Report shows nearly 30 percent of Airbnb revenue in 12 major U.S. markets comes from hosts operating as “full-time” landlords
Number of hosts renting out multiple properties on Airbnb also rapidly growing; driving an increasingly large share of revenue
WASHINGTON, D.C., January 20, 2016 -- The American Hotel & Lodging Association (AH&LA) released a new study today conducted by researchers at Penn State University’s School of Hospitality Management offering the first, comprehensive national look at the rise of commercial activity on Airbnb, one of the most trafficked short-term rental platforms. The analysis tracks data collected during a 13-month period (September 2014-September 2015) in 12 of the nation’s largest metropolitan statistical areas (MSAs): New York, Chicago, Los Angeles, Philadelphia, Miami, Houston, Dallas, Phoenix, San Antonio, San Diego, San Francisco, and Washington, D.C.
Among the key findings in the report:
- Nearly 30 percent ($378 million) of Airbnb’s revenue in these markets came from “full-time operators,” with rentals available 360 days a year. Each of these operators averaged more than $140,000 in revenue during the period studied.
- The cities with the largest number of full-time operators include New York and Miami on the East Coast and Los Angeles and San Francisco on the West Coast.
- Individuals or entities renting out two or more residential properties on Airbnb account for 17 percent of hosts in the twelve cities studied, and this rapidly growing segment of “multi-unit operators” drives nearly 40 percent of the revenue in those markets, which equates to more than half a billion dollars a year.
“The study shows an explosion in activity among multi-unit hosts and the rise of full-time operators in each of the 12 markets we analyzed. Further, operators renting out three or more units represent a disproportionate share of revenue with only 7 percent driving more than $325 million in the period studied,” said Dr. John O’Neill, Professor and Director of the Center for Hospitality Real Estate Strategy at Pennsylvania State University, who directed the research.
“Our industry thrives on competition each and every day, operating on a level and legal playing field. And we believe new entrants to the market like Airbnb and the commercial businesses they facilitate have those same obligations,” said AH&LA President and Chief Executive Officer Katherine Lugar. “Unfortunately, this report shows a troubling trend as a growing number of residential properties are being rented out on a full-time, commercial basis, in what amounts to an illegal hotel, and using Airbnb as a platform for dodging taxes, skirting the law and flouting health and safety standards.
“This is not about ‘home sharing,’ a practice that has existed for decades as a way for individuals to make a little extra cash by renting out the occasional room or home. But this data tells a very different story than the one told by Airbnb, who wants the face of Main Street but the wallet of Wall Street. As a corporation valued at more than $25 billion, they have a responsibility to protect their guests and communities; they should not be enabling the corporate landlords who are clearly using their platform to run illegal hotels.”
The full report is available for download on the AH&LA website at http://www.ahla.com/uploadedFiles/_Common/pdf/PennState_AirBnbReport_.pdf
Serving the hospitality industry for more than a century, the American Hotel & Lodging Association (AH&LA) is the sole national association representing all segments of the 1.9 million-employee U.S. lodging industry, including hotel owners, REITs, chains, franchisees, management companies, independent properties, state hotel associations, and industry suppliers. Headquartered in Washington, D.C., AH&LA provides focused advocacy, communications support, and educational resources for an industry of more than 53,000 properties generating $176 billion in annual sales from 5 million guestrooms.
About the Penn State School of Hospitality Management
The Penn State University School of Hospitality Management is located at the main campus of The Pennsylvania State University in University Park, PA and serves approximately 740 students. It is one of the three oldest continually-operating hospitality management programs in the United States and offers a Bachelor of Science (B.S.), Master of Science (M.S.) and Doctor of Philosophy (Ph.D.) in Hospitality Management. The school houses the Center for Hospitality Real Estate Strategy under the direction of Dr. John W. O'Neill.