Airbnb hosts renting out two or more entire home units represent the fastest-growing segment of Airbnb's business in the U.S., according to research released today. The study, "Hosts with Multiple Units -- A Key Driver of Airbnb Growth
," was conducted by CBRE Hotels' Americas Research and funded by the American Hotel & Lodging Association. That segment of hosts accounted for more than $1.8 billion in revenue in the U.S. last year, or 40 percent of Airbnb's entire-unit national revenue.
Those numbers dispute Airbnb's description of itself as a home-sharing platform, said AH&LA president and CEO Katherine Lugar. According to the report, 81 percent of Airbnb's revenue in the U.S., or $4.6 billion, comes from whole-unit rentals, where the owner isn't present during the rental period. "This is the latest report in a growing body of evidence showing short-term rental companies, and specifically Airbnb, are providing a platform for commercial operators to rent illegitimate, unregulated and often illegal hotels in neighborhoods across the country," Lugar said in a conference call.
The report examines two years of Airbnb data in the U.S. (compiled by the site Airdna), from October 2014 through September 2016, and highlights data from 13 major markets: Austin, Texas; Boston; Chicago; Los Angeles; Miami; Nashville; New Orleans; New York City; Oahu, Hawaii; Portland, Ore.; San Francisco; Seattle; and Washington, D.C. In those 13 cities, revenue generated from multi-unit hosts reached $700 million in 2016.
"The revenues derived from multi-unit, entire-home hosts across the U.S. rose a staggering 89 percent year-over-year in 2016," said Lugar. "In Washington, D.C., where we're headquartered, 24 percent of Airbnb's revenue is derived from hosts who own and run 20-plus entire-home units. That is not home-sharing; that's a business.
"We're calling on elected officials at every level of government to pass reasonable laws to treat them as such," Lugar continued. "What other business, particularly one valued at $30 billion, gets to pick and choose what laws they want to follow?"
The number of Airbnb rental units owned by multi-unit hosts grew last year in each of the cities analyzed, led by a 161 percent year-over-year jump in Nashville. Oahu, New Orleans and Seattle also experienced greater than 100 percent growth in the number of such units. The lowest growth, however, was seen in San Francisco and New York, each of which was up by 35 percent; the percentage of multi-unit hosts compared with the total number of hosts for each city was virtually unchanged since the previous year. Both San Francisco and New York have created legislation that seeks to regulate short-term home rentals more strictly.
"When you look at the data in this report," said Lugar, "it is clear that where cities have taken strong actions -- like in New York or in San Francisco -- those laws are working to crack down on illegal hotels. Much of the proliferation we are seeing in the other markets studied... It's clear that more needs to be done."
That said, CBRE did not actually analyze any correlation between the growth of multi-unit hosts and legislation by city; there could be other factors at play.
While San Francisco might be a reference point in terms of short-term rental legislation, the lack of growth in multi-unit host share is all relative, pointed out Peter Cohen, co-director of the Council of Community Housing Organizations in San Francisco. "We are struggling with the impact of short-term rentals, tremendously," he said. The primary-residence requirement passed by the city, which essentially requires hosts to rent out only their primary residence, is difficult to enforce; only 1,800 hosts have registered thus far, out of 10,000 to 15,000 short-term rental units in the city -- about half of which are on Airbnb, Cohen estimated. Airbnb and similar services aren't responsible for ensuring their hosts register -- that law currently is being challenged in court -- and other relevant legislation was vetoed late last year.
"This is clearly no longer a mom-and-pop 'hosting' activity," said Cohen. "It's become here a profitable commercial enterprise. But rather than reigning in this 'hotelization' of our housing, Airbnb and other platforms seem to let them flourish. This report makes it clear why -- it's evidently the bottom line; the growth of the platform depends on the expansion of these commercial operators, not the mom-and-pop hosts."
In Nashville, multi-unit host revenue skyrocketed by 391 percent between 2015 and 2016. That's created a crisis in many neighborhoods, according to John Stern, president of the Nashville Neighborhood Alliance, where he says multi-unit hosts have purchased buildings solely to rent short term on platforms such as Airbnb. "Businesses belong in commercially zoned areas," he noted, "not in residential neighborhoods. Rampant illegal hotel operations are destroying the fabric of these communities."
Airbnb puts a different spin on that, of course, and has lauded the ability of its geographically dispersed hosts to bring tourist dollars into many neighborhoods that typically might not have otherwise been visited. The company has also pointed to its hosts' ability to house many attendees during large citywide events, when hotel rooms are scarce. The new report, according to Airbnb, doesn't tell the whole story.
"This misleading, inaccurate report was bought and paid for by the big hotels," said Airbnb public affairs lead Chris Nulty, "and is the latest example of the industry's willingness to say and do anything to protect their record profits, preserve their ability to price-gouge consumers and squash their competition.
"As the AH&LA already knows," Nulty continued, "many of their member inns, motels and hotels list rooms on our platform, so these are included in the very data on 'commercial' listings the big hotels seem so concerned about."
An Airbnb spokesperson couldn't provide the number of such hotel listings on the platform, but said there are thousands across the country. An AH&LA spokesperson noted that the hotel listings were not the focus of the report.