For more than a few summers, my husband and I packed up the kids and headed to the US for six or seven weeks of vacation. Sound good? Sure, it was fabulous. But the months prior to our long break were fraught with tension as we endlessly sought renters for our spacious, family-friendly apartment through massive email campaigns, postings on listservs and Craigslist, seeking the right configuration to help offset the costs of six plane tickets and the other incidentals of a family summer vacation. And that was before we started worrying about what our place would look like when we got back home.
Those extended trips are on hold for now, but were we to return to the rent/swap concept, we’d post our “spacious, 5 br, 3-bath, kosher kitchen with all the amenities + bbq-backyard” apartment on accommodations websites Tellavista or Airbnb. As for our renters, we’d recommend they take in a meal with a local host from EatWith and rent any necessary toddler equipment we lack from Israel With Baby. We’d probably resist offering up our living room couches to the backpacker crowd checking in on Couchsurfing; there are limits to our hospitality.
Airbnb, Tellavista, EatWith, and Israel With Baby are just a few of the companies that have helped turned the accommodations market on its head, making it digital, budget-friendly, and DIY — and driving a massive change in the travel industry. All but Airbnb are local, and probably driven by Airbnb, which was reputedly the first to standardize the apartment swap market. But when it comes right down to it, said Eugen Miropolski, managing director of Airbnb for Central and Eastern Europe and Israel, the digital travel market works here because Israelis are good at sharing.
“If you’re looking at trends in the sharing community, you can share anything, share your car, baby’s clothes. And what you see is that Israel is very open to sharing,” said Miropolski. “What’s remarkable about Israel is that it’s a rather small country, but it’s one of our top 20 markets. I’ve seen how open people are, and the idea of letting people into homes picked up very fast.”
Sharing, in its latest form, is about making life more eco-friendly and affordable, for example through neighborhood clothing swaps, car sharing, childcare co-ops, potlucks, and co-housing, or more globally through projects such as the urban car-sharing Zipcar, information bank Wikipedia, recycling site Freecycle, and Creative Commons, the creative works sharing site. But there are also entrepreneurs out there, eager to take the general concept and make it work for the population at large, at a profit.
Airbnb, as in airbed-and-breakfast, is not an Israeli company, but has been available globally and in Israel since 2008, when the company got its start. Founded by two industrial designers in San Francisco who were looking for their big idea, they came up with the concept after renting out rooms in their apartments to visitors coming to town for a design conference. They blew up their airbeds, bought some cereal for breakfast, and made $1,000 and some new friends. Airbnb was born.
“They thought it was a funny idea but didn’t think people would actually stay in their homes,” said Miropolski. “But people wanted cheaper options than hotel rooms.”
The revenue stream is fairly straightforward: It’s free to list a space on Airbnb, and the company makes money only when hosts earn. Based on each reservation total, which is made up of the price per night and the number of nights, there is a 3% host fee while guests contribute a 6% to 12% guest fee, based on the price of the rental.
It appears to be working; as of 2012, Airbnb had hosted four million guests throughout the world. In Israel alone, Airbnb has hosted 16,000 guests from 80 different countries, renting primarily in Jerusalem, Tel Aviv, and Haifa. There are more than 4,500 properties listed in Israel, although so far none of the treehouses, boats, castles, and yurts that the company likes to mention.
For some tourists, the downside to the Airbnb model is the ‘stranger’ aspect, not actually ‘knowing’ the person who’s sleeping in your bed, or being a voyeur in someone else’s home. That was the troublesome element for brothers Roee and Nadav Ziv, who developed Tellavista, their version of the apartment rent-and-swap site.
The model is similar to Airbnb, admitted Roee Ziv, but the benefits of being an Israel-only site is “we’re really in touch with the owners, we can give answers if necessary,” he said, adding that the small-world aspect of Israel can make it easier to adapt to the idea of renting from a stranger. “We can offer kosher homes, which is a new feature, and we offer more flexibility with payment, which can be in cash.”
The Ziv brothers began their business as a hobby. Both had rented out their Tel Aviv apartments each summer in order to fund their travel expenses, finding that it was always a cumbersome process. While travel websites such as booking.com and Expedia had been successful in streamlining the DIY flight and hotel process, the apartment vacation rental market was handled through sites that required owners to pay a fee, a non-starter for many.
Yet free listings on sites like Craigslist were often scams and “something needed to come along to make it all work,” said Roee. “It had to be, ‘pay me, the person running this site, not the owner; these are the rules.’ It’s a revolution for the vacation rental market.”
