Airbnb

Lodgeur’s thought pieces related to Airbnb, short-term rentals and extended stays.

What is Flex Living? Lodgeur’s guide to renting a furnished apartment in Houston

furnished apartment

Are you looking for furnished apartments in Houston? If so, then you should consider flex living – a great way to rent furnished and serviced apartments in the city. Here at Lodgeur, we provide our customers with a variety of furnished accommodations that are perfect for any length of stay. Whether you’re visiting Houston for business or pleasure, our furnished apartments offer all the comforts of home without any long-term commitment. From luxury amenities to convenient locations, there are plenty of reasons why renting from us is the best choice when it comes to finding your perfect home away from home. Read on to find out more about flex living and how we can help make your stay in Houston an enjoyable one!

How do I find a flexible, furnished apartment in the US?

woman with phone in bed

Flex living is a relatively new concept in the US. Most guests start their search either with “corporate housing [insert city]” in Google, or searching for month to month furnished apartment rentals in Airbnb. It’s messy and there isn’t a widely accepted term for turnkey homes you can rent for an unspecified amount of time. If you don’t know how long your travel assignment or relocation house hunt will last, you will likely be stuck with your original estimate.

In the UK, the concept of “serviced apartments” has been around for years and comes close to approximating flex living. Serviced apartments and flex living might seem similar, but there are some crucial distinctions between these two housing options. Serviced apartments offer furnished homes with amenities like housekeeping services included in the rent, whereas flex living is a form of serviced apartment that doesn’t require you to commit to an end date for your stay.

Read more about the differences between renting an apartment in the UK and the US, according to our British-American founder.

What is flex living?

Flex living makes extended stays easier since it offers all the comforts of home without having to sign a long-term lease agreement – perfect if you’re looking for short or extended stay accommodation in Houston. Flex living means you can enjoy all the comforts of home without having to commit to a long-term lease.

Flex living with Lodgeur

hands with gloves cleaning

At Lodgeur, we provide our customers with furnished and serviced apartments located in convenient locations throughout Houston. With our flexible rental options, furnished homes with amenities like housekeeping services and utilities included in the rent, and luxury accommodations tailored just for you – no matter how lengthy your stay may be – there are plenty of reasons why renting from us makes sense when it comes to finding your ideal accommodation for short term or extended stays.

Who stays with Lodgeur?

women drinking cofee on couch

Lodgeur furnished apartments are perfect for a variety of renters. After hosting 5,500+ guests, we can tell you that most of our extended stay visitors are in town for work: consulting projects, seasonal work for professional sports teams, travel nurse assignments, treatment in the Texas Medical Center, internship and clerkships at major law firms. But we also provide furnished and serviced apartments for family vacations, extended medical treatments, relocations and business travel.

Business travelers looking for short-term furnished rentals can find all they need in Houston’s Midtown and downtown locations. If you need to stay longer, but don’t want the hassle and expense of buying furniture, Lodgeur furnished apartments offer a great alternative.

Interns can find furnished apartments close to their Houston-based internships and travel nurses and seasonal workers benefit from the convenient furnished accommodations Lodgeur provides.

In addition, furnished apartments are perfect for patients seeking extended term medical care or treatments in Houston. Lodgeur furnished apartments provide comfort, convenience and affordability all in one package.

Whether you’re a business traveler, an intern, a patient, a travel nurse or a digital nomad, furnished apartments provide the perfect place to call home while in Houston. With Lodgeur’s guide to furnished rentals and furnished apartments located throughout the city and its suburbs, you can be sure that you have all the comforts of home, no matter how long your stay.

FAQs: Cleaning Fees

cleaning room

AP and New Wallet published an article on the cleaning fees for furnished apartments, Airbnb Has a Plan to Fix Cleaning Fees, and interviewed Lodgeur’s founder about the economics of Airbnb cleaning fees.

Here are Lodgeur’s FAQs on cleaning fees:

What is an Airbnb cleaning fee?

Airbnb cleaning fees are additional costs charged by the host to cover cleaning expenses before a guest’s stay. They can vary based on a number of factors, laundry costs, size of the property, and who is cleaning the property (e.g. the host themselves, their staff, or a third party cleaning service). Ultimately, the cleaning fee covers the cost of ensuring that your temporary home-away-from-home is clean and inviting before your arrival.

Why do I have to pay a cleaning fee for an Airbnb but not a hotel?

Hotels excel in cost-effectiveness when it comes to their cleaning services. Most hotel guests book short stays, thus allowing hotels to calculate and incorporate the costs into nightly rates easily. In the wake of COVID, hotels have also largely eliminated daily cleans.

In addition, hotel room cleaners typically clean numerous rooms per hour by pushing a cleaning cart from one small room to another as guests check out. On the other hand, apartment cleaners require more time because they are cleaning full homes with kitchens and living rooms, before traveling across town to another apartment building for the next clean.

cleaning wardrobe

Who sets the cleaning fee? Why are they so different from host to host?

