Tourism is about experiencing the local cultures and making the most out of your interaction in new environments. Airbnb is part of the tech-led structural shifts in housing from a product into a service making it a PropTech. It feels amazing to come back to a home after a day-long encounter with the local culture instead of a cookie-cutter hotel room. Investors and developers in Airbnb sought to fill this gap in demand and have since demonstrated considerable growth. The active Airbnb listing reached 5.6 million with an annual hosting of more than 0.5 billion guests worldwide. The growth prospects of Airbnb have necessitated its adoption in developed and emerging economies. The Kingdom of Saudi Arabia recorded an impressive performance in its tourism industry with a maximum number of international arrivals in 2022 displacing regional giants such as the UAE. However, it remains unclear whether Airbnb is a PropTech.
So, what is PropTech and Is Airbnb a PropTech?
PropTech was born out of the rapid changes in the real estate industry. The emerging need to address the inefficiencies as well as antiquated processes in real estate prompted technological advancements. PropTech refers to the innovative technologies that are used by specialists and industry experts in real estate to sell, manage, market, and develop a property. While the term PropTech is slowly becoming a household name, you may want to know how we got there.
Stages in PropTech
The Internet Age also referred to as the era of the information revolution resulted in Real Estate 1.0. This period was characterized by the democratization of RE knowledge. With the increased tech adoption, you could access large RE data such as pictures, maps, and the value of your desired home. However, this stage did not the buying and selling processes.
The next stage was Real Estate 2.0 which enabled home buyers and sellers to go through complicated, slow, and costly processes to sell or purchase the property. Several PropTech solutions have since emerged to improve user experience and streamline transaction processes.
We’re currently experiencing Real Estate 3.0 which is a cocktail of cultural and financial ideals blended into a mental model. With the widening wealth gaps, the opportunities emerging from Real Estate 3.0 are sending clear indications regarding the difficulties that players in the industry will likely shoulder. What we already know is that many investors are tempted to avoid throwing out their money in a purely rental situation. Perhaps, rent-to-own is twisting the arms of many stakeholders in the RE industry.
Housing as a Service (HaaS)
Airbnb is a short-term rental that advanced the provision of housing as a service. It provides an opportunity for an on-demand provision to fill the demand gap in housing. This innovation is part of the transformation to ensure that the real estate sector enjoys efficiencies that have since been confined to eCommerce players. As tech companies move into the Airbnb space to eliminate the friction in the physical interface, real estate begins to experience a technological transformation. With the HaaS, it is right to say that Airbnb is a PropTech.
What does the Kingdom’s Airbnb look like?
With the growing demand for accommodation in the Kingdom during peak seasons, hotel spaces are inadequate. Arab News Reported Hadi Moussa’s insight and pointed out that the Kingdom’s potential for global accommodation sharing is yet to be reasonably exploited. With plans underway to invest $100 trillion in the tourism sector in the next 10 years, Saudi is destined for greater success in integrating technology into Airbnb and the overall real estate industry to meet the exponential growth in demand for short accommodation services.