A significant portion of Airbnb’s revenue comes from
full-time renters acting as illegal hotel operators, according to a study
funded by the American Hotel & Lodging Association.
“Occasional home-sharing and occasional home rentals have
been going on for decades, and without question they provide real benefits to the
teacher, student or grandmother who may want to earn extra cash,” said AH&LA
president and CEO Katherine Lugar on a press call on Wednesday. “That is not
our focus today. Instead, this report revealed a very different and very
disturbing trend.”
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, analyzes
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 U.S. 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 mega-operators, defined as “hosts” who rent out
three or more units. They grew from 1,171 in September 2014 to 2,193 in
September 2015, an 87.3 percent increase. Mega-operators account for 7 percent
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,
D.C.—but accounted for 25 percent of revenue generated in those markets,
totaling about $326 million.
Similarly, the
broader subgroup of multi-unit operators, those who rented two or more units, represented
16.8 percent of total hosts but generated 39 percent of revenue. Full-time
operators, those offering units at least 360 days over the 12 months ending September
2015, represented 3.3 percent of hosts but generated 28.5 percent of revenue.
John O’Neill,
professor and director of the Center for Hospitality Real Estate Strategy at
Penn State, said that within the cities studied, New York and Miami had the
most full-time operators on the East Coast and Los Angeles and San Francisco on
the West Coast.
Housing advocate
Ellen Davidson, a staff attorney at The Legal Aid Society in Brooklyn, said
Airbnb has created a dangerous underground market and has caused landlords to
push long-term, low-income tenants out of their homes. “Airbnb is telling
landlords that they can make more money renting their units out on Airbnb than
finding traditional long-term leases, which takes these units off the market
and drives up rent prices.”
Deja Vu
This isn’t the
first time such an accusation has been directed at the sharing economy
provider. In October 2014, New York State Attorney General Eric Schneiderman
issued a report detailing the number of illegal Airbnb rentals in New York
City, showing that commercial users that operate multiple units have been key revenue
drivers for Airbnb and that those operators were displacing long-term housing options
in the city. In San Francisco, a failed initiative to restrict Airbnb rentals,
titled Proposition F, made its way onto the ballot in November 2015. Housing
advocates and city officials said the measure was necessary to combat serious
housing availability issues in the city.
Airbnb for its part issued a “Community Compact” that
month, promising to release annual Home Sharing Activity Reports for
key markets, featuring such details as the geographic distribution of listings,
the average number of days homes are listed and the safety records of listings.
Airbnb also pledged to work with hosts and host cities to ensure the company is
honoring local laws and limiting the impact of short-term rentals on long-term
housing availability.
“Companies like Airbnb want to have
it both ways,” Lugar said. “They want the face of Main Street and the wallet of
Wall Street.”
O’Neill said the AH&LA and Penn
State data is more comprehensive than any data that has been released by Airbnb
to date. “Analysts at Pennsylvania
State University performed all of the calculations on the data, examining over
416,000 lines of data and over 9.5 million variables. In contrast, a release by
Airbnb of its own data at the end of 2015 included only about 170,000 lines of
data.”
Lugar said Wednesday’s release was just Phase One of a deeper analysis
of the data gathered.
In the past year or so, Airbnb has beefed up its corporate offerings. In July, it unveiled tools that would allow corporate travel managers to view
employee bookings and itineraries at Airbnb properties, export companywide
financial data and reports in real time and centralize billing. It likewise has
been building out its inventory of what it calls Business Travel Ready
properties, those that would cater to business travelers through speedy Wi-Fi
and other professional amenities.
When asked whether
deeper analysis would look into whether mega-operators or full-time operators
were working within the Airbnb Business Travel program, O’Neill told BTN the data does “not allow us to
specifically quantify those units” but that those who conducted the study are
aware business travel units appear to be another growth vehicle for the
company.