The host sets the cleaning fee, and it can vary from host to host due to their own individual policies, location of their property and resources available.

For example, a property located in a rural area might have different cleaning expenses than one located in an urban environment where the cost of labor is different. A host who pays a living wage to professional cleaners will have a higher cost than one who pays minimum wage or self cleans.

Some hosts use a professional laundry service to clean the bed linens and towels in hospitality-grade facilities, to maintain hygiene standards you would find in hotels. Hosts who self clean may need to squeeze an apartment’s worth of laundry into a rapid cycle to prepare the apartment for the next guest in between checkout and the next checkin that day.

The cost of a professional wash is higher than a panic wash (about $25 for a one-bedroom apartment in Houston) and will be part of the cleaning fee.

washing machines

I’m only staying 2 nights. Why is the cleaning fee so expensive?

The cost of cleaning an apartment is the same whether you stay for 2 nights or 200 nights. Vacuuming, mopping and laundering the sheets will cost your host the same. Since the cleaning costs are only incurred once, your stay becomes a better value the longer it is.

Can I clean the place myself instead of paying the cleaning fee?

Unfortunately, no. Leaving an apartment by checkout time is a challenge for many guests and cleaning an apartment, washing the linens and preparing it for the next guest by 11am is an unrealistic expectation. You likely don’t want to stay in a property that the past guest panic cleaned, wondering if the sheets were *really* washed. The cleaning fee ensures the apartment is clean and ready for your stay.

modern bathroom image

Why can’t the cleaning fee be included in the nightly rate?

Including the cleaning fee in the nightly rate would lead to super high rates for guests staying longer periods of time. A separate cleaning fee helps to account for this discrepancy fairly. Since the host pays for the cleaning each stay, the cleaning fee is charged once for each stay.

What should I expect to clean myself when I’m paying a cleaning fee?

In general, paying a cleaning fee means that the apartment should be clean and ready for you when you arrive and that the host or a professional cleaner will take care of all the cleaning when you leave. You either pay the cleaning fee or you are the cleaner – not both.

You should never have to clean the bathroom, kitchen or other common areas. The bedding and towels should be clean when you arrive.

While each host will have their own set of instructions, here’s what Lodgeur expects when guests check out:

  1. If you’ve moved any furniture around, you should put it back where you found it. (Moving furniture is too much to ask of our cleaners, who may not be able to physically move the furniture.)
  2. Put the trash in the trash can.
  3. Check and check again that you haven’t forgotten anything.
  4. Lock up the doors and close the windows when you leave.
  5. Return your keys to the same place where you picked them up.
dishes on the stove

When is a low cleaning fee a bad idea?

If a cleaning fee is lower than similar properties in the same area, it’s worth considering why the fee is so low.

  • Is the laundry is being professionally and thoroughly cleaned?
  • Is the property being professional cleaned? How much time is being spent on the clean before your stay?
  • Are the cleaners being paid a living wage?
  • Is the guest expected to be the cleaner before checkout?

Is there a better way to save money on fees?

Yes! Check out our post for ways to save money on your next extended stay.

Short-Term Rentals vs. On-Demand Housing: What’s the Difference?

Short-Term Rentals vs. On-Demand Housing

Traditionally, renting a place to sleep always required a fixed term. Whether it was a 3-night night hotel booking or a 12-month lease on an empty apartment, you needed to fit your life around someone else’s calendar.

But over the past decade, two new rental trends have emerged: short-term rentals and on-demand housing. These two models blur the lines between booking and renting, allowing people to rent a furnished place to sleep without having to commit to a long-term contract. But what’s the difference between short-term rentals and on-demand housing?

What are short-term rentals?

Short-term rentals, also known as vacation rentals, are typically booked for a few days or weeks at a time. Think Airbnb or VRBO bookings. They are often furnished and include all the amenities you would expect from a hotel, such as linens, towels, kitchen appliances and utensils, and wifi.

Short-term rentals typically have set booking dates and offer guests the flexibility to rent for a predetermined amount of time. For example, if you’re looking for a short-term rental in a city, you would typically be able to book it only for firm dates.

If you’re looking to book a popular short-term rental for an extended stay, a weekend booking in the middle of your intended dates may thwart your booking, or the ability to extend your stay if you want to stay longer.

What is on-demand housing?

On-demand housing is a type of booking that allows guests to rent a furnished apartment for as as many nights as you need. Like a short-term rental, on-demand lodging is fully furnished and provides all the amenities of a hotel and short-term rental (linens, kitchenwares, etc.).

Unlike short-term rentals, on-demand housing does not require that guests commit to a fixed term. When an extended stay guest (30+ nights) books on-demand housing, the calendar for that furnished apartment is blocked so the guest can extend their stay as many times as they need. It’s open-ended, flexible and designed to help guests whose lives don’t fit into neat boxes.