As professional engineers — Roee was a biomedical engineer and Nadav was a software developer — the brothers built a software platform that offered online ordering for the apartments, giving them a 3% to 6% fee of the owner’s income from the rental, and some 10% from each renter. Within three months, they’d both left their full-time jobs to work on Tellavista, which was chosen as one of the most promising startups of 2012 by the city of Tel Aviv.
They began with rentals in Tel Aviv, their hometown, but quickly added Jerusalem and Netanya when they realized the tourist demand for those cities. Once they recognized that Tellavista could handle cities in which they don’t live, it was easy to start expanding worldwide. Tellavista now handles apartments in more than 50 locations, including more than a dozen outside Israel. That said, it’s a site that caters to Israel’s incoming and outgoing tourists, focusing on the cities that Israelis travel to outside Israel, such as London, Paris, Berlin, Barcelona, and Amsterdam (as well as India), and the top locations for those visiting Israel. Still, said Roee, they are gaining customers who may have first used Tellavista in Israel, but then opted to use it for a visit elsewhere.
“That’s the beauty of the internet,” said Roee. “You can be in Spain and rent in Lisbon.”
Still, there is the matter of quality control, and Tellavista will only expand into cities where it can offer a representative to check out apartments and offer a strong measure of quality control. It’s a similar standard at Airbnb, which ended up hiring professional photographers in order to properly ‘show’ each listing on the site.
“Our work model is that the owner has no incentive to pull a fast one,” he said. “You can’t say your apartment is 100 meters when it’s just 50 because you won’t get your money if you lie.”
“Owners must give real details,” added Roee. “And our reviews help as well, because they’re only from people who have rented through us, not like Trip Advisor (the global tourist review site that is often used by hotels and other tourist industry providers). “If you’ve stayed in an apartment, you get an email to rank it and the owner receives that as well.”
The Airbnb and Tellavista models work in Israel because the country is so tech-savvy, said Miropolski.
“People in Israel know how to connect and that’s the sharing economy,” he said. “People always share things, but mostly with people they know. But the internet as a medium makes it easier to share with people you don’t know, as long as the system is very transparent and safe.”
What’s for dinner?
Okay, so you might consider staying in someone else’s home, but would you eat a meal with them?
That’s the concept behind EatWith, the dine-with-strangers business developed by Guy Michlin, a lawyer and Stanford MBA who found that his best travel experiences involved getting to know the locals.
“You talk to a local and you really understand what’s going on,” said Michlin, who likes to recall one particularly “magical” meal with friends of friends in Crete. “If you just go to a restaurant, no one would talk to you.”
The concept of EatWith is fairly straightforward; it brings people back to the home-cooked meal, sharing food and conversation around a host’s table. Hosts advertise their meals on the EatWith website, giving a general idea of what they will be serving, the number of people at the table, and the cost per person, which can range from $20 to around $80. Users pay the host for each guest (average prices seem to be about $35-$50 per guest per meal), and EatWith collects 15% off the top.
“It’s for people who are givers. They have to love food, be foodies, but nothing extreme,” said Michlin. “It can be very simple home cooking, but they love it, they’re passionate about it, and about other people.”
What has surprised Michlin, who has expanded EatWith to Israel, Spain, and now New York as well as a location to be selected by the EatWith community, is that EatWith appeals to tourists as well as locals seeking something a little different for their night out. Sometimes it’s a group of friends celebrating a birthday, or singles looking for a different kind of meetup.
It’s not about budget dining, either, since hosting people in one’s home isn’t necessarily cheaper in terms of ingredients, or time. Rather, it’s about having a dining experience that can’t be had otherwise.
“We’re trying to do something new, because it’s about changing people’s perceptions,” Michlin said. “What surprised me was the complexity of this product. If you’re selling an apartment, that’s something that’s objective. Here, it’s a subjective process because people will have different emotions to people and food.”
He’s pretty sure EatWith will change the way people travel and dine, creating a “whole new dining category.”
The company has raised $1.2 million from Israeli investors, including some 80% from venture capital firm Genesis Partners and the rest from local angel investors. Michlin recently demoed the service at the TechCrunch Disrupt Battlefield competition, a premiere start-up launch competition by the online tech magazine.
“It could be that I’m dreaming, but I really and honestly believe it will change the way people eat and meet,” he said.
And sleep and travel. Who knows? Maybe people will stop packing luggage and just hit up a clothing swap upon arrival in each new city. Or pull some pajamas and clean underwear out of their host’s drawer. In any case, it’s dinnertime. Want some shakshuka? It’s being served tonight, in Jerusalem. Come on over.
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