Skift Take

We can't wait until Airbnb goes public so we can finally get some transparency and stop hearing about hosts trying to make ends meet. It's so much more sophisticated than that.

Earlier today the American Hotel & Lodging Association released a report about Airbnb host activity that the organization commissioned from faculty at Penn State University’s School of Hospitality and Management.

The AH&LA is one of the largest organizations in the U.S. representing hotels, management companies, and other parts of the hospitality industry. The AH&LA could not be considered an impartial party in the growing debate between hotels and short-term rentals.

The Penn State research, which it conducted using data from Airdna and the assistance of Kalibri Labs, focused not on the hosts “trying to make ends meet,” as Airbnb argues are the norm on the site, but the hosts who rent out more than one unit or rent out their units full-time. Data used in the report was collected between September 2014 and September 2015 in the twelve largest U.S. markets [see chart below].

“This is national comprehensive study of Airbnb,” Katherine Lugar, CEO, AH&LA said during this morning’s press conference. “It is important that I underscore a point: Occasional home sharing and occasional rentals has been going on, and without question they provide real benefits for the teacher, student or grandmother who may want to earn some extra cash. That is not our focus today.”

The top-line takeaway from the study is consistent with other studies not commissioned by Airbnb: A small number of hosts who treat Airbnb as a full-time profession are responsible for a disproportionate share of the site’s revenue. This activity can be summed up in five findings from the report:

  • Full-time hosts represent 3.3% of hosts and generate 28.5% of revenue
  • Multiple-unit operators account for 40% of Airbnb revenue
  • Multiple-unit operators are responsible for $500 million of $1.3 billion in revenue in the top 12 markets
  • Hosts that rent three or more units represent 7% of hosts yet generate 25% of revenue
  • Hosts who rent more than one unit are the fastest growing segment of hosts on the site

The Study

The use of Airdna data gives the report a better understanding of behavior and revenue than other reports have been able to determine, including Skift’s first report in 2013 and its 2014 report, executed by Connotate and used by New York’s Attorney General to force Airbnb to reveal more details about super hosts in New York City. Over the past year, Airbnb has made it more difficult for people to see when hosts have more than one listing on the service, but data-scraping is better able to link hosts with their listings both within one market and multiple markets.

“The purpose of Airdna is to help Airbnb operators to determine what they are pricing and their availability or units should be,” Dr. John O’Neill, director Center for Hospitality Real Estate Strategy at Pennsylvania State University said today. “They do that by conducting a continuous search of the Airbnb website. It is important to note that all of the data from Airdna actually comes from Airbnb operators.”

Airbnb released a statement from spokesman Nick Pappas that read “The data in this report appears to be deeply flawed and paints an inaccurate picture of the Airbnb community.”

The share of revenue from these super hosts varies from market to market, with Miami leading all cities at 61.3% and Phoenix at the bottom as the only market where this share is in the single digits, at 5.5%

Cites Ranked by Super Host Share of Revenue

Market Full-Time Operators Revenue Share of Revenue
Miami 398 77,694,157 61.3%
Los Angeles 577 86,254,017 31.2%
Washington 117 15,589,906 28.9%
Philadelphia 41 4,190,937 28.1%
Houston 30 3,061,974 27.5%
San Diego 106 14,006,082 24.8%
Chicago 111 12,737,048 24%
new York 909 116,427,278 24%
San Francisco 308 43,559,557 22.4%
San Antonio 14 761,040 20.1%
Dallas 22 1,536,619 19%
Phoenix 24 2,354,759 5.5%

“What we found was an alarming trend: Professional operators are growing in every single market we studied, and while they are a small proportion of hosts, they generate a disproportionately large share of revenue,” said O’Neill. “Multiple unit operators account for nearly 40 percent of revenue, and that translates to over $500 million of the $1.3 billion in revenues Airbnb generated in the 12 cities analyzed during the course of our study.”

No Illegal Hotels?

It’s worth noting that the study does not call out Airbnb for facilitating rentals in large-scale illegal hotels, which is an accusation frequently leveled at the service by its critics. If an AH&LA study had found evidence of this it would be a surprising omission from this report.

Rather, it argues that the most successful and valuable hosts on the site are a rapidly growing class of micro-entrepreneurs that are almost always in violation of local laws meant to restrict short-term rentals in cities with housing challenges. Full-time hosting is illegal in nearly every city Penn State faculty studied, yet it still accounts for more than one fourth of Airbnb’s revenues.

“Very few cities to date I think have taken a comprehensive approach at looking at how to ensure that – particularly among the commercial landlords – that they are taking steps to protect consumers, safeguard communities and ensure a fair marketplace,” said Lugar. “Those laws differ from city to city, but we do believe it is important, that particularly among the commercial operators they are playing by the same rules that even the smallest of B&B’s do as it pertain to zoning, taxes, safety, security and a range of other issues.”

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Tags: airbnb

Photo credit: Understanding the true nature of activity on Airbnb has always been an experiment in patience. Frame

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