In the age of the “sharing economy,” companies such as Airbnb and HomeAway have drastically changed options regarding travel accommodations. With nearly two million combined locations between the two, this new business model is quickly overtaking the major hotel chains in some areas. Both services offer unique selling points that hotels cannot offer, such as normal household amenities and an “authentic” living experience. Travelers now opt for the chic apartment on the Upper West Side rather than the kitschy hotel located in Times Square.
These platforms are not only aiding the casual adventurer, but Airbnb and HomeAway have been instrumental in boosting middle-class household income. In a study conducted by Gene Spurling, former White House National Economic Advisor and Director of the National Economic Council, those engaging with Airbnb have earned an average of $7,530 in supplementary income. HomeAway also estimates that, on average, its users generate $27,360.
For homeowners across the country, offering your living space with either company is an incredibly enticing option. You know the demand exists and the revenue generating opportunity seems almost too easy. Unbeknownst to you, however, your renters could be damaging your earning potential. Today, we examine two possible effects bed bugs can have on those leasing their properties through the most popular online platforms: Airbnb and HomeAway.
Both services offer some form of protection against unpredictable occurrences, such as damaged property or stolen goods. However, it’s incredibly difficult to assess and assign blame for a bed bug infestation. Bed bugs are nondescript until reaching a mature age and can go unnoticed for weeks, long after your guests have left. Thus, both companies will inevitably avoid awarding any cash settlements to help debug your home or apartment. Airbnb explicitly states that their rental protection agreement doesn’t cover pest management.
The cost of a bed bug infestation can add up pretty quickly and eat at your profit, especially if bed bugs spread beyond the boundaries of a single room. If an infestation gets out of control, it may not only result in high remediation costs, but also replacement costs of furniture or belongings that are permanently stained with bed bug feces, blood stains and egg remnants.
Tanking Your Reviews
The success of Airbnb and HomeAway hinges on the review system between the users. Reviews allow these business interactions to occur through a very personal medium and require very little intervention from the corporate entity. Those looking to book a room through either option will consider the reviews and any personal anecdotes on the property equally as important as the associated cost. Both companies could have multiple locations with agreeable price points surrounding your home, so a few scathing reviews complaining about your home or apartment’s bed bug situation would persuade an individual away from booking your property.
As an owner, you will have to perform due diligence and risk management when accepting guests into your residence. Here are a few action items you can take to mitigate a potential outbreak and sustain your earning potential:
- Provide your visitors with information on bed bugs, including self-inspection and insect habits.
- Draft a rental agreement that includes a clause on bed bugs, providing information on your last inspection.
- Utilize a protective mattress cover on the rented beds.
- Wash and dry sheets and comforter on high heat.
- Schedule regular bed bug inspections with a professional pest control company like Wil-Kil Pest Control and factor the costs of those, along with potential extermination costs, into your rates.