Nearly 84 percent of Airbnb hosts in Los Angeles could have been operating illegal hotels and generating approximately 98 percent, or about $257.6 million, of Airbnb’s total $261.7 million in total revenue for the region from October 2014 to September 2015, according to new data released on March 31 by Penn State University’s School of Hospitality Management.

The Penn State report derives from a study originally commissioned by the American Hotel & Lodging Association (AH&LA), one of the largest U.S. organizations representing hotels, management companies, and other sectors in the hospitality industry. Bearing this in mind, it’s worth noting that AH&LA has not been the most impartial organization with regard to discussions about the short-term rental and home-sharing industries. For this study, Penn State looked at numbers from Airdna and its partner, Kalibri Labs, which reviewed Airbnb operators, revenues, and listings for the period from October 2014 to September 2015.

Phase I of the Penn State/AH&LA report noted nearly 30 percent of Airbnb’s revenue ($378 million) in 12 of its largest U.S. markets came from Airbnb hosts who list their properties for rent full time, or essentially 360 days or more in a year. The January 2016 report also found that nearly 40 percent of Airbnb’s revenue — some $500 million — in those 12 cities comes from “multi-unit operators,” hosts renting out two or more units.

But AH&LA isn’t the only one looking into illegal hotel operators on Airbnb these days. Zeroing in on hosts who use the platform on a professional, full-time basis, or those with multiple listings, is becoming an issue of concern for San Francisco-based Airbnb, too.

Airbnb Zeroes in on Super Hosts in Its Home Turf

On April 2, Airbnb began investigating San Francisco hosts with more than one listing and pledging to remove “unwelcome commercial operators” or those running illegal hotels in private homes. Airbnb also released its own data on San Francisco, looking at the period from March 15, 2015 to March 15, 2016.

According to Airbnb, about a fifth of the city’s full-home rentals, or 1,149 listings, are run by hosts who rent more than one entire home on the platform. San Francisco law only allows vacation rentals conducted by permanent residents who list their own home. Of those 1,149 listings, 478 are legally listed by licensed hotels or comprise legal rentals of 30 or more days. The other 671 listings, however, are run by 288 hosts who may soon be removed from the Airbnb platform. Although these 288 hosts’ listings only make up about 7 percent of all listings in the city, they generated 17 percent of all host revenue in San Francisco from March 15, 2015 to March 15, 2016.

One piece of data not included in Airbnb’s numbers, however, are the number of entire home listings that are rented for more than 90 days a year, which could have provided more insight into the number of illegal operators using the platform.

Airbnb, however, says it remains committed to removing these bad actors. It said nearly 100 such listings were removed in San Francisco this January, 92 were removed in June 2015, and 26 were taken down in September 2015.

Airbnb has been known to remove bad actors before, with the added effect of misrepresenting the data it makes public. In February, the company confirmed it did, in fact, remove some 1,500 questionable New York City listings prior to releasing information about its operations in the city on Nov. 17, 2015. Because those listings were removed, the numbers Airbnb presented did not accurately reflect the proportion of Airbnb hosts in New York with multiple listings, who may be running illegal hotels.

Comparing the L.A. Data from AH&LA and Airbnb

Examining the data sets on Los Angeles from AH&LA and Airbnb portray two very different cities, and that’s why it’s difficult to quantify exactly how many bad actors are actually operating on Airbnb — the numbers seem to vary so widely.

Here are highlights from the Penn State/AH&LA study, which looked at the period from October 2014 to September 2015:

• Twenty-two percent of Airbnb hosts in Los Angeles listed properties for rent for more than 180 days per year, generating more than $180 million in revenue, nearly 70 percent of all of Airbnb’s revenue in the area
• While only 4 percent of Airbnb hosts in the Los Angeles region listed properties for rent more than 360 days a year, they made more than 30 percent of Airbnb’s revenue, which is close to $80 million.
• The top five Los Angeles area zip codes with the most properties listed on Airbnb account generated close to $81 million, or 31 percent, of Airbnb’s revenue in the Los Angeles metropolitan area.
• The most popular zip code for the number of Airbnb hosts and listings is 90291, which includes the neighborhoods of Venice, Venice Beach, and Oakwood; those hosts made nearly $33 million in revenue.
• If Airbnb hosts in the Los Angeles region were required to pay the 15.7 percent total LA lodging tax rate, they would have owed more than $41 million in local taxes.

Needless to say, Airbnb believes AH&LA’s study is not accurate, and it pointed out that the company is working with the city to allow Airbnb to collect taxes from its hosts.

The company issued the following statement regarding the AH&LA report: “This factually inaccurate study was paid for by the hotel industry and is intended to mislead and manipulate. Over the last two years, LA officials have heard from thousands of middle class Angelenos urging the city to adopt clear, fair rules for home sharing and allow Airbnb to collect taxes on behalf of hosts. Airbnb initiated a dialogue with city officials about enabling the platform to remit taxes on behalf of users in late 2014, and we welcome AHLA’s support in moving that process forward.”

Last summer, a Los Angeles City Council panel voted to hold off on negotiating a 14-percent tax agreement for short-term rentals proposed by L.A. Mayor Eric Garcetti until the budget committee is able to draft a comprehensive plan for regulating businesses like Airbnb and HomeAway.

“Airbnb’s unwillingness to be forthcoming with data about how its site is being used demonstrates that its ‘honor system’ for tax policy and enforcement, as they’ve proposed in L.A, won’t work,” AH&LA President and CEO Katherine Lugar said in a statement. “To date, those in the short-term rental space have only given lip service to curbing commercial operators from using their platforms to run illegal hotels, and to insulate neighborhoods and communities from these operators. State and local governments should act to ensure a fair travel marketplace by addressing illegal hotels and commercial operators in LA.”

In September 2015, Airbnb, working with the UCLA Luskin School of Public Affairs, released a report on Los Angeles. The purpose of the study was to examine Airbnb’s impact on the local community. It analyzed data from Airbnb, publicly available census and survey, and third-party information over different periods of time ranging from 2013 to 2015. Here are highlights:

• Ninety-two percent of entire home listings on Airbnb in Los Angeles are rented for less than six months of the year
• Eighty percent of entire home listings are rented less than 90 nights per year
• Only 0.05 percent of all housing units in the City of Los Angeles are rented more than 177 days on a short-term basis via Airbnb

The biggest problem with this information, however? It doesn’t say exactly what period or periods of Airbnb data were examined for certain data points, making it incredibly difficult to determine if these numbers are an accurate reflection of the city for a fixed length of time. This report also does not look at the number of operators on Airbnb with multiple listings.

As we saw with competing data from AH&LA and Airbnb about Airbnb’s operations in Phoenix and Arizona state, it’s clear that more transparent data is necessary to determine the platform’s true impact on local communities.

If Airbnb wants more widespread acceptance from local governments throughout the U.S., it should continue removing bad actors from its listings — and prevent them from coming back.

Photo Credit: A new report examines the number of commercial operators using the Airbnb platform in Los Angeles. Getty Images