US: A study funded by the American Hotel & Lodging Association (AHLA) says a major share of Airbnb revenue comes from “full-time renters acting as illegal hotel operators”.
The report, From Air Mattresses to Unregulated Business: An Analysis of the Other Side of Airbnb, conducted by Penn State University’s School of Hospitality Management, analyses data from Airdna, which tracks Airbnb revenue and operations through continuous searches of the Airbnb site. The data was gathered over a 13-month period in 12 major US markets and excludes all shared rooms and apartments, as well as unique units, such as boats, tree houses and tents.
A key finding of the analysis was the rise of so-called mega-operators, defined as hosts who rent out three or more units. These grew from 1,171 in September 2014 to 2,193 in September 2015, an 87.3 per cent increase. Mega-operators account for seven per cent of hosts in the markets studied (New York City, Chicago, Los Angeles, Philadelphia, Miami, Houston, Dallas, Phoenix, San Antonio, San Diego, San Francisco and Washington DC) but accounted for 25 per cent of revenue generated in those markets, totalling about $326 million.
Similarly, the broader subgroup of multi-unit operators, those who rented two or more units, represented 16.8 per cent of total hosts but generated 39 per cent of revenue. Full-time operators, those offering units at least 360 days over the 12 months ending September 2015, represented 3.3 per cent of hosts but generated 28.5 per cent of revenue.
AH&LA president and CEO Katherine Lugar said: “Our industry thrives on competition each and every day, operating on a level and legal playing field. And we believe new entrants to the market like Airbnb and the commercial businesses they facilitate have those same obligations. Unfortunately, this report shows a troubling trend as a growing number of residential properties are being rented out on a full-time, commercial basis, in what amounts to an illegal hotel, and using Airbnb as a platform for dodging taxes, skirting the law and flouting health and safety standards. This is not about ‘home sharing’, a practice that has existed for decades as a way for individuals to make a little extra cash by renting out the occasional room or home. But this data tells a very different story than the one told by Airbnb, who wants the face of Main Street but the wallet of Wall Street. As a corporation valued at more than $25 billion, they have a responsibility to protect their guests and communities; they should not be enabling the corporate landlords who are clearly using their platform to run illegal hotels.”
The AH&LA’s figures echo recent research in the UK by the British Hospitality Association (BHA) which found that 40 per cent of all home-exchange website listings are from “professional landlords”, the top 1,000 home-exchange hosts are netting £150 million of accommodation revenue annually, and that London is most affected, with the largest number of landlords (40 per cent of all listings in London are multiple property owners renting accommodation on a short-term basis year-round).
Airbnb spokesman Nick Pappas said: “The data in this report appears to be deeply flawed and paints an inaccurate picture of the Airbnb community.”
Separate to the report, a Summer 2015 US study commissioned by Credit Suisse and supplemented by STR data suggested there is no sign of impact on hotel occupancy at weekends, but perhaps some limited impact on Extended Stay occupancy due to Airbnb becoming more relevant to this type of traveller. Credit Suisse estimates Airbnb bookings will grow by over 300 percentage ponts by 2020.
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