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Airbnb almost as expensive as a hotel, figures show

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Staying in an Airbnb rental may be only marginally less expensive than sojourning in a hotel, at least for small parties booking short-term stays, an analysis of short-term rental and hotel prices in Toronto shows. It may be part of the reason why guests are increasingly angered by the litany of fees included in their bookings.

In Canada’s most populous city, the average daily rate for a studio or one-bedroom apartment on the Airbnb platform in July was $214, according to AirDNA, a short-term rental data provider. That was $33 a day less than the $247 Toronto hotels charged on average during roughly the same period, according to data spanning July 1 to July 30 from STR, an analytics company focused on the hospitality industry.

The average rate for studio and one-bedroom rentals, which AirDNA considers comparable with hotel rooms, was up 44 per cent from $148 a day in July, 2019, during the summer before the onset of the COVID-19 pandemic. By contrast, the average daily rate paid by travellers staying in Toronto hotels rose by 24 per cent over the same four summers, up from an average of $199 in July, 2019, according to STR.

For Airbnb listings that include larger properties – but not shared accommodations – the average daily rate in July was nearly $300 a day, more than 50 per cent above average rates in July, 2019, the AirDNA numbers show. The data for short-term rentals does not include service fees, which can vary but often amount to an additional 10 per cent to 15 per cent, the company said.

Airbnb ABNB-Q has challenged some of the data, saying third-party analyses of its listings typically incur a number of issues, including possibly not accurately reflecting actual bookings or what guests paid.

The short-term rentals giant said the average daily rate for Airbnb accommodations in Toronto increased approximately 15 per cent between 2019 and the first six months of 2022. It did not provide dollar amounts for average daily rates.

Hotel-like prices may help to explain some travellers’ growing angst over the many fees guests must pay in addition to the base rate advertised on the platform.

“I don’t stay in Airbnb’s anymore,” U.S.-based Twitter user Michael Karnjanaprakorn recently wrote.

“Cleaning Fee: $200. Instructions: Clean the dishes, take out the trash, and wash all the sheets before you leave,” the tweet, which received more than 27,000 likes, reads.

In a press release last year, Airbnb addressed criticism over fees noting that users can see a detailed breakdown of potential charges prior to committing to a booking.

Cleaning fees are set by hosts based on factors such as the size of the home, location, amenities and the number of guests. “We believe that hosts having autonomy over their own pricing helps empower them to achieve success on our platform,” the company wrote.

Enhanced cleaning protocols because of COVID-19 might have also increased cleaning expenses for some hosts, the company noted.

Other fees include a service charge – usually under 14.2 per cent of the booking subtotal – collected by Airbnb, and occupancy taxes imposed by the government, the company said. (In Toronto, for example, Airbnb has been collecting a 4-per-cent municipal tax since the start of 2021.)

But Airbnb’s PR response has hardly appeased disgruntled guests. Travel expert Matthew Kepnes, for example, said he has forsaken Airbnb for good.

Mr. Kepnes, who runs the website nomadicmatt.com, argued Airbnb rentals are no longer a good deal for short-term stays, especially in large cities, where there are plenty of hotel options.

“If you’re just going to New York for three days, it doesn’t really make sense,” he said.

In part, that’s because fees can significantly add to the cost of a brief stay, according to Mr. Kepnes. In a tweet from February, 2020, he referenced an Airbnb listing with a $100-a-night base rate and a $200 cleaning fee. “These cleaning fees are so onerous. I might as well just stay in a hotel for that price!” he wrote.

Mr. Kepnes also has qualms with Airbnb’s customer service, which he said makes it hard to obtain refunds. That’s another point in favour of hotels, he argued.

Aside from costs, he also has ethical reservations about using short-term rentals in large metropolitan areas. In many big cities, services such as Airbnb are taking much-needed housing stock away from prospective homeowners and long-term renters, he said.

Still, Airbnb may be a good choice in more remote areas, especially when booking longer stays, he said.

