Robert Rosenstein, co-founder and chairman, Agoda and Peter Allen, managing director of Agoda Outside, have co-authored a book, “At Home Around The World”. Positioned as “the short-term rentals handbook for guests, hosts, neighbours and governments”, the book addresses the world of alternative accommodation from four perspectives.
It’s the first attempt to create a big picture view of an industry that’s been a game-changer in travel and, as the sharing economy spreads, will create even more disruption and change.
Agoda’s Robert Rosenstein’s and Peter Allen’s new book
It’s filled with facts and figures, and industry opinions, on how the sector has grown, and will grow, and what are the challenges and issues that need to be addressed by the four constituents to allow it to flourish without becoming too much of a nuisance to local communities.
Yeoh Siew Hoon catches up with the two authors to find out why they felt such a book is necessary and their perspectives on the growth and evolution of this sector in 2019 and beyond.
Q: What was the primary intent behind the book? Why did you feel it was necessary to write it?
The book aims to educate stakeholders in the short-term rental community: guests, hosts, communities, and governments. Short-term rentals make travel more accessible to people around the world. Every time there is a movement in the market – low cost airlines and online travel agencies are two great examples – travel becomes cheaper and more accessible. At the same time market disruptions may cause stress and confusion; on a legislative front, this can lead to governments promulgating rules that hinder beneficial growth. As a global organisation we can see this happening in many countries. Stakeholders need to have a conversation to share best practices and bring everyone together to work to mutual benefit – hence the book.
Q: It’s aimed at four audiences – travellers, hosts, neighbours, and governments. The book states the demand is not a problem, consumers want local experiences. What do you feel could be the “elephant in the room” issue that could hold back the growth? And is there anything the industry could do to pre-empt this issue?
The elephant in the room is the over-the-top regulation regarding short-term rentals which stunts tourism, the creation of new jobs, and economic growth. We need to allow this ecosystem to grow and flourish. Arbitrary rules will not help and may in fact achieve the opposite of what they intend. For example, regulations that favour big chains and a homogenisation of the market end up taking a toll on small businesses and concentrate wealth, rather than spreading opportunity.
The industry can create supportive solutions through innovation. There are technological tools that help hosts with check-in, help increase safety, and help monitor and control noise; there are small businesses that provide auxiliary services such as cleaning, meals, and experiences.
The Boston Consulting Group has pointed out that the future of the sharing economy will look very different from the way it does today; it’s essential that regulators develop principles that can evolve as the market does, rather than trying to freeze things in the shape that they held in 1998 – or in 2018!
Q: You wrote too about the growing backlash in cities like Barcelona and Amsterdam – where travellers are taking over local neighbourhoods. And this is going one step further with local experiences – Airbnb experiences, companies like Klook scaling. How do we ensure harmony between travellers and local communities as the lines blur? Other than this book, what else can companies like Agoda do to “keep the peace”?
(Image credit: Philippe Paternoll/Getty Images)
We believe the best way to avoid backlash is to increase dialogue and mutual understanding. We are engaging with governments – just last November and December, Agoda held workshops with multiple stakeholders in South Korea and Taiwan; we are publishing more resources; we are joining and forming industry associations. Agoda is now a director of the new Japan Association of Vacation Rental, and we are working on another industry association too – more once it’s official.
Q: Sharing calls for open-ness and trust. Yet politically we seem to be moving towards more divisiveness, closing of borders and building of walls. How will these two forces interact with each other?
This is very hard, honestly – it’s a global phenomenon and a global problem. Our view is that travel is part of the solution. Travel famously broadens people’s experience, perspective, and understanding. Short-term rentals are a real step forward in this regard, since staying in people’s homes helps travelers meet locals, live in neighbourhoods, and really gain an understanding of other people, other places, and other cultures.
Q: There’s also growing mistrust of big tech companies that mis-use data or their power. Do you feel this will spill over into the sharing economy which demands open-ness of data sharing?
Data is increasingly important and increasingly sensitive, and we recognise that companies need to work hard to increase trust. At the same time, big data helps solve problems. Online travel agencies use data to be excellent marketers for small destinations and small properties, helping them find audiences and travelers who are looking for just the right place to go and place to stay. In addition, the reviews we gather from our customers are crucial for travelers – knowing what other travelers have experienced is the most reliable way for travellers to know where to go, and only big companies can accrue this information, aggregate it, and make it available to their customers. Big data and scale help organise markets.
Q: The book states Asia is leading the way in terms of consumers being most open to sharing. Why do you think this is so?
Our expertise is in travel, not sociology, so we’re not experts here. And it’s important to note that there are vast differences among the different Asian cultures. That said, in some ways Asian cultures are more collective than Western cultures, which tend to be more individualistic. This orientation toward the group may make people feel more comfortable with sharing. Another difference: privacy is a deeply rooted concept in the West – witness the new development of GDPR. In China, on the other hand, most consumers are accustomed to the fact that the government has access to most, if not all, of their digital communication. Asia has leapfrogged the West into the mobile world and experienced many benefits as a result – for example, the widespread use of mobile payments in China. All of these things suggest that perhaps sharing is more familiar in Asia than in the West, and perhaps more comfortable as a result.
Q: And given Asia is a more fragmented market than say US or Europe, do you feel therefore that strong local sharing platforms have a stronger chance of competing against the global elephants?
There are opposing trends here. On the one hand, global platforms are indeed very powerful. On the other hand, the growth of local host travel and of the millennial interest in experiences creates enormous opportunities on a local scale. We think there is room for both large and small companies, and it’s quite likely that each side will need the other so that they can be both local and global at the same time.
Q: (Other than China) Which 3 markets in Asia will be star performers in this sector?
Ultimately, this depends on governments. Governments that favour consumers and the development of new business and wide diversification of opportunity will succeed; those that try to protect borders and entrenched industries will fail. Japan has led the development of JAVR, so we see that as a leading market. Singapore has a history of supporting innovation and business, and we see real opportunities there. For other markets, the opportunity is there, and we look forward to working with them, both directly and through industry associations.
Q: Given the book is being penned by two Agoda executives, can we infer that the company is betting big on the alternative accommodation market? Can you share couple of strategic initiatives being implemented on this front? For example, Booking.com has created a Booking Home division. Anything similar planned by Agoda?
Agoda strongly believes that travellers want a choice of accommodation options and we have always make both homes and hotels available on our site, since our inception in 2005. We rebranded our offering as Agoda Homes in 2015. Have a look.
Q: Best alternative accommodation you’ve ever stayed in.
Rob’s favourite is a stunning villa in Bali that he and his family stayed in. Peter stayed in two different apartments during his honeymoon in Italy a couple of summers ago – one on the Amalfi Coast, with a brilliant view of the Mediterranean, and one in the buzzing Trastevere neighbourhood in Rome. There are definitely times when hotels are the way to go, but alternative accommodations offer uniqueness and are sometimes the perfect choice for a truly memorable trip.
• Featured image credit (FAM Living – City Walk in Dubai): Booking.com