Lodgeur guests on extended stays are able to terminate extended stays on 14 days’ notice, subject to a 30-night minimum. We call this our Peace of Mind Policy.

A travel nurse whose contract is extended or terminated can easily extend or shorten her booking. A patient at the Texas Medical Center can flex their booking dates as his treatment plan changes. A relocating professional can move into her next home when she’s ready, without the pressure of a fixed move-out date. Lodgeur’s guests have stayed for as long as 13 months in our on-demand housing! This particular guest only initially booked for one month, but extended his stay 12 times.

The world is moving toward flexible, on-demand housing that you can book on your phone like a subscription. It’s a convenient, cost-effective option for people who need flexible, extended-stay housing without having to commit to a specific term. We believe in the future, most people will rent furnished homes on flexible terms.

The bottom line

Short-term rentals and on-demand housing offer flexible booking options that bridge the gap between hotel stays and long-term leases. Whether you’re looking for a place to stay for just a few days or an extended stay, they both provide an affordable way to rent a furnished apartment without having to commit to a long-term contract.

The key difference is that while short-term rentals require guests to commit to their booking dates, on-demand housing allows them to extend their stay as many times as they need with no long-term commitment. Ultimately, the choice between a short-term rental and an on-demand housing booking depends on how much certainty you have around your plans.

Is Lodgeur available for short-term rentals?

Yes! Lodgeur opens up its booking calendar for short-term rentals within the next two weeks. If you’re coming to Midtown Houston or the Texas Medical Center, check out our stylish furnished apartments at Mid Main Lofts and Elan Med Center.

Top Safety Features to Look for in Furnished Apartments

finger and fingerprint
Lodgeur uses state-of-the-art tech-based and physical security measures to improve security for all guests in the building.

If you’re considering a furnished apartment for your next travel assignment, there are some important safety features to look for. Every furnished apartment should have deadbolts, sprinkler systems, and conduct fire safety drills. Those are table stakes.

Lodgeur’s founder was interviewed by Nurse Journal about safety and security for solo travelers renting furnished apartments. In 2023, these are the safety features every furnished apartment should offer:

Tech-Based Security Measures

1 – Super smart criminal background checks. (They deter more guests than you would expect.)

ID verification screen
Lodgeur’s ID verification with Autohost.ai.

Having hosted thousands of solo travelers, we know that robust criminal background checks are an important factor when you choose where to stay and the communities in which we operate all require criminal background checks for guests and staff.

You want to be sure the other guests have been screened and that any staff in the building have been screened. Your furnished apartment provider should use a robust background screening tool to check for as many domestic and international criminal record databases as possible.

Lodgeur uses Autohost.ai, which checks 280,000+ databases across the US, Canada and global resources! These databases include everything from sex offender registries to alias and identity cross checks.

We sometimes have guests cancel their bookings as soon they need to provide their ID for the background check and that’s ok! Strong security systems deter bad actors before we even screen them out. Hosts that don’t require background checks become magnets for the guests with a criminal background, placing everyone in the property at risk.

2 – Super smart key boxes

keycafe digital key box
Lodgeur uses digital key boxes.

Lodgeur stores the keys to furnished apartments in a Keycafe digital lockbox that each user opens with a unique code. The technology is so good that Mercedes-Benz and Toyota dealerships use it for car keys.

When a customer books with Lodgeur, our technology creates a unique code that corresponds to that specific booking. This system offers important security measures:

  • The code won’t work before or after your booking. This means past guests cannot return and access the keys to your apartment.
  • Your code will not be generated until the criminal background check comes back clean, so you don’t need to rely on a human to perform the checks before anyone else picks up their keys.
  • Each time guests or staff access a set of keys, our system logs the access automatically, so we always know when keys are picked up or returned – and by whom.

3 – Privacy-compliant noise monitoring

Good hosts ensure that their noise-monitoring equipment is privacy compliant. Technology like Noiseaware ensures that no speech or sounds are captured, but decibel levels are monitored.

This technology maintains your privacy while deterring partiers from booking the apartment next door to you. We’ve even used the decibel logs to prove our guests did not have an unauthorized barking dog!

Physical Security Measures

4 – Enclosed parking garages

parking garages
Lodgeur’s furnished apartments have attached, enclosed parking garages.

With a gated parking garage attached to your apartment community, you’ll enjoy the added layer of security that comes with restrictive access via key fob entry. Most of our guests bring a car, even if they use the METRORail or a scooter to commute to work. (See our post about using the METRORail.)

While guests appreciate the convenience of keeping their car cool in the Houston summer or dry during a thunderstorm, the parking garages provided increased security for guests and staff. The security cameras and direct building access are especially popular with solo travelers.

5 – In-house cleaning and operations teams

hands cleaning

Some hosts use apps to find cleaners or other errands-runners, without ever meeting these service providers. This can be a safety risk. In-house teams that are hired, trained and managed by the property manager help ensure service providers have been properly vetted.

Lodgeur reduces risk by having a trusted, in-house cleaning and operations team. Most of our cleaners have been with us since we started 2019, and have prepared apartments for more than 5,000 guests! We believe it’s good business to know who has access to our guests and our apartments.

Why we think security is so important

At Lodgeur, we understand that feeling safe in your home is important. We also host a lot of solo travelers in our furnished apartments, such as travel nurses, patients in the Texas Medical Center and summer interns. That’s why we only operate in Houston’s best apartment communities and we’ve implemented additional tech-based security measures to give our guests peace of mind.

Safety should be your number one priority when looking for a furnished apartment. Make sure to ask about the safety features that are included in each rental. Lodgeur uses sophisticated background check platforms, key access management, noise monitoring, along with trusted, in-house staff and gated parking garages to ensure our guests feel safe and secure while they’re away from home.

How to save money on your next extended stay

internet research on a bed

Save hundreds of dollars a month on your extended stay with Lodgeur’s easy tips.

We previously wrote about Airbnb’s fees and how quickly they increase the cost of your stay. At Lodgeur, 75% of our room nights are rented by extended-stay guests and we’ve developed a quick list of tips to save money on your next extended stay.

Hospitality taxes add 17% to your booking in Houston

Depending on the city and length of stay, hospitality taxes can dramatically increase the cost of your booking. In Houston, taxes add 17% to the cost of a booking of less than 30 nights, and Lodgeur is required by law to collect these taxes.

If you see ‘Occupancy taxes and fees’ listed on Airbnb (or another booking website), check to see if your total stay cost goes down when you increase your stay to 30 nights. In fact, booking a stay of 30 nights with us on Airbnb is actually 15% cheaper than booking 27 nights once you add up the monthly discount, the service fee discount, and the occupancy tax waiver.

On the stay of 30 nights then, the guest will have paid $2,775 and Airbnb collects $341 between the host and the guest, which is equivalent to 13.6% of the actual cost charged by the host of $2,509 (of which it receives $2,434).

Unfortunately Airbnb’s system doesn’t flag this to guests, but Lodgeur usually sends guests a message to allow them to extend their stay to save on their overall booking cost.

reservation charts and prices
Screenshots from Airbnb showing the cost of booking 27, 28, or 30 nights.

Airbnb service fees add hundreds of dollars to extended stay bookings each month

Airbnb’s service fee adds 10.6% to the cost of an extended stay, adding hundreds of dollars to the monthly rental cost. If you were going to book a place to live on Airbnb for a year, you could get six weeks free by booking directly with us, the operator. Our longest stay to date, by the way, is a whopping 371 nights. And our average extended stay guest spends 70 nights with us, which would include $667 of service fees if booked on Airbnb.

The truth is, Airbnb has captured the market for extended stays because people don’t know where else to book a place for a few weeks or months. There is no dominant mid-term stay website that has the same brand recognition or reputation as Airbnb.

But why would you continue to keep paying Airbnb each month? Some people do, but many guests will prefer to book direct, particularly if the host is a professional operator that has the capability of processing direct bookings.

man standing in the kitchen
Move in to a furnished apartment with just your suitcase. You’re ready to cook dinner and get a good night’s sleep as soon as you pick up the keys.

How can I save money on my next extended stay?

  1. Stay longer. If your stay is more than 25 nights, consider whether extending your stay to 30 nights will save you money. The 17% hospitality taxes don’t apply to a stay of 30 nights, so many of our guests save money by extending their stay a few nights.
  2. Book direct. Most of Lodgeur’s guests book directly on our website, saving the booking fees (up to 20%) charged by Airbnb, VRBO, or other third-party websites. When you book directly with Lodgeur, you won’t be charged for those fees.
  3. Skip the car rental. Our Midtown location is in one of Houston’s most walkable neighborhoods, directly on the METRORail line to Downtown, the Museum District, the Texas Medical Center, and NRG Arena (for Houston Rodeo fans!). Our Elan Med Center location is across the street from MD Anderson Cancer Center, and residents often get around TMC by wheelchair (complimentary) or scooter (not included).

About Lodgeur

Lodgeur provides flexible, furnished apartments for guests whose lives don’t fit into neat 12-month sprints. We offer great apartments that feel like a home, without hidden fees.

Book an extended stay with Lodgeur.

An apartment furnished by Lodgeur.
Lodgeur’s apartments come fully furnished with bespoke designs.

Airbnb wants to be your next landlord. Should you let them?

AirBnB has become a leading platform to find extended-stay homes. Image courtesy of Tierra Mallorca.

Airbnb’s CEO has claimed he wants to be your next landlord. But does that make sense? We don’t think so, because of Airbnb’s high fees.

Airbnb’s fees make sense for shorter stays, but not for extended stays (28+ nights), which make up to 25% of the nights Airbnb sells each quarter. The reason for this disconnect is that its service fees are too high compared to the value it brings as an intermediary to hosts and guests on these longer stays.

