The Rise of Airbnb Commercial Operators in the U.S.

In the U.S., Airbnb hosts renting out more than one entire home or apartment generated $1.8 billion in revenue for the company in 2016. That's one-third of Airbnb's total U.S. revenue, according to a study from CBRE Hotels' Americas Research called Hosts with Multiple Units—A Key Driver of Airbnb Growth.

American Hotel & Lodging Association president and CEO Katherine Lugar and some hoteliers and lawmakers call these hosts "illegal hotel operators," implying that these hosts, by posing as homeowners, are skirting laws and regulations aimed at commercial lodging operators. The AHLA commissioned the CBRE study, as well as prior reports about multi-unit Airbnb operators.

However, for this particular study, "illegal" isn't exactly the correct term. Using data scraped from Airdna, a site that tracks Airbnb listings and revenue, CBRE examined multi-unit operators in the U.S. between October 2014 and September 2016. It excluded shared and private rooms, units with minimum stays of 30 days or more and unique property types, such as boats and tree houses. This methodology, though, can let in units operated by transparent commercial operators. Those operators, then, are inadvertently labeled illegal, as well.

For instance, the Chicago listing pictured above, with a three-night minimum stay, appears on both Airbnb and Airdna. It states on "The Host" tab that it is a serviced apartment. While the listing doesn't say so, the property belongs to BridgeStreet Global, with which Airbnb inked a partnership in 2015. The host, Justin, has 33 other listings on Airbnb. BridgeStreet CEO Sean Worker previously told BTN that all of BridgeStreet's listings comply with local jurisdictional permissions and that as an established lodging provider, it does pay all the required lodging taxes.

With that caveat in mind, here are some of the key findings and estimations from the report:

CBRE's U.S. Findings

• Multi-home hosts comprised the fastest-growing segment among U.S. Airbnb hosts, the fastest-growing segment among U.S. units and the fastest-growing U.S. revenue bucket between October 2015 and September 2016.
• Hosts listing an entire home or homes earned 81 percent of Airbnb revenue in the U.S. last year. That's up from 78 percent in 2015.
• U.S. Airbnb hosts generated $5.7 billion in revenue between October 2015 and September 2016, a 140 percent increase in revenue from the prior 12-month period.

The 13 Largest U.S. Markets

• Multi-home operators accounted for 30 percent of U.S. revenue, approximately $700 million.
• Hosts listing 10 or more properties created a quarter of all multi-home-operator revenue, about $175 million.

While revenue increased from 2015 in all 13 of the largest U.S. markets, CBRE found that revenue grew slower in New York and San Francisco. Additionally, the share of revenue generated by multi-home operators in those two cities declined year over year, by 7.1 percent in New York City and by 4.6 percent in San Francisco.

Both the state of New York and the city of San Francisco in 2016 passed laws that would financially penalize Airbnb for listings that violate local short-term-rental regulations. Airbnb challenged those laws in court but lost the battle in San Francisco in November and settled with the state of New York in December.

She Said, He Said

AHLA's Lugar said, "Our hope is this new data provides officials at every level of government the information they need to double down on their efforts to close the illegal hotel loophole and hold Airbnb and other short-term rental companies accountable. Today, we call on Airbnb to hold true to their word to join us in the fight to take down illegal hotels from their platform."

Christopher Nulty, Airbnb public affairs lead for Eastern North America, dismissed the study in an email to BTN. “This misleading, inaccurate report was bought and paid for by the big hotels and is the latest example of the industry’s willingness to say and do anything to protect their record profits, preserve their ability to price-gouge consumers and squash their competition." Nulty added that many of AHLA's own member inns, motels and hotels list rooms on Airbnb, "so these are included in the very data on 'commercial' listings the big hotels seem so concerned about."

The CBRE study found that true home sharing, for which a host is present during the guest’s stay, accounts for less than 20 percent of Airbnb’s U.S. business. Perhaps that should come as no surprise, however, as Airbnb has already branched out from what began as its core business of everyday people renting our guest bedrooms. In November, the company launched Airbnb Trips, which provides tours and local experiences, and in February, it acquired Canada-based vacation home rental company Luxury Retreats. Airbnb also has snatched up a number of other companies, including social payment provider Tilt; bitcoin payment provider ChangeCoin; and Russian gadget company Lapka. On Thursday, the company announced it had raised $1 billion in its most recent fundraising round, bringing Airbnb's valuation to $31 billion.