Airbnb Captures 1% of Visitors in Its Largest Market, New York City
Airbnb hosts a food drive in New York City after Hurricane Sandy. Airbnb Community / Flickr
Regardless of the growing pains, peer-to-peer services such as Airbnb are on track for dramatic growth. NYC and other cities are going to have to find ways to deal with it.
Airbnb is in the midst of what is shaping up to be the defining fight of the sharing economy thus far. Two weeks after the home-sharing startup filed to block the New York State Attorney General’s subpoena for user records, Airbnb released a year-long study touting its positive economic impact in the city.
The report, conducted by HR&A Advisors, says Airbnb generated $632 million in New York City over the past year; $104 million of this was generated in boroughs outside of Manhattan.
The report says that domestic Airbnb guests stay twice as long as hotel visitors (5.2 nights versus 2.5 nights) and spend 60 percent more ($1,005 versus $605) per stay. It also points out that international visitors, who make up 60 percent of Airbnb guests in New York City, spend more than Airbnb’s domestic visitors ($1,560 versus $1,005).
However, this boasting is slightly less impressive once weighed against the fact that less than 1 percent of New York City’s 52 million annual visitors stay in an Airbnb listing. To be exact, New York’s 416,000 Airbnb guests represent 0.8 percent of all visitors.
Airbnb’s economic impact in New York is still three times larger than its next largest market, Paris, where it generates $240 million a year.
The argument here could go one of two ways. A critic might figure if Airbnb represents such a small percentage of the visitors that completely banning the service and its incremental economic impact would have few repercussions.
An advocate would point out the enormous impact the service is having on individual New Yorkers as reason enough to keep it.
A few of the other highlights from the study are as follows:
- Eighty-seven percent of Airbnb hosts rent their own home and make an average of $7,530 per year.
- The average Airbnb guest stays 6.4 nights and spends $880 throughout the city. The average hotel guests spends 3.9 nights and spends $690 in the city.
- Eighty-two percent of Airbnb listings are outside of the main tourist hotel area of midtown Manhattan.
- The average daily rate of Airbnb rental is $145, the average daily rate of a hotel room is $256. It’s an affordable option in a very pricey destination.
Airbnb’s New York City legal problem is not the 87 percent of people who are present while renting out their primary residence. This is currently legal in New York.
The legal problem comes with hosts who leave their property while they charge guests for stays lasting less than 30 days, and the 13 percent of hosts who rent out numerous properties where they do not live.
Airbnb’s head of public policy, David Hantman, says the company wants to work toward an exemption to the state law that would allow hosts to legally rent their apartments for less than 30 days when they are not present.
The release of the study was designed to show that this would benefit the New York City economy.
Spokesperson Nick Papas says it’s a matter of weeks, not months, before the court is expected to rule on Airbnb’s attempt to block the state attorney general’s subpoena.
Stay tuned, New York…