Background: Airbnb has once again reported that a substantial part of its bookings come from extended-stay guests (those staying 28 nights or more). Since 2020, the total number of room nights booked as extended stays has averaged between 15.5-16m each quarter, representing 19-24% of total nights booked on the platform (or the equivalent of nearly 176,000 listings occupied full time). And in certain markets, the figure has been as high as 60%.

13. So basically, people aren’t just traveling on Airbnb, they’re now living on Airbnb

— Brian Chesky (@bchesky) November 9, 2021

Back in late May, a headline from The Verge caught our attention: ‘Airbnb’s CEO thinks the platform can replace your landlord’. In the article, Airbnb’s CEO Brian Chesky said that deposits, long-term leases, and proof of income are outdated.

>
“I think eventually in the future people will start paying for rent the way they pay for cable television, or for Netflix, you pay on a month-to-month basis”

— Brian Chesky

And we totally agree with this.

In fact, this is the foundation of our company’s thesis: residential real estate (especially apartment living) isn’t aligned to pillars of the 21st-century economy such as flexibility, convenience, and asset-light lifestyles. But that’s a story for another day.…

Why Airbnb won’t be your next landlord

That headline from The Verge has been bugging us for six months now, so it’s time for me to get it off our chest…

Let’s be clear on two things:

  1. Airbnb won’t replace your landlord. It’s like your realtors, apartment locators, or leasing agents since it takes a commission from the property owner for finding a renter.
  2. Airbnb needs to change its pricing model. It needs to change its pricing model to capture this market and likely expand its monetization model.

In this article, we’ll dive deeper into our rationale, based on our experiences running Lodgeur, where 75% of our room nights are rented by extended-stay guests.

How Airbnb makes money

Airbnb makes money primarily by charging a service fee to hosts and guests. This fee is predominantly paid by the guest, adding on average 14.2% to their cost, and 3% by the host (in a few markets, only the host pays the fee, and in others, they can elect to pay the whole fee).

From analysis on our own listings, the average guest service fee is a smidge above 14.1%, but drops by a quarter if you book stays of 28 nights or more, to 10.6% or so. In other words, Airbnb can expect to receive 17.1% of the rent and fees charged by the host on short stays and 13.6% on extended stays. The guest may also pay local occupancy taxes, depending on the market and length of stay.

28 nights is also the magic number at which monthly pricing discounts (if offered by hosts) kick in. But a word of advice – if you see ‘Occupancy taxes and fees’ listed, these are often waived at the 30-night mark (depending on the local county, city, and state – we collect three sets of taxes in Houston). Unfortunately Airbnb’s system doesn’t flag this to guests, but we let them know manually. In fact, booking a stay of 30 nights with us is actually 15% cheaper than booking 27 nights once you add up the monthly discount, the service fee discount, and the occupancy tax waiver.

On the stay of 30 nights then, the guest will have paid $2,775 and Airbnb collects $341 between the host and the guest, which is equivalent to 13.6% of the actual cost charged by the host of $2,509 (of which it receives $2,434)

reservation charts and prices

Screenshots from Airbnb showing the cost of booking 27, 28, or 30 nights

The core value of Airbnb’s platform is brokering trust

Our research has shown that while Airbnb provides value by making it easier for guests to find a place to stay and for hosts to attract these guests, the key value it sells to each side is trust.

That’s because using a marketplace platform such as Airbnb involves asymmetric information and risks, made worse by the presence of non-accredited individuals and companies (versus hotels). Adverse selection (famously described as the ‘lemons’ problem when buying a used car by Nobel prize-winning economist George Akerlof) arises when information asymmetries arise in a market. This is made worse in markets where consumers cannot inspect the quality of a service/product prior to purchase.

For experiential products such as booking accommodation, there is a high cost of failure. You can return a faulty product, but you can’t return a bad experience. The risk stretches beyond poor quality accommodation, with crime and a risk to personal safety in extreme cases.

That’s why Airbnb goes to great lengths to help build trust and accountability between potential guests and hosts through a variety of design elements (there’s even a TED talk from Joe Gebbia, co-founder of Airbnb on the subject).

man sitting on the floor with laptop

Top-notch reviews, a professional hosting team and a 14-day termination policy provide Lodgeur’s guests with confidence to book directly.

The value of Airbnb’s service rapidly diminishes the longer you stay

The question is, what is the value of this peace of mind provided by Airbnb?

To answer this, take a second to think about a bad experience you’ve had with booking accommodation, be it a hotel or short-term/vacation rental.…

How soon did your gut tell you that there was something wrong?

  • Was it as you were pulling up to a property lacking curb appeal in a dodgy neighborhood?
  • When you first walked in and saw that the property’s condition didn’t match the photos?
  • Or after a restless night on an uncomfortable bed being kept awake by excessive noise?

Our guess is that for most people, your mind was made up within the first 24-hours or less.

