EXCERPTED FROM THIS WEEK'S SustainableTourism2015.com weekly update. To get yours CLICK HERE
AirBNB – who’s sharing with whom? It all started so well but now the worldwide clouds are forming
The sharing economy seemed a very good idea at the time. It seemed to offer really authentic accommodation and the opportunity for locals to engage directly with visitors. And, of course, all were to share in the proceeds of this new, people-powered innovation.
But now AirBNB is the third biggest Unicorn (billion-dollar plus tech start) and its investors now own a business valued at $25bn – many are asking what has happened.
In the United States: “The face of Main Street, the wallet of Wall Street”
A new report shows that 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 report: “From Air Mattresses to Unregulated Business: An Analysis of the Other Side of Airbnb” focuses on “hosts” in these top markets who rent multiple units and the length of time they are renting their units. It tells a very different story about who is driving revenue on the site.
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 American Hotels and Lodging Association President and CEO Katherine Lugar. “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. 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.”
Download the whole report HERE:
In Australia “No care, no responsibility will take more than it will give”
In New South Wales alone, Airbnb now offers 15,000 listings, and recent analysis both in Australia and overseas has determined that between 25 – 35% of ‘hosts’ are operating as commercial non-resident landlords using the sites as a way to circumvent regulations.
Australia’s peak accommodation body, Tourism Accommodation Australia, called for urgent regulation of commercial short-term accommodation operators – AirBNBs should be subject to similar safety and operational regulations as legitimate operators
“Hotels, motels, serviced apartment, B&B and other legitimate short-term accommodation providers have a strict regulatory framework in place to protect their guests and ensure they operate fairly,” said TAA CEO Carol Giuseppi.
“In the past few months we have seen the results of the ‘no care, no responsibility’ attitude towards unregulated short-term accommodation with reports of assaults, property damage and a terrifying drug raid. Overseas, there have also been reports of deaths."
“The reality for many people involved in the so-called ‘collaborative’ economy is that they take rather than give. They contribute virtually nothing to employment, where as hotels and other legitimate operators employ 21,000 people in NSW. They contribute nothing to collaborative tourism promotion. They often avoid paying appropriate taxes and community charges."
AirBNB – who’s sharing with whom? It all started so well but now the worldwide clouds are forming
The sharing economy seemed a very good idea at the time. It seemed to offer really authentic accommodation and the opportunity for locals to engage directly with visitors. And, of course, all were to share in the proceeds of this new, people-powered innovation.
But now AirBNB is the third biggest Unicorn (billion-dollar plus tech start) and its investors now own a business valued at $25bn – many are asking what has happened.
In the United States: “The face of Main Street, the wallet of Wall Street”
A new report shows that 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 report: “From Air Mattresses to Unregulated Business: An Analysis of the Other Side of Airbnb” focuses on “hosts” in these top markets who rent multiple units and the length of time they are renting their units. It tells a very different story about who is driving revenue on the site.
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 American Hotels and Lodging Association President and CEO Katherine Lugar. “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. 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.”
Download the whole report HERE:
In Australia “No care, no responsibility will take more than it will give”
In New South Wales alone, Airbnb now offers 15,000 listings, and recent analysis both in Australia and overseas has determined that between 25 – 35% of ‘hosts’ are operating as commercial non-resident landlords using the sites as a way to circumvent regulations.
Australia’s peak accommodation body, Tourism Accommodation Australia, called for urgent regulation of commercial short-term accommodation operators – AirBNBs should be subject to similar safety and operational regulations as legitimate operators
“Hotels, motels, serviced apartment, B&B and other legitimate short-term accommodation providers have a strict regulatory framework in place to protect their guests and ensure they operate fairly,” said TAA CEO Carol Giuseppi.
“In the past few months we have seen the results of the ‘no care, no responsibility’ attitude towards unregulated short-term accommodation with reports of assaults, property damage and a terrifying drug raid. Overseas, there have also been reports of deaths."
“The reality for many people involved in the so-called ‘collaborative’ economy is that they take rather than give. They contribute virtually nothing to employment, where as hotels and other legitimate operators employ 21,000 people in NSW. They contribute nothing to collaborative tourism promotion. They often avoid paying appropriate taxes and community charges."
SEE VIDEO CLICK IMAGE In the UK “BHA goes head to head with Airbnb in UK parliament”
“Industrial in scale, professional landlords, operating outside UK regulations and endangering the safety of the public.” said British Hospitality Association CEO, Ufi Ibrahim, providing evidence to the Business Innovation and Skills Committee on behalf of the hospitality and tourism industry.
Ms Ibrahim argued that home exchange websites are made up of many large-scale landlords, operating multiple properties rather than individual homeowners which the sharing economy was intended to service.
Ms Ibrahim shared industry research, which estimates that:
In avoiding planning regulations, the effect is the further reduction of already stretched housing stock; disrupting communities with increased noise; crime and safety issues; and avoiding health and safety regulations. In London, the reduced housing stock is putting further pressