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Ben Cronin | Airbnb deal demonstrates soft power of the Olympics

Ben Cronin

For an organisation often criticised for failing to move with the times, the International Olympic Committee has proven itself particularly adept at attracting Big Tech sponsors.

Earlier this week, global accommodation marketplace Airbnb took its place alongside companies like Alibaba and Intel in the organisation’s TOP partner programme, signing a nine-year deal estimated to be worth $500m (€452m/£386.4m) when accounting for value-in-kind.

IOC president Thomas Bach has been talking up the synergies between the two parties, suggesting the tie-up with the San Francisco company will address some of the organisation’s most intractable problems. He argues that the IOC’s promise to divert some of the fee into free accommodation for athletes and executives – and encourage more urban residents to rent their homes to fans visiting the Olympics – aligns perfectly with Agenda 2020’s ambition to make the Games a more sustainable proposition for host cities.

Although Bach didn’t make it explicit, the news that athletes will be able to sell ‘Airbnb Experiences’ on the platform appears to be a well-timed attempt to address criticisms that its Rule 40 marketing restrictions limit earning opportunities for Olympians.

The deal has an undeniable logic on a number of other levels. The bid races for the 2024 and 2026 Summer and Winter Olympics showed increasing public scepticism about the benefits of the Games, with the denizens of several major cities voting against the IOC in a series of referendums.

Aside from being a sop to athletes, the promises to spend $28m on free stays on the platform and to create “hundreds of thousands of new Airbnb hosts” could create similar numbers of public advocates for the Games. Voting citizens will be more likely to tick the box marked ‘yes’ if they stand to benefit directly from the inflated demand for accommodation typically seen during the Olympic fortnight.

But, as with most stories about the sharing economy, there are losers as well as winners in the agreement.

The angry response of French hoteliers and Paris mayor Anne Hidalgo to the deal suggests the IOC might have earned the goodwill of two powerful lobby groups at the expense of others.

Hidalgo argues that the platform contributes to rising rents by removing a significant number of properties from the Paris rental market. French hoteliers have threatened to suspend their help in organising the 2024 Olympics, claiming the company exploits regulatory loopholes to undercut the hotel industry.

The hotel trade isn’t a lobby group to be taken lightly, although it is arguably less powerful than it used to be. At one stage hotel operators used to make the largest contribution to the tourism bodies that traditionally lead a bid for the Olympics. Visit London, a previous iteration of the body that promotes the British capital as a tourist destination, was at one time almost exclusively financed by the hotel trade.

One of the largest demands placed on host cities as a condition for bidding for the event is the requirement to block-book a segment of their hotel bed stock at pre-agreed rates for the Olympic fortnight. In threatening to withdraw their support, French hoteliers have the power to remove one of the assets promised by the Paris 2024 bid book.

Some would argue that this is the organising committee’s problem and that the IOC’s remit doesn’t include setting the rental accommodation regulations in host cities.

The most likely resolution to the French stand-off is that the hoteliers will trade on their support for the Paris bid to extract tougher legislation against holiday rental sites in the city. In this it could look to the efforts of London planning restrictions that limit short-term rentals to no more than 90 nights a year, or New York regulations that make it illegal for people to list entire apartments for more than 30 nights.

If nothing else, the Airbnb story bears testimony to the soft power brands acquire when they align themselves with the Olympics. Like the French hoteliers, you can also expect Airbnb to extract its pound of flesh.

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