable tourism. One example is of Syrian refugees in Jordan who supplement their income by offering Middle Eastern cooking and traditional dabke dance classes. In Cuba, people who on average make about US$300 a month, are learning to offer their apartments and earn ten times as much, especially as Cuba opens up to foreigners in the wake of the easing of the US travel bans.Such experiences are an innovative aspect of travelling through the website; connecting those who can offer and receive such services such as guided painting tours in Rome or NYC through a photographer’s eyes.

World Bank Group President Jim Yong Kim and Airbnb co-founder Joe Gebbia

It is only natural that Gebbia as the Chief Product Officer of Airbnb should launch into new unchartered territories. In rural Japan he is exploring the concept of design, which has been so critical for Airbnb’s success. The Yoshino Cedar House project began last year in a village as a venture between Airbnb, the local community and Tokyo-based architect Go Hasegawa. The idea was to use design and architecture to create a prototype space that merges aspects of a private home with those of a village hall, where one can stay as they would in a private home but have access to a community of artisans who are building and creating in a communal space. This would encourage local artisans and their creativity while also providing access to such a world for tourists. It would be such a great idea to do this in other derelict and forgotten communities in rural areas to attract tourists. Immediately, this made me think about the potential for such projects in our old cities and sites.

I have been blown away by the disruptive and immense power and potential of the digital economy to  create new and active communities. It offers people a unique and authentic experience, to experience life off the beaten track without the need to own assets. That is why Airbnb’s branding value is worth more than US$30 billion – simply from deals in accommodation without owning real estate, through an exquisitely designed portal. Is it accidental that Uber, which has no cars but has revolutionised transportation, and Airbnb, should be twins born in the same digital age?