For this to happen, the rules must change to allow Airbnb to issue equity to hosts while still functioning as a private company.
In a letter to the US Securities and Exchange Commission (SEC), Airbnb has requested an ease of regulations for the home-sharing platform that would allow for widening stock ownership in the sharing economy, and, according to Airbnb CEO Brian Chesky, future economic perks for contractors should Airbnb eventually go public. Currently, securities law prohibits private companies like Airbnb from giving equity to those who are not employees or investors.
The Airbnb letter was in response to a recent SEC request for comments on the idea of overhauling rules to allow private “gig economy” companies to offer stock to contractors, in the same manner currently offered to employees. An update to SEC rules would expand eligibility of stock ownership to include what Chesky calls “substantial, but nontraditional relationships” with the equity issuer.
Chesky also noted a number of issues in this request that would need to be ironed out, most glaring is tax treatment of equity, which may be passed on to hosts.
Booking Outside the Block
Those who book outside the block for association meetings or conferences—recent estimates have it at about 34 percent—due to low hotel inventory or “around the block” perks may find Airbnb an attractive option, while also being discouraged by organizers from using it or in some cases penalized. Hotel attrition fees and higher attendance costs often lure associations into booking smaller room blocks, thus forcing attendees to find housing outside of official hotels when they run out of rooms. Association or conference organizers, on the other hand, cite the cost of cancellations as a justifiable reason for penalizing planners or attendees. Hotels review past numbers when deciding how many rooms to give, they say, while giving nod to the “Hunger Games-like” situation of room availability and the prevalence of room block pirates. Associations also tout that housing is also a key component to their power to negotiate concessions such as better room and F&B rates, transportation, free Internet, rebates, etc.
While it’s too early to say how Airbnb’s move toward offering stake in the company to hosts will affect the already budding quagmire with the events industry, one that is spurred on by the company’s move into events, and, more recently, immersive hosted experiences, it’s obvious that the disruption of the sharing economy is just getting started.
Have you booked off the block with Airbnb? If so, why?