On a short stay of a few nights, you probably don’t mind a portion of your fees going towards peace of mind – say $40? But on an extended stay, how much are you prepared to pay on an ongoing basis once you’re satisfied with the quality of the product?

Airbnb’s service fee adds 10.6% to the cost of an extended stay, adding hundreds of dollars to the monthly rental cost. If you were going to book a place to live on Airbnb for a year, you could get six weeks free by booking directly with us, the operator. Our longest stay to date, by the way, is a whopping 371 nights (and counting!). And our average extended stay guest spends 70 nights with us.

The truth is, Airbnb has captured the market for extended stays because people don’t know where else to book a place for a few weeks or months. There is no dominant mid-term stay website that has the same brand recognition or reputation as Airbnb.

But why would you continue to keep paying Airbnb each month? Some people do, but many guests will prefer to book direct, particularly if the host is a professional operator that has the capability of processing direct bookings.

How can I save money on my next stay?

Read our follow-post here for some easy tips to save money on your next stay.


About Lodgeur

Lodgeur provides flexible, furnished apartments for guests whose lives don’t fit into neat 12-month sprints. We offer great apartments that feel like a home, without hidden fees.

Book an extended stay with Lodgeur.

A furnished apartment

A furnished apartment designed by Lodgeur in Houston

Why on-demand housing better suits a digital nomad’s lifestyle

In our experience, most rental communities in Houston mainly offer bare-bones, unfurnished units with long-term lease requirements. At best, a newcomer to America’s fourth-largest city will find short-term leases around 8-months long, but this duration isn’t the norm. Usually, we see apartment leases of 12 months or longer in the Greater Houston area, depending on the type of community it is.

But today, modern Houstonians’ lifestyles don’t fit neatly into 12-month blocks and 9-to-5 workdays.

Here, you can accomplish anything if you work hard enough, stay focused on your career ambitions, and then – put in more work and more work until you’ve built the life you’ve always wanted. In Houston, anyone can rise, launch a lucrative career, and Be Someone, as the city’s unofficial mural-inspired motto says.

Add the harrowing hustle and bustle of metropolitan life to the 21st-century tech boom, and you get a perfect environment for a new type of remote worker to thrive – the digital nomad.

Nowadays, it’s easier than ever to work from home or anywhere that’s comfortable and quiet enough to focus. While the pandemic certainly accelerated the trend, the shift towards nomadic lifestyles has been a long time coming.

So, with that in mind, we’ve put together a brief snapshot of how digital nomads in Houston live, work, and how they’re able to stay mobile with flexible housing options.

The digital nomad experience in Houston

In a major U.S. city like Houston, it helps to have an idea of what to expect when you first come to town.

For many, what’s most striking about Houston – aside from its sheer size – is the diversity of the people and the variety of communities in tucked-away hamlets like Rice Village, Montrose, and The Heights. But for an affordable, walkable neighborhood in the nation’s 4th largest city, it’s hard to beat bustling Midtown with its mix of restaurants, nightlife and theaters. And that’s precisely the vibe that attracts digital nomads to Houston.

The terrible irony of the digital nomad’s lifestyle is that it’s a hassle to find a good place to lay your head at a reasonable price. Digital nomads tell us that they like their old apartments back home, but they feel like they’re paying too much for how long they actually want to use the property. According to one guest, “I’d prefer flexible housing over my current situation where I’m tied to my lease for the next ten months or so when I don’t really need to be at this point in my career.”

Top benefits of booking on-demand housing for long-term stays

Usually, the renter’s experience is pretty minimal in Houston. In our experience, many often develop a case of renter’s remorse after the community they thought were joining turns out to be something else entirely.

So how does that happen in a major U.S. city?

Overall, the rental community leasing process in Texas goes like this: renters sign paper leasing documents in an office setting, handshakes, and smiles go around, you get the keys – and that’s the end of it.

You only get an unfurnished, empty apartment with no utilities and no internet connection. Then you have to set up the entire living space on your own, which can take several days even if you have help from friends and family.

Still, the Houstonian renter’s adventure isn’t over yet! Shopping for, buying, and assembling furniture comes next, followed by dealing with movers, boxes and taking the time to make your new home feel like it’s yours.

It’s time-consuming; it’s a hassle, and that’s the bottom line.

But on-demand housing solves all of those problems, and here’s how.

Say goodbye to lease agreements

When you book a stay with Lodgeur, you’re choosing on-demand housing instead of along-term lease.

With our online platform, you choose the dates that meet your needs without having to book weeks or months in advance.

And while most places require 30 days notice when you’re ready to move, Lodgeur requires just a 14 days notice.

So there’s no need to get yourself locked into a 12-month lease (or a day of setting of setting up utilities and internet) when you have more flexible housing accommodations with Lodgeur.

Embracing turnkey living means less work for you

Our on-demand housing options include fully furnished apartments that are spotless when you get the keys. Our staff makes the bed, stocks the kitchen with the proper utensils, and even sets up utilities on your behalf.

