Brigid Prinsloo is an entrepreneur on the rise. The 31-year-old former business consultant and data analyst from Cape Town turned her spare room into a source of income when she listed it on Airbnb in February 2014. A month later, Prinsloo was making enough money to cover the property’s rental.
Motivated by her success, Prinsloo wanted to grow her income, and started to look for another apartment. Within a couple of months she found what she calls “the sexy loft in the heart of the city”. That was the start of her Airbnb empire.
Having seen proof of Airbnb’s potential to create new markets, Prinsloo also decided to start her own Airbnb management company, called Superhost South Africa, with the goal of “delivering top-class service to both property owners and guests”.
The income she earns from Superhost South Africa – which she now runs permanently – pays the bills and allows her to travel, she says. (When finweek got in touch with her, she was touring Singapore.)
Between February 2014 and February 2016, her total revenue generated through Airbnb was just under R1.2m.
Airbnb – which relies on its website and smartphone app for listings and bookings – has become quite popular in South Africa with over 10 000 local listings.
“Airbnb is growing extremely fast in South Africa and in particular in Cape Town and the Western Cape,” says Sarah Michell, managing director of Back in Town, also an Airbnb management company.
Cape Town, Johannesburg and Durban are the most profitable cities for Airbnb hosts, with Cape Town a firm favourite among domestic and foreign tourists.
Risky business
Renting out property does not come without risks. Damage to property and theft by guests – as well as guests’ safety – are major concerns.
Airbnb has several features in place to address such issues, but owners might find some are found wanting. Airbnb promises a “$1 Million Host Guarantee”, but homeowners are advised to carefully study the terms and conditions to see what it covers.
The logical thing for homeowners to do is apply for bed-and-breakfast-related insurance policies, says Mandy Barrett from insurance group Aon.
If a guest is injured on your property during their stay, Airbnb has Host Protection Insurance in place, which also covers up to $1m.
But Barrett still suggests that owners who rent out three rooms or fewer apply for a personal lines policy. This policy covers trauma compensation for paying guests up to a limit of R10 000 per event and pays up to R5 000, if, for example, guests’ clothes are damaged or go missing while being washed, says Barrett.
The most reassuring of Airbnb’s security features is its security deposit, which covers damage to property by guests. When guests book listings that require them to pay a deposit, Airbnb stores their payment details, but does not charge them.
Hosts can only claim if they feel that guests damaged property on purpose. The claim goes through a couple of processes that can be mediated by Airbnb officials in case guests and hosts fail to reach an agreement.
Ultimately it comes down to trust or ubuntu – a concept co-founders of Airbnb (Joe Gebbia, Brian Chesky and Nathan Blecharczyk) are trying to spread across the world with their home-sharing platform.
This is a shortened version of an article that originally appeared in the 3 November edition of finweek. Buy and download the magazine here.