Airbnb does an excellent job getting people into neighborhoods that otherwise are closed to outsiders. Whether or not that adds up to $4.5 billion is up for debate, but it is a significant impact.
On a typical weekend evening, the wait for a table at Saraghina in Brooklyn’s Bedford-Stuyvesant neighborhood is at least an hour.
The Neopolitan-styled pizza place, behind an unassuming black wood corner storefront, specializes in pies such as prosciutto and sautéed mushroom, and Salsiccia, topped with housemade pork sausage. The crowd outside reflects the increasingly gentrified area, with a mix of long-time residents as well as a younger crew who are newer to the neighborhood. Take a second look, and you’ll spot yet another group in the mix as well, one that represents another increasingly prominent aspect of the area: a steady stream of foreign tourists, guidebooks in hand, awaiting their pizza. Many are guests from the neighborhood’s numerous Airbnbs, and Saraghina is high on their to-do list.
Pizza lovers will occasionally travel from other parts of city to eat at Saraghina. It’s been reviewed in the New York Times and occasionally shows up on a long list of destination pizza spots around town. But by and large Saraghina is the definition of a neighborhood spot; the majority of its business comes from people who haven’t traveled far to get there, at least that day.
Saraghina comes to mind with the release of a new Airbnb report that finds its guests have generated an eye-opening $4.5 billion for restaurants around the world. Of that, $1.5 billion has been spent at restaurants in 19 key cities in the U.S., from Austin to San Diego. According to the report, which is based on an annual survey of customers’ spending habits during the past 12 months, guests shelled out $50 to $90, on average, at restaurants. You might wonder if that figure would be the same for travelers staying in hotels and therefore money that would be spent anyway—but Airbnb estimates that 56 percent of its users spend more on food and shopping as a result of saving money by using the site. What’s more, it has found, 42 percent of guests spend money in the neighborhoods where they’re staying. The cities with the highest guest spending on restaurants are New York ($470 million), Los Angeles ($236 million), San Francisco ($107 million), and Chicago ($93 million). There’s also Oahu ($41 million) and California’s East Bay ($47 million). Even Cleveland has benefited ($3 million in revenue for restaurants).
In August, Airbnb launched a Guidebooks website, an amalgamation of local spots recommended by hosts around their respective cities. Internationally, the guidebooks highlight 200,000 attractions; 90,000 of them are restaurants. If you click on New York, you’ll find a list with more than 2,300 highlights. No. 5 on the list is Saraghina; 479 local Airbnb hosts have recommended it. (As a point of reference, it’s got more than a hundred more nods than Katz’s Delicatessen, which not infrequently has a tour bus parked outside. Katz’s has 342 host recommendations. Airbnb likes to point out that its customers tend to eschew traditional tourist experiences in favor of more authentic neighborhoods and unusual experiences. In fact, 74 percent of Airbnb listings are located outside traditional hotel districts.)
“We have a ton of Airbnb guests. We’re pretty lucky,” says Evrotas Volman, Saraghina’s general manager. But he also points out the counter argument to Airbnb’s report, which is that people are coming to Saraghina anyway, whether or not it’s via Airbnb. “We also have a ton of B&Bs in this hood,” says Volman. “We’re completely surrounded by big beautiful buildings that people have remodeled. Some of them are Airbnbs; some are traditional B&Bs. We get lots of customers from both.”
Nick Papas, Airbnb’s PR director, tells a first-hand story about the impact of his company on restaurants. In early September he went to dinner in the Columbia Heights neighborhood of Washington, D.C., a remarkable Filipino place called Bad Saint. “A co-owner, Genevieve Villamora, recognized my name [Papas used to work in politics], and we started talking,” he said on a phone call. “When I told her where I worked, she noted there were a number of Airbnb listings in her neighborhood. It does not have a lot of hotels. Airbnb is making it possible to stay in ‘hoods that people might not have stayed in in the past. And it’s brought them closer to restaurants they might have not heard of.” Papas also namechecks Room 11, a now crowded bar down the block from Bad Saint, which he says has benefited from Airbnb buzz. “I don’t know that the average tourist would find Room 11,” says Papas. “That block has not typically been a haven for tourists.“
Villamora remembers meeting Papas. It was shortly after she read a report that said her Columbia Heights neighborhood had one of the highest densities of Airbnbs in the city. “It sounds crazy, but the whole neighborhood is peppered with them,” she says. “We get a lot of Airbnb visitors, even more than we realize because it doesn’t always come up in conversation.” Still, even more than Sarnghina, Bad Saint has become a major destination restaurant. In August, Bon Appetit magazine named it the No. 2 best new restaurant in the country, a recognition that drives a big amount of traffic. “A lot of our guests reference that review,” says Villamora.
Another D.C. restaurant, in a distinctly untouristy neighborhood, more directly sees the benefits of Airbnb. Art-Drenaline Cafe is a six-month-old fast-casual place, in the city’s underserved Anacostia neighborhood, that also operates an urban farm, an art gallery, and a job training center. Art-Drenaline’s brunch menu features such dishes as smoked salmon Benedict with citrus hollandaise sauce and roasted root vegetable hash. “We’ve have several customers tell us that they found us through their Airbnb hosts,” says Amanda Stephenson, who runs the place. “There aren’t any hotels nearby, but we’re walking distance from a lot of Airbnbs.” “The hosts come in too,” adds her business partner Shawn Lightfoot.
Airbnb’s focus on restaurants is only going to increase. The company is working on a travel services app that will include city tours, restaurant reservations, and other potentially interesting food experiences. The test version name is Airbnb Trips.
Even if you’re skeptical of the idea that Airbnb has generated $1.5 billion for restaurants around the country, it’s hard to discount the fact that they are contributing to communities that haven’t always benefited from tourists, such as Bedford-Stuyvesant, Columbia Heights, and Anascotia. But in addition to the common criticisms of Airbnb, at least one restaurant-related downside comes from a certain Airbnb clientele. “They can be the most annoying customers,” says Volman about some of the visiting Airbnb customers from Europe that pack Saraghina who don’t benefit from advice from hotel concierges. “The staff gets mad at them because they come from places where you don’t tip.”
©2016 Bloomberg L.P.
This article was written by Kate Krader from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo credit: The counter at Saraghina, a neighborhood restaurant in Brooklyn. Airbnb says it's Users poured $4.5 billion into local restaurants over the last 12 months. SaraGhina Restaurant