Another curious fact about Houston’s rental market is not many places offer bundled utilities. Typically, an apartment locator will recommend certain providers but not always. Many renters have to go out and find electricity and water services.

But we offer turnkey residences and handle all of the details behind the scenes, so you can step into your new place happily and breathe a sigh of relief when everything is already in order.

Soften environmental impact

Without a doubt, sustainable living goes hand-in-hand with a digital nomad’s lifestyle.

Like the hunters and gatherers of ancient times, a true digital nomad has learned to reduce the environmental impact of their lives to the bare minimum.

For instance, many weathered nomads don’t own cars, choosing to use ride-share services or public transportation to get around the city’s most congested areas.

Today, so much of our lives have become service-driven, from online shopping on Amazon to digital streaming subscriptions and hotel booking apps. Why can’t modern housing offer the same convenience as those on-demand services? Certainly, nothing is holding back the seismic shifts in the way we live and work in Houston.

Rather than spend the time collecting housewares and possessions you don’t plan on keeping, you can choose fully furnished apartments with no lease commitments and pre-connected utilities.

Simply put, on-demand housing ultimately becomes something in between the privacy of an apartment community and the service of a hotel.

Why Airbnb has a pricing problem, and what to do about it

Airbnb has a pricing strategy problem on extended stays (28+ nights), which make up to 25% of the nights it sells each quarter. The reason for this disconnect is that its service fees are too high compared to the value it brings as an intermediary to hosts and guests on these longer stays.

That may impact its ability to capture $210bn in long-term stays as stated in its IPO prospectus ($48bn in the serviced apartment/corporate housing segment and $162bn or 10% of traditional real estate rentals).

Airbnb has once again reported that a substantial part of its bookings come from extended-stay guests (those staying 28 nights or more). In market updates since Q3 2020, the total number of room nights booked as extended stays has averaged between 15.5-16m each quarter, representing 19-24% of total nights booked on the platform (or the equivalent of nearly 176,000 listings occupied full time). And in certain markets, the figure has been as high as 60% (our own data would support this, as we’re running at 75%).

Back in late May, a headline from The Verge caught our attention: ‘Airbnb’s CEO thinks the platform can replace your landlord’. In the article, Airbnb’s CEO Brian Chesky said that deposits, long-term leases, and proof of income are outdated.

I think eventually in the future people will start paying for rent the way they pay for cable television, or for Netflix, you pay on a month-to-month basis

And we totally agree with this.

In fact, this is the foundation of our company’s thesis: residential real estate (especially apartment living) isn’t aligned to pillars of the 21st-century economy such as flexibility, convenience, and asset-light lifestyles. But that’s a story for another day…

Why Airbnb won’t be your next landlord

That headline from The Verge has been bugging us for six months now, so it’s time for me to get it off our chest…

Let’s be clear on two things:

  1. Airbnb won’t replace your landlord. It’s like your realtors, apartment locators, or leasing agents since it takes a commission from the property owner for finding a renter.
  2. Airbnb needs to change its pricing model. It needs to change its pricing model to capture this market and likely expand its monetization model.

In this article, we’ll dive deeper into our rationale, based on our experiences running Lodgeur, where 75% of our room nights are rented by extended-stay guests.

How Airbnb makes money

Airbnb makes money primarily by charging a service fee to hosts and guests. This fee is predominantly paid by the guest, adding on average 14.2% to their cost, and 3% by the host (in a few markets, only the host pays the fee, and in others, they can elect to pay the whole fee).

From analysis on our own listings, the average guest service fee is a smidge above 14.1%, but drops by a quarter if you book stays of 28 nights or more, to 10.6% or so. In other words, Airbnb can expect to receive 17.1% of the rent and fees charged by the host on short stays and 13.6% on extended stays. The guest may also pay local occupancy taxes, depending on the market and length of stay.

28 nights is also the magic number at which monthly pricing discounts (if offered by hosts) kick in. But a word of advice – if you see ‘Occupancy taxes and fees’ listed, these are often waived at the 30-night mark (depending on the local county, city, and state – we collect three sets of taxes in Houston). Unfortunately Airbnb’s system doesn’t flag this to guests, but we let them know manually. In fact, booking a stay of 30 nights with us is actually 15% cheaper than booking 27 nights once you add up the monthly discount, the service fee discount, and the occupancy tax waiver.

On the stay of 30 nights then, the guest will have paid $2,775 and Airbnb collects $341 between the host and the guest, which is equivalent to 13.6% of the actual cost charged by the host of $2,509 (of which it receives $2,434)

Aibnb

Screenshots from Airbnb showing the cost of booking 27, 28, or 30 nights

The core value of Airbnb’s platform is brokering trust

Pricing is probably our founder’s favorite ‘P’ of the traditional 4Ps marketing framework because it is so often overlooked. He loved it so much that his master’s thesis at the University of Cambridge focused on consumers’ marginal willingness to pay in short-term rentals. His research showed that while Airbnb provides value by making it easier for guests to find a place to stay and for hosts to attract these guests, the key value it sells to each side is trust.

