Why Airbnb is unpopular in Nigeria

Image of unoccupied houses
Unoccupied houses in Nigeria

In highbrow parts of Lagos, Abuja, Port Harcourt and other major cities, there are thousands of houses that are unoccupied, despite the fact that Nigerian government badly needs to house close to half of its population. These houses are usually exorbitantly priced, beyond the reach of many. Some may say that these houses are built with proceeds of corruption but that is not my concern here. Even if the house is the result of ill-gotten wealth, that shouldn’t stop it from generating economic value, especially when there are technologies now that make it possible for homeowners to make money from their unoccupied houses without the need for long-term agreements.

What am I talking about? Airbnb.

Logo of Airbnb
Airbnb logo

WHAT IS AIRBNB?

Standing for ‘Air-bed-and-breakfast’, Airbnb is an online marketplace for homeowners who are willing to let out their houses or a part of their houses to tourists who need a place to stay and working class people who need a place to live. Think of it like the Uber for housing. With Airbnb, every homeowner is a mini-hotelier. You can make some passive income with the empty room in your house. Homeowners are free to set their price which is however subject to Airbnb’s commission. Like Uber and Taxify, both host and guest can rate each other at the end of the stay. Airbnb also provides a guarantee for homeowners, up to the tune of $1 million (roughly N360 million) for any damage done to their property by their tenants.

 

WHY IS AIRBNB UNKNOWN IN NIGERIA

With all this in mind, to what extent is Airbnb non-existent in Nigeria? This response from Frances, a recent Airbnb user in Nigeria says it all:

‘Whenever I tell a fellow Nigerian I was staying at Femi’s Airbnb in Lekki, the response was, ‘We have Airbnb in Lagos’?

 

Airbnb operates in Lagos, Ibadan and Abuja, allowing guests to rent apartments for as little as $11 (roughly N3,960) per night for a private room. In some cases, it can go as high as $135 (roughly N48,600) per night for an entire apartment. With respect to Lagos, most of the listed homes are on the island, Magodo and Ikeja Government Residential Areas.

You may have never used Uber or may have used it only once, but you’ve surely heard of it. How can Airbnb be less ubiquitous?

Trust. Nigerians simply don’t trust online platforms enough to give their money. Despite the fact that we live in an age of Jumia, Konga, and so many online marketplaces, most Nigerians (including the author) still have a “cash-and-carry” mentality. Paying online for goods and services that we cannot physically touch and feel is not possible for Nigerians. Uber and Taxify learnt this lesson fast enough and today, generally allow users to pay with cash. In many other climes where they operate, this is strictly banned. This is what Airbnb has failed to do. It has refused to adapt to circumstances unique to Nigeria.

This is not to say that with time, Nigerians will not catch up with the rest of the world in accepting online mediums of payment as conventional, but till then, cash is King.

Airbnb and all other potential competitors should take note.

By Akin Agunbiade, Chief Research Officer at DGL Research

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