Airbnb isn’t just for those looking to make some extra cash. In fact, full-time business owners play a major role in the site’s success.
This story was originally published by the Urban Edge.
Cities continue to grapple with the ways in which the sharing economy has upended existing regulations.
And while ride-sharing service Uber has pushed cities to reconsider their taxi medallion systems, home-share company Airbnb has challenged the long-term relevance of traditional zoning based on how a property is used.
But a recent report from the Penn State University’s School of Hospitality Management instead suggests Airbnb might not represent such a dramatic change after all.
The study used data from a company that tracks Airbnb listings and revenues for people operating Airbnb units in 12 cities.
Its biggest takeaway: a disproportionate share of the money generated by Airbnb listings is coming from people using the service to run a full-time business, rather than normal people renting out a room occasionally for spare cash.
Unsurprisingly, New York sees the most Airbnb usage of any city, with more than 30,409 people renting out at least a piece of their home at least once from September 2014 to September 2015. California’s major cities are dealing with the new service, too, with Los Angeles seeing 14,350 rentals and San Francisco seeing 10,651 in that period.
Other large cities across the country – Chicago, Houston, Philadelphia and Phoenix – are dealing with a significantly smaller phenomenon. Chicago had 4,681 hosts in the year covered. Houston had just 956.
More interestingly, the study examined where revenue from Airbnb listings was coming from. Turns out, it’s disproportionately generated by two overlapping sets of hosts: those who list multiple units, and those who list their units full-time, defined as more than 360 nights per year. In other words, people really aren’t ever using their Airbnb units as homes for themselves.
Said another way, they found that lots of people are using Airbnb to run a full-time business. The report even takes pains to refute Airbnb’s public claims that it is used by regular people to generate extra money, arguing that statement “does not represent the full picture.”
The study used data from a company called Airdna that tracks Airbnb revenues and operations and provides information to Airbnb hosts. It found that 16.8 percent of Airbnb hosts rent out more than one unit, but those people account for 39 percent of the revenue generated in the 12 cities studied.
And while just 3.3 percent of Airbnb hosts rent out units full-time – defined as more than 360 days per year – those hosts nonetheless account for 28.5 percent of the revenue across the 12 cities.
“A growing number of hosts are using the Airbnb platform to operate an unregulated, full-time business,” the report reads. “Nearly 30 percent of Airbnb revenue is derived from this group of full-time hosts.”
The implications raise all sorts of questions about whether the service is really just a way for people to share space, or if it’s a roundabout bay of hoteliers operating outside typical regulatory and taxation schemes.
But there’s another way to take the findings.
A disproportionately large share of Airbnb revenues in these cities came from people who rent their homes full time. On the flip side, the overwhelming majority of Airbnb hosts – 96.7 percent – were, in fact, part-time hosts, and 81.2 percent of hosts rented out just one unit.
So while Airbnb is generating a large share of its revenues from people who are essentially using the platform to run a business, the bulk of people using Airbnb in these cities aren’t.