That’s because using a marketplace platform such as Airbnb involves asymmetric information and risks, made worse by the presence of non-accredited individuals and companies (versus hotels). Adverse selection (famously described as the ‘lemons’ problem when buying a used car by Nobel prize-winning economist George Akerlof) arises when information asymmetries arise in a market. This is made worse in markets where consumers cannot inspect the quality of a service/product prior to purchase.

For experiential products such as booking accommodation, there is a high cost of failure. You can return a faulty product, but you can’t return a bad experience. The risk stretches beyond poor quality accommodation, with crime and a risk to personal safety in extreme cases.

That’s why Airbnb goes to great lengths to help build trust and accountability between potential guests and hosts through a variety of design elements (there’s even a TED talk from Joe Gebbia, co-founder of Airbnb on the subject).

No on wants to stay in an Airbnb like this…

The value of Airbnb’s service rapidly diminishes the longer you stay

The question is, what is the value of this peace of mind provided by Airbnb?

To answer this, take a second to think about a bad experience you’ve had with booking accommodation, be it a hotel or short-term/vacation rental…

How soon did your gut tell you that there was something wrong?

  • Was it as you were pulling up to a property lacking curb appeal in a dodgy neighborhood?
  • When you first walked in and saw that the property’s condition didn’t match the photos?
  • Or after a restless night on an uncomfortable bed being kept awake by excessive noise?

Our guess is that for most people, your mind was made up within the first 24-hours or less.

On a short stay of a few nights, you probably don’t mind a portion of your fees going towards peace of mind – say $40? But on an extended stay, how much are you prepared to pay on an ongoing basis once you’re satisfied with the quality of the product?

Airbnb’s service fee adds 10.6% to the cost of an extended stay, adding hundreds of dollars to the monthly rental cost. If you were going to book a place to live on Airbnb for a year, you could get six weeks free by booking directly with us, the operator. Our longest stay to date, by the way, is a whopping 282 nights. And our average extended stay guest spends nearly 70 nights with us.

The truth is, Airbnb has captured the market for extended stays because people don’t know where else to book a place for a few weeks or months. There is no dominant mid-term stay website that has the same brand recognition or reputation as Airbnb.

But why would you continue to keep paying Airbnb each month? Some people do, but many guests will prefer to book direct, particularly if the host is a professional operator that has the capability of processing direct bookings.

You’d be dancing in your living room too, if you saved hundreds of dollars a month

How should Airbnb change its pricing and monetization strategy?

If Airbnb wants to capture 10% of the long-term rental market for real estate, what needs to happen to its pricing? The simple answer is that it needs to drastically reduce its service fees in accordance with the length of stay. The service fees for both the host and guest need to become so low that it’s not worth the low friction switching costs of booking direct.

What does that service fee burden look like? Well, if apartment landlords are willing to pay a locator one month’s rent and the average tenant stays two years, then that’s equivalent to 4.2%. And remember, the locator is probably spending a few hours accompanying you on various in-person visits, so their costs are far higher than Airbnb’s costs. I think therefore Airbnb needs to aim to get its service fee down to 3% or less for both the host and guest: a total of 6%.

There are a number of ways that it can achieve this, namely by reducing costs, increasing revenues through ancillary products, and by increasing the value of its product.

For example, Airbnb can reduce costs by encouraging a switch of ACH payments or charging a fee for credit card payments. It can earn a commission by offering supplementary insurance products for both parties, from renters’ insurance for guests to home insurance for hosts (they’d also love to see a squatter protection product). It can increase the value of its service by providing a positive rental history and contribute to the guest’s credit history – something potentially very important for international guests who don’t have a credit score and find it very difficult to lease a traditional apartment.

Essentially, Airbnb needs to take a wider perspective of ways to monetize its relationships with both guests and hosts, which we think will come by taking on more of a fintech mindset. And who knows, maybe it can even eliminate the service fee entirely!

While Airbnb has received its fair share of criticism from the hosting community (and is still viewed negatively by many in real estate circles), we are a big fan of the customers it brings to Lodgeur. We don’t mind paying the 3% host service fee, but it gives us a real knot in our stomachs when we see the fees that our extended stay guests pay them, especially those who chose to extend their stays for multiple months. Unfortunately, Airbnb’s terms of service prohibit us from soliciting their business directly, but hopefully, consumers will start to question the economics of booking through online travel agencies such as Airbnb and instead vote with their wallets by booking direct.


About Lodgeur

Lodgeur helps apartment operators boost their occupancy and NOI. We turn empty units into flexible furnished rentals and manage them to attract a new type of resident.

Find out more about partnering with Lodgeur.

A furnished apartment designed by Lodgeur in Houston

A furnished apartment designed by Lodgeur in Houston

Skip to content