Managing the shared space, amicably
With the legalisation of Uber in Queensland earlier this year, it is natural that the debate regarding ‘collaborative consumption’ be prevalent, and that the arguments regarding Airbnb – the most prominent example of the ‘shared economy’ – be raised again.
The commentary is divided with the pros and cons from the various stakeholders, outnumbering the options to resolve it. There is no doubt that Airbnb or something similar, will dominate the letting landscape headlines for eons to come, possibly changing the status quo.
If you believe the Airbnb marketing hype; to date, in excess of 60 million people have rented accommodation from a service that offers two million rooms in over 34,000 cities across 191 countries. These wanderers chose their rooms and paid for everything online but their beds were provided by private individuals and/or letting agencies, rather than the usual three, four or five-star hotelier.
Technology has reduced transaction costs, making sharing assets cheaper and easier than ever – and therefore possible on a much larger scale. Just as peer-to-peer businesses like eBay allow anyone to become a retailer, sharing sites act as an ad hoc taxi service or boutique hotel, as and when it suits them.
The greatest change is the availability of data about people and things, which allows physical assets to be disaggregated and consumed as services. It is simply the latest in a long line of businesses that are being disrupted by technology.
In relation to the letting of real estate, Airbnb and other disruptors were preceded by TripAdvisor, Wotif, Stayz and countless others. Some of these have lost their effectiveness over time, and there will undoubtedly be others that will follow Airbnb and continue to disrupt the business space.
The proposition that I want to put forward, however, is that if Airbnb is the problem then management rights is the solution. Online social technology will continue to disrupt the way conventional business is conducted; the challenge will be on how best to adapt and get ahead of the game.
We all know of the problems that have arisen, including overcrowding, unruly behaviour, unfamiliarity with the emergency and safety procedures, unit owners, who let people into the building or property without imposing proper security and behavioural controls, as well as reports about outside real estate agents posing as unit owners/hosts, meeting unsuspecting clients onsite and pretending that they are just “sharing” a room or two.
This is not ‘sharing’, this is conducting a business and in these cases, the business is conducted based on misleading and deceptive conduct. Does this mean that the outside agent and the unit owner now become persons conducting a business or undertaking (PCBUs) and if so, where does their responsibility and duty-of-care start and finish?
When seeking ways to stop these short-term rentals from occurring, it has been established that the law specifically forbids a body corporate to limit the way in which a lot owner lets a property. The onus therefore falls back on the resident manager when there is a management rights business model in place.
Management rights is the business of onsite letting and on-site facility management. Management rights operators are licensed, trained, insured and are on-the-spot to ensure that the scheme’s by-laws are adhered to, and that the security and use of the building and its amenities are monitored and controlled.
The resident manager has a vested interest to ensure that the guest is appropriately identified and made aware of the house rules and how the guest’s behaviour may impact on the peaceful enjoyment of other guests and permanent residents.
We`ve heard the horror stories of bad behaviour that can occur in schemes where guests are booked and placed in the apartment by outside agents or other unit owners. It makes it very difficult to control the behaviour of guests who were not placed there and therefore not under the direct control of the resident manager.
Management rights is the solution to the latest disruptors because a resident manager acting as an onsite letting agent a) delivers a better rental return than any other form of letting and b) is more successful when selecting and managing guests.
A resident manager operating as an onsite facility manager is on the spot to nip problems in the bud and ensure that preventative maintenance is attended to. This maximises the value and amenity of the units as well as the common property.
The ARAMA ‘member’s only’ resource library has stacks of information to support the benefits of onsite letting and onsite facility management; this includes managing short-term or long-term lettings on behalf of unit owners.
Management rights is a tested and successful business model that is in place in over 3300 building in Australia and has been in operation for over 50 years. Management rights is the solution for unit owners who are investors, and for unit owners who are occupiers, and it’s time we made a noise about it.
Eric is the National President of ARAMA. Australian Resident Accommodation Managers Association (ARAMA) is a membership based, not for profit, peak industry body which represents the interests of people who are involved in Management Rights.
The issue is not restricted to Airbnb, but is across all apartments managed by outside letting agents. Unfortunately no one bothered to make any noise about this mode of letting so to raise it now under the guise of Airbnb is pointing the finger incorrectly. Yes, in many cases the onsite manager does a great job, engages with the guest and plays “meinhost” perfectly. However there are many managers who simply can’t even greet their guests with much more than a grunt let alone bother to engage with them prior to their stay and it is this that allows the likes of Airbnb and outside letting agents to gain ground in the market. Travellers are speaking with their fingers when they choose Airbnb or external holiday let companies over other apartments in the same building offered on line. They want someone to show them their room, the hotel facilities, explain the area etc when they arrive at 6pm.They do not appreciate arriving somewhere in an unknown area, having to phone an after hours service to get access to a safe to retrieve a key, figuring out the direction to their apartment all by themselves etc. So onsite managers need to forget this 9 – 5 routine if they want to work in the hospitality industry, service never sleeps and it certainly doesn’t work an 8 hour day!
We run a complex which has a couple of apartments that use an outside agent and an owner that also lists with Airbnb. In fact, like many other complexes we also make use of Airbnb and list a couple of apartments from our letting pool. My experience is a little different than what which Travelion has described in his/her comment. In that, the local agent uses a afterhours keybox for their guests and this box is located at their shopfront about 2 km from where the apartments are situated and they never appear to show the guests into the unit. Our Reception is constantly having to assist guests from these externally managed apartments, who either want to collect or return their keys, or report something wrong in the apartment.
Also, for those that are interested, follow this link to a very interesting article that is pertinent to this discussion.
https://www.tnooz.com/article/self-management-dying-on-airbnb-and-vacation-rentals/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Tnooz+%28Tnooz%29