• What does Inside Airbnb do, and what gave you the idea to create the project?
“Inside Airbnb is an activist project that collects data on the impact Airbnb has on residential communities in cities throughout the world. The project was created out of a need for cities and residents to understand the true impact of Airbnb on their communities – in an environment where Airbnb has refused to provide any meaningful objective data on their business and that of their ‘hosts’.”
• How would you summarise the effect that Airbnb and other similar platforms have had on the hospitality industry in the US, and in particular the extended stay and serviced apartment sector?
“Hospitality analysts and academics use my data to study the impact on the hospitality industry, so they would better be able to answer that question. What I can say is that Airbnb’s hosts are economically creative – their properties compete with most of the hospitality market segments – budget and independent travel, boutique and experiential travellers, business travel, and a small number of extended stay options. Rather than studying Airbnb’s effect on the hospitality industry, I’m more concerned with where Airbnb’s supply of virtual rooms, homes and entire apartments come from – and how this is disrupting residential housing.”
• Have you seen a divide between operators who are working with the new platforms, and those who see them as ‘the enemy’? Which approach is working best?
“I’ve seen very few lodging providers choosing to work with Airbnb. Even traditional Bed and Breakfasts feel unfairly threatened from the large number of unlicensed and unregulated operators using Airbnb as a shield from enforcement or compliance. Property managers are one sector that have embraced Airbnb. Listings owned by a host that have more than one listing are relatively common – a typical rate is 30 to 40 per cent of listings in this category across a city. Whether these are individual property investors or property managers depends on the city, but these are undoubtedly commercial operators.”
“Onefinestay, the short-term rental property manager which claims to offer only ‘legal’ residential rentals, has been one startup that hotels have experimented with as investors and owners; however at a very small scale. There is also the invention of a whole new range of startups designed to service Airbnb’s commercial operators – offering key exchange, concierge, transport, cleaning and many more services. It’s too early to see whether these can be viable businesses.”
• Can you outline the impact Airbnb is having on the residential property market in major US cities?
“In every U.S. (and international) city I’ve studied, the most populous, and popular listings are ‘entire home or apartment’ listings, and these have the most direct potential of displacing long-term residents. This already is surprising for most people, as terms like the ‘sharing economy’, “hosting” and Airbnb’s marketing and lobbying only talk about hosts sharing spare rooms. Recent studies of the impact of Airbnb on housing in cities like New York City and San Francisco find that the number of residential units converted to full-time virtual hotel suites can be as much as 30 per cent of the available rental stock in key neighbourhoods. There are 20,000 entire home listings in New York City, the majority of which are illegal under laws which were specifically designed to protect residential housing from short-term rentals.”
• What is the legal outlook on Airbnb being brought in to line with the hotel and professional landlord sector in terms of regulation, tax etc?
“After at least six years of Airbnb not paying hotel taxes in most cities, taxes now seem to be the common ground between Airbnb and cities on the equal treatment of short-term rentals vs hotel stays. However, Airbnb still prioritises marketing, host acquisition and lobbying, and so far has only signed tax deals in a small number of locations. More important than taxes, however, are zoning and other laws that define and protect the residential nature of our cities. Major parts of Airbnb’s business model are in direct conflict with these laws.”
“The cities that were early to legalise Airbnb, with permits or yearly limits on renting out rooms or entire homes, are now finding low levels of compliance and high levels of negative, commercial impact in their neighbourhoods; and despite ‘Community Compacts’ pledging cooperation, no short-term rental platform has held itself accountable to following these laws.”
“In response, cites are now responding with regulations focussing on platform accountability, data sharing, and in a few notable instances, banning entire home rentals altogether. A key battleground will be in the U.S. where laws to make short-term rental platforms accountable is claimed by those platforms to be an unconstitutional limit of a host’s ‘free speech’. The Supreme Court of the U.S. may end up deciding this issue, however independent legal analysis suggest that cities should ultimately be able to protect their residential communities with effective legislation.”
• How do you see the way Airbnb operates changing over the next five to ten years?
“Airbnb and their investors have bet on escaping regulation. They will have to factor into their business model a dramatic slowdown or reversal in growth, as their supply of rooms and entire homes in major urban areas become successfully regulated. Airbnb will be forced to abandon scale and opt for diversity of service, or develop innovative forms of tourism that leverage their brand and technology platforms, in order to justify their US$30 billion valuation and expected future growth.”
