Airbnb: A Movement of Efficiency

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Airbnb is part of a movement of efficiency. When my family lived in Palo Alto, we had 3 bedrooms but really only needed 2. My mother re-rented the extra room out to 3 different college student tenants over the course of four years. My mother loves efficiency.  As a very educated woman with four degrees, one a PhD from Stanford in Management Sciences, my mother found a true passion in operations and efficiency. As a professor, she taught and emphasized efficiency. As a mother, she mandated efficiency in the family. Naturally, if we have extra-unused real estate, the space should be utilized and we should capitalize off it.

Having grown up with this standard, I have always had this mentality. I have always shaken my head at inefficiencies in other families, industries, and the world and I see so much wasted opportunity of excessive, unused real estate. Recently, there has been a movement to make housing inefficiencies more efficient with the birth of companies like Airbnb (Air Bed and Breakfast).

Airbnb is an online real estate market place founded in 2009 that allows “people to list, discover, and book unique spaces around the world online or from an iPhone device. Whether the available space is a castle for a night, a sailboat for a week, or an apartment for a month, Airbnb is the easiest way for people to showcase these distinctive spaces to an audience of millions.” Imagine the possibilities! You are traveling to New York from Los Angeles, and you would much rather stay in a Manhattan Flat than a boring hotel. You jump into Airbnb and book something for two weeks. At the same time, you rent out your place to gain a little bit of cash.

There are several reasons why I love this:

1)    Airbnb is very efficient, and I am a huge fan of efficiency. In the normal course of life, a housing unit is largely uninhabited. There are 168 hours in a week, and a normal person probably spends 40-50% out of the house. While this may be inevitable and may not be capitalized on, a normal housing unit is probably vacant for a long 2-week stretch every year with the average 2-week vacation time.  With 129,969,653 housing units empty for 2-weeks, we can see that there is 1,819,575,142 days or 43,669,803,408 hours wasted in a year where homes simply sit, collect dust, and deteriorate.  Airbnb can help put this wasted space to use.

2)    Airbnb gives users extra money. According to my estimations, an average person can probably generate a good $413.42 of rent income over the 2-week vacant vacation period with the assumption that it priced exactly at mortgage rates. If every housing unit was rented out like this, America could generate a good $53,731,887,592/year.

Meanwhile, Airbnb capitalizes a pretty penny off transactions, and I think it deserves to. The Internet makes this platform possible, and it is truly a beautiful thing. Where there is inefficiency, there is room for improvement. Where there is inefficiency, there is an opportunity to capitalize. Regardless of any security flaws, I highly approve of Airbnb and this trend of efficiency.


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