A growing number of travellers may be coming to Mr. Kepnes’ conclusion about shorter versus longer bookings. Since the start of the pandemic, Airbnb has seen a surge of longer bookings. Stays of 28 days or more were up 25 per cent in the second quarter of 2022 compared with the same period in 2021, and nearly 90 per cent above levels recorded in the second quarter of 2019, the company said during its latest earnings release.

Bookings of around a month or more have become its fastest-growing trip type by length, Airbnb said.

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Porsche Is Going Public At €82.50 A Share, Valuing Company At €75 Billion – CarScoops

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Porsche is going public this week and shares will each be available for €82.50 ($79.89), priced at the top of the company’s targeted price range.

The initial public offering (IPO) will see the Volkswagen Group sell 12.5 per cent of the company’s non-voting shares in a move that will raise approximately €9.4 billion ($9.1 billion) and value the automaker at €75.2 billion ($72.8 billion). This will make it Germany’s second-largest listing ever.

No less than 911 million shares will be sold in Porsche and approximately half of the proceeds generated by the listing on Frankfurt’s stock exchange will be distributed to shareholders. The rest of the funds will be used to help fund VW’s transition to all-electric vehicles.

Read More: VW Banking On Porsche IPO To Fund Future Electrification Plans

“In the event of a successful IPO, Volkswagen AG will convene an extraordinary general meeting in December 2022, at which it will propose to its shareholders to distribute in the beginning of 2023 a special dividend of 49 % of the total gross proceeds from the placement of the preferred shares and the sale of the ordinary shares,” the Volkswagen Group described in a statement.

The IPO is going ahead despite the current volatile state of the stock market and widespread economic concerns.

“This [IPO] is a key element for the group, especially because the possible proceeds would give us more flexibility to further accelerate the transformation,” Porsche CFO Arno Antlitz added in a statement earlier this month.

Speaking with the media last week, the head of VW’s works council, Daniela Cavallo, noted that the carmaker could sell more Porsche shares in the future in order to raise additional funds.

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Canada's economy grew by 0.1% in July, bucking expectations it would shrink – CBC News

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Canada’s gross domestic product expanded by 0.1 per cent in July, besting expectations of an imminent decline, as growth in mining, agriculture and the oil and gas sector offset shrinkage in manufacturing.

Statistics Canada reported Thursday that economic output from the oilsands sector increased sharply, by 5.1 per cent during the month. That was a change in direction after two straight months of decline, which brought second-quarter growth to 4.2 per cent thus far. 

The agriculture, forestry, fishing and hunting sector led growth with 3.2 per cent. Unlike the United States and Europe, both of which are facing drought conditions, Canada has had a good year for crop production said Scotiabank economist Derek Holt. 

On the downside, the manufacturing sector shrank by 0.5 per cent, its third decline in four months. Canada’s export market with the United States has softened and global supply chain issues linger, said Holt. The latter are gradually easing, which could create a better picture for the sector in the second half of the quarter. 

Wholesale trade shrank by 0.7 per cent, and the retail sector declined by 1.9 per cent. That’s the smallest output for retail since December. 

“What happened this summer was a big rotation away from goods spending towards services spending,” Holt said. Activities like haircuts, travel or outings to the theatre, made popular with the lifting of pandemic restrictions, leave out retail.

While the economy eked out slight growth in July, the data agency’s early look at August’s numbers shows no growth.

“The economy fared better than anticipated this summer, but the showing still wasn’t much to write home about,” said economist Royce Mendes with Desjardins. “While the data did beat expectations today, the numbers didn’t move the needle enough to see a material market reaction.”

The performance of Canada’s economy throughout the fiscal year — 3.6 per cent growth in Q1 and 4.2 per cent thus far in Q2 — remains one of the best in the world, Holt said. 

Mendes said he expects growth will stay under one per cent this year: half of the Bank of Canada’s two per cent prediction and a third of the growth seen in the first two quarters. 

“We’re definitely slowing, and more of that is coming in a lagged response to higher interest rates and all the challenges of the world economy,” Holt said. “But relative to the rest of the world, for the year as a whole, Canada has been in a sweet spot.”

