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Airbnb set to launch Premium Tier?

By Angelique Ruzicka

According to several reports, Airbnb is set to launch a luxury spin-off where only hosts with top of the range appliances and five star-like service and offerings will be able to advertise their spaces. Airbnb refused to comment on the new venture but a spokesperson revealed: “We're continually experimenting with new ways to create meaningful experiences on Airbnb. I don’t have any more to share on the new things we’re test driving but we have a few exciting projects in the works.”

However, several sites like Bloomberg have already reported that the online marketplace and hospitality service is set to launch a Premium Tier, which will target business clients and take business away from established hotel groups.

Local rival

While Airbnb has established itself as a global platform where people can advertise their homes or other spaces to local and international tourists, there’s a local rival that’s just recently launched that hopes to steal some of its market share in South Africa. Justmoney’s sister website, Moneybags, reported on the launch earlier in the month.

Wahi was founded in March 2016 by chief technical officer, Daniel Baily and chief executive officer Michael Hodgson, however, it was officially launched and open to users earlier this month (5 June). The founders describe it as a ‘convenient peer-to-peer marketplace’ for people to find and offer storage space.

Hodgson relayed to Justmoney that the platform enables users to advertise spaces like apartments, rooms, etc. on Wahi, but only as storage space, not as accommodation. 

Fee structures compared

There’s a 17.5% service fee of which 15% is payable by renters and 2.5% by the hosts. “If a space is offered for R100 for example, the platform will charge the renter R115 and we’ll pay over R97, 50 to the host,” explains the CEO and co-founder, Hodgson.

Airbnb, meanwhile, has a similar cost structure. It charges hosts a service fee (including taxes, if applicable) every time a booking is completed. Airbnb said the amount of the host service fee is generally 3%, but may range between 3-5% depending on the cancellation policy selected by the host. The host service fee is calculated from the booking subtotal (before fees and taxes) and is automatically deducted from the pay out to the host.

Airbnb added: “When a reservation is confirmed, we charge guests a service fee between 5% and 15% of the reservation subtotal. Guests see this fee on the checkout page before they book a reservation.”

Hodgson explained that Wahi’s fee will be used to create a safe market place with verified hosts and renters. It will also help to maintain the software and development of the platform and provide sufficient service operations to the market.

Wahi is set to offer customers an insurance product too. Hodgson refuses to say which insurer Wahi has teamed up with as he reveals the company is still in talks with the provider but he describes the company as an ‘innovative’ player. “We’ll build the product onto the platform and users will have the ability to opt in or out of purchasing the cover,” he said.

Should Airbnb watch it's back? 

It’s too early to tell whether Wahi will make a significant dent to Airbnb’s lion’s share of the market. It's also only just operating in the storage space arena, so it's not enabling users to act as tourist hosts just yet. This may change though.

Airbnb probably know that it’s only a matter of time before local players, in each of the respective countries it conducts business in, take it on and provide similar services. This is probably why the company is diversifying its business and allowing users to advertise services where tourists can enjoy ‘experiences’, such as tours, surf and yoga lessons and more.

Wahi are probably entering the marketplace in the correct manner though by offering storage space to retail and commercial customers. Parking spaces are a rare commodity in cities like Cape Town and with the increasing influx of commuters clogging up the system and needing to drive to work thanks to the failing transport system, its set to be in demand.

 

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