Sharing Economy vs Roaming Bills

Sharing economy is gaining momentum and today renting an apartment or a room through Airbnb for your vacation is a common practice. People are using such services as BlaBlaCar and Uber to get from one place to another. There are many more other applications and services that allow you to save money with shared use of material comforts without any loss in quality.

We at AVO also strive to improve the lives of our users by offering them an inexpensive and convenient solution for international roaming. But some of our users have trouble buying local SIM cards when they travel. More often than not this is either a language barrier problem or lack of knowledge of the local mobile market, which turns the simple SIM card purchase into a real quest demanding lots of time and effort.

We have several solutions just for such cases, but however much we try, we can’t offer a better price than the local mobile operators. So, we decided to check whether the sharing economy will be able to help our users with this problem.

The idea was simple: to test how open Airbnb hosts would be to the idea of such additional service as a purchase of local SIM card for their guests. Such service may be profitable not just to the guests and the hosts, but to Airbnb itself if it creates a relevant payment mechanism for this service.

We chose 5 cities (Paris, Barcelona, London, Moscow New York) that we believe to be the most popular tourist destinations, and conducted the experiment.

It was rather simple:

1) We selected a city

2) We set the arrival date in 2 months and the stay period at 10 days

3) We set the desired price at 30% below average (both for separate rooms and for whole apartments)

4) We wrote to the first 10 hosts on the list (both for separate rooms and for whole apartments) a message that went something like this:

Hi,

I’m planing to visit <city>. It would be great if you could host me.

I like to travel and meet new people, and I’m crazy about music.

Will you be able to provide me with a local SIM card with 1-2 Gb data plan? I’ll pay extra for it.

and waited for the answers.

5) We processed the received answers and put them into an aggregate table.3499m51

If the owner wrote that he’ll be happy to host us and that it won’t be a problem to provide us with a local SIM card or asked what kind of SIM card (micro, nano) we required, we considered such answer a YES and gave it 2 points.

If the answer was something along the lines of “There’s a store nearby, where SIM cards are easily bought; we’ll help you/show you” or “SIM card can be bought right at the airport, it costs this amount of money,” we considered such answer a MAYBE and gave it 1 point.

If the answer was definitely negative, it was a NO and minus 1 point.

There were also those who didn’t answer at all or who told us that the room/apartment will be busy during the period, and these were the NO ANSWER with 0 points.

By summing up the points, we compiled an index of sorts, which allows us to evaluate the owners’ readiness to buy the SIM cards, and we called it a SIM-Index. To give you a complete picture, we also included the percentage of positive answers (YES and MAYBE). For each city we calculated both the aggregate SIM-Index and percentage of positive answers, and separate SIM-Indices for those who are renting out rooms and apartments.

SIM-index

As the table shows, people in Moscow and Barcelona demonstrated the greatest willingness to provide a local SIM card for their guests. Paris came in third. Hosts from London and New York were the least obliging.

At the same time, it was in New York that we saw the greatest gap between apartment rental SIM-Index and room rental SIM-Index. Those who rented out separate rooms gave us the largest number of refusals (although half of them were in the MAYBE category), while those who rented out whole apartments were much more accommodating. Interestingly enough, it was the other way around in Moscow where the greatest positive response rate was registered with room owners.

The goal of our experiment was to prove that for a rather large number of hosts who rent out their rooms or apartments through Airbnb or other such services (booking.com, theapartmentservice.com, athomeabroadinc.com, greatrentals.com, rentalo.com), provision of local SIM card to their guests is not a problem, especially if they can earn some extra cash from this.

What now? Now we have to prove that the guests would also be interested in such a service. According to Vodafone’s information, 26% of business travellers prefer to buy local SIM cards, and we’re convinced that the share of Airbnb users doing the same is no less than that number.

What’s in it for Airbnb? Well, they would create additional value for their users simultaneously increasing the size of the average check. We see two ways to implement this service:

  1. The owners specify that they could provide their guests with local SIM cards and indicate the price. While making a reservation, the guests would select whether they want this service. The cost of the SIM card will be included in the total cost of the apartment and Airbnb will get its commission off that.
  2. Airbnb signs a partnership agreement with a SIM card provider who will deliver the said cards either to the guests’ home address (before the trip) or to the rented apartment upon the guests’ arrival. In this case Airbnb’s commission can be much higher, since it will be working directly with a vendor. At the same time it’s very important to choose the right provider and to avoid tourist SIM cards, going for the partners who can provide local SIM cards with local tariffs. By the way, AVO provides SIM cards for all of Europe, and the US, Canada and Asia are up next.

Other options include partnerships with services for travellers that require an internet connection. These can be tour apps, maps, recommendation services for restaurants and venues or apps such as AVO that allow users to keep and use their mobile number abroad without roaming charges.

We hope that in the near future hotel reservation and airline ticket services will take note of their users’ mobile troubles and in addition to insurance, transfers and car rentals will begin to offer them solutions for inexpensive mobile communications during the trips.

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