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Employers and Your Ego Are Constantly at Odds Over Your Value

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When considering the value of an item from a holistic perspective and through the philosophical lenses of existentialism, you realize an item has no value until someone is willing to pay for it, whether it’s a Porsche 911 GT3, a 26th-floor condo in Vancouver, a cup of Starbucks coffee or pair of Levi’s jeans.

Have you ever bought an item, a leather jacket, for example, for $400 and then a month later, it was on sale for $250? The retailer reduced the price of the leather jacket because the number of customers willing to pay $400 had dwindled to the point where it wasn’t selling. Taking this analogy further, the jackets that ended up not selling had no value.

Value doesn’t simply exist. Value is assigned by supply and demand—demand being the keyword. The value of your skills and experience on the job market is determined by how much employers are willing to pay for them, which constantly fluctuates.

It’s no secret most employees feel underpaid. The perception is mostly personal, based on:

  • Your assessment of your worth, which is highly subjective, and
  • The amount of money you need for the lifestyle you created.

 

Neither is relevant.

In general, compensation isn’t arbitrary. A job’s value is determined by:

  • Job-specific educational requirements
  • Skillset required
  • Experience level
  • Responsibilities
  • Location

 

Additionally, those who criticize what employers are offering them never think about the scenario that the employer may have ten employees currently earning $65,000, whereas you want $75,000. It would cause turmoil to hire you at your asking salary.

“Getting paid what you’re worth!” has become a popular sentiment. In reality, though, the value you place on yourself and the value employers in your region are willing to pay you are two entirely different perspectives.

Recently, someone asked me if I felt underpaid. “Nope,” I replied, “I’m getting paid the amount I agreed to when I joined my employer.” I have never understood nor empathized with people who accept jobs and then complain about the pay.

Your ego and sense of entitlement may have convinced you that you deserve $75,000, but you may find that employers disagree with your value assessment. Anyone with a slight sense of business acumen understands an employee’s compensation needs to correlate with the value they bring to their employer.

Hiring involves taking a candidate’s words at face value, especially regarding their work ethic, past results, and ability to work well with others. Gut feel plays a significant role during interviews. Skills and aptitude can be tested, but only to a certain extent.

A hiring manager can only do so much due diligence (multiple interviews, testing, reference checks). Work ethic, ability to achieve results, having the skills they claimed, and being a team player are only proven or disproven after a new hire starts. Most of the tension between job seekers and employers results from job seekers expecting employers to pay them “their value” for abilities that they haven’t actually proven. In contrast, an employer’s best interest is to mitigate hiring risks by starting new hires at the low end of their budgeted salary range.

There’re 2 types of candidates:

  1. Unemployed
  2. Employed

 

Those employed should not accept a starting salary less than 20% higher than their current salary. Unless your motivation is other than money, it’s not worth the stress of starting a new job and reproving yourself for your current salary.

On the other hand, if you’re jobless, your income is $0. Unless the compensation offered is insultingly low, I don’t suggest you try and negotiate for the starting salary (WARNING: Brutal truth ahead.) you made up based on what you think of yourself. Financially and emotionally, having no job and, therefore, no income is a worst-case scenario for many.

I know you’re now asking, “But Nick, how will I get the compensation I feel I deserve if I accept what I’m offered?” Whether employed or not, you need to prove your worth, which requires the following:

 

  1. Getting the job (Proving your worth is impossible without a job.), and
  2. Negotiate and get in writing that upon achieving specific metrics, milestones, revenue targets, or whatever else you can think of, within your first six months, you’ll get a 15% salary increase or whatever percentage you feel appropriate.

 

IMPORTANT: I can’t stress enough to be sure your employment offer letter includes everything you and the hiring manager discussed and agreed to.

 

Number two makes it much easier for an employer to say “Yes” to you since they aren’t taking all the risks of hiring you at a salary you want and then finding out you can’t deliver. Offering this option demonstrates you’re confident in your skills and abilities and aren’t afraid to prove them.

 

Who would you choose if you had two more-or-less equally qualified candidates to choose from and one of the candidates offered you the option of proving their worth before getting the salary they feel they deserve?

______________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send Nick your questions at artoffindingwork@gmail.com.

 

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