The power of community marketplaces in the 21st century

Back in 2007, two friends and I were planning a short holiday to attend the famous San Fermín festival that takes place in Pamplona (northern Spain). Since it was a last minute decision, all hotels and hostels were fully booked and it was extremely difficult to find accommodation for those dates. A couple of days before leaving it got to a point where my friends were considering going there without a prior booking, perhaps try a few places in case of any last minute cancellations but, if nothing worked out… we would sleep in the car. I then checked loquo (Spanish site similar to craigslist or olx marketplaces) and luckily we found someone who was renting out their spare room. When I called the lady said the room was available and she was happy to add a mattress on the floor so we could squeeze 3 people in the room. This was perfect – at last-minute, we found a place to stay.

As we spent most of our time at the festival we only entered the flat to sleep, but our stay was great, the place was clean and our host was attentive and friendly.  However, prior to our arrival we knew nothing about the person who was about to host us – no references from other people, reviews from previous guests, and there wasn’t an agency in between making it look more trustworthy. At the same time she had no idea about us, the people she and her family were about to host. We only had a short 2 minute phone conversation where we agreed the deal, but there was a lot of uncertainty on both sides.

Nowadays there’s an increasing use of specialised platforms (Airbnb, Wimdu, 9flats, etc) where anyone can rent out extra space in their homes to travellers that are looking for accommodation. Not surprisingly, in all cases trust and safety are one of their main concerns for their users and there are several ways in which these marketplaces try to build them: a considerable amount of information is provided through personal profiles, people can read reviews of each other which have only been written by previous guests or hosts. There’s also a secure payment system through the platform where the money is retained during 24hours in case of any possible issues arising, and hosts are protected with insurance policies – covering a considerable amount of possible loss or damage due to theft or vandalism.

So what makes these marketplaces so successful? Being hosted by a stranger isn’t just a last minute option as it was in our case back in 2007. Travellers often prefer the experience of being hosted by a local, getting recommendations from them, doing things that locals do and going to places where locals go – they end up enjoying “local experiences” and not just the common “tourist experiences”. For hosts it’s clearly a way to earn extra cash by renting out some extra space at their homes. But they should be willing to give a good service and welcome to travellers in order to get a good review from them, and travellers are also eager to be decent guests at their home for the same reason. It’s often said that this need for good online reputation brings out the best of people, which is why hosts and travellers often establish good friendships with one another.

In fact, the oldest example of this kind is Couchsurfing, founded in 1999. The differentiating aspect of this platform is that people host travellers at no cost and as a community member that person gets the chance to travel across the world and being hosted by other “couchsurfers”, again with no cash transactions involved. So couchsurfers are specifically interested in travelling, bonding with one another and establishing cross-cultural relations. It’s a community where members regularly meet and host people while learning and sharing from each other’s experiences. With the traveller staying without any financials involved, they return the favour by doing simple things like introducing the host to their cuisine by cooking, sharing some skills (could be anything from yoga to kung-fu to guitar) thereby often forming lifelong friendships.

Finally, a true fact that shows the increasing worldwide use and acceptance of these platforms is the remarkable growth of Airbnb. This community marketplace for private accommodation was founded in 2008 and their figures since then have been very impressive, making it one of the hottest startups in the world. Since founding they have already reached 10 million nights booked all over the world (a considerable amount of nights being from the current year 2012). In 2011 it went through spectacular growth and expansion in Europe (growth rates: Italy 946%, UK 748%, Spain 719%, France 425%). Airbnb is present in 192 countries(and increasing) while in 2009 their apartments were only advertised in the US. Of course in some countries airbnb is more popular than in others, but an outstanding growth across the globe as such clearly proves the power of worldwide connections and social media in the 21st century. Moreover, the hotel industry is becoming increasingly aware of airbnb’s success as it’s gradually affecting their business, and cities like San Francisco have introduced a 14% hotel tax on airbnb transactions too.

The increasing use and importance of these platforms around the world is very clear. For some people it’s an easy way to earn extra cash that they can use to pay their expenses but we must specially highlight how these marketplaces are making people interact online and offline, thereby establishing worldwide connections, cultural exchanges and community values among their members. Moreover, a good behaviour with the other person for achieving a high online reputation is under the best interest of both hosts and travellers, so they gradually become more regarded within the community – increasing the likelihood of good future experiences through the use of these platforms. We will continue to see a growing importance of “reputation capital” in the 21st century.

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