The Rise of Commercial Operators on Airbnb – Deep Dive on City Data
June 27, 2016 8:23am
The hotel and lodging industry thrives on a level and legal playing field and welcomes competition from the “sharing” economy. Competition in the lodging sector thrives when everyone plays by the same set of rules designed to ensure the safety of our guests and our communities. We support the rights of property owners to occasionally rent their homes to earn extra income. But we share the concerns local residents have expressed about the growing number of commercial operators who are using sites like Airbnb to run multi-unit, full-time lodging businesses without any oversight.
Get the facts: An analysis, “From Air Mattresses to Unregulated Business: An Analysis of the Other Side of Airbnb,” offers the first, comprehensive national look at the rise of commercial activity on Airbnb, one of the most trafficked short-term rental platforms.
The analysis of hundreds of thousands of data points reveals a notable trend with respect to two overlapping groups of hosts, multiple-unit operators who rent out two or more units, and full-time operators who rent their unit(s) 360 or more days per year. These two subsets of operators generate a substantial amount of Airbnb’s revenue. Hosts who rent fewer than 360 days, but still far more than occasionally (for instance, more than 180 days), also contribute greatly to Airbnb’s bottom line.
This analysis, which was conducted by Dr. John O'Neill, professor of hospitality management and director of the Center for Hospitality Real Estate Strategy in the School of Hospitality Management at Penn State University, also includes additional, city-level analyses that provide greater detail about the commercial activity being conducted on Airbnb in the 14 major metropolitan areas studied.
As the popularity of short-term rental platforms grows in the public arena, this analysis takes a closer look at the hosts dominating one of the most trafficked platforms, Airbnb. The company, valued at some $25 billion, has a reported 2 million listings worldwide. In media interviews and public materials, Airbnb suggests that its hosts largely use the platform to supplement their income. It states that “a typical listing earns $5,110 a year, and is typically shared less than 4 nights per month.”
But that does not represent the full picture.
Some of the data revealed in the study showed:
1) Nearly 26% of Airbnb's revenue in 14 of the nation's largest cities came from user that listed properties for rent full-time (360 days or more each year).
2) The number of people listing two or more residential properties for rent on Airbnb is rapidly growing, and 40% of the company's revenue in 14 of the nation's largest cities is generated by these "multi-unit operators," to the tune of half a billion dollars a year.
As Airbnb proposes what amounts to an "honor system" of tax policy and safety enforcement in states and municipalities around the country, lawmakers should require the company to release data about its operations. Airbnb has demonstrated it can't be trusted to prevent commercial operators from abusing its platform - unless it's about to get caught in the act.
Deep Dive on City Data
As part of Phase II of the national report we are taking a deeper dive into all 14 of the markets. Click the links below to view the impact of Commercial Landlords using Airbnb in each region:
Closing the 'illegal hotel loophole" is the only way for state and local governments to protect communities and ensure a fair and competitive travel marketplace.
Short-term rental companies like Airbnb – by far the dominant player among its peers – claim they simply help regular folks occasionally rent out a spare room in their home to make some extra money. But in reality, a significant – and rapidly growing – portion of Airbnb’s revenue in major U.S. cities is driven by professional landlords, who often buy up multiple residential properties to rent them out on a full-time basis, just like a hotel. CLICK HERE to view the facts on Airbnb's data purge.
Tags: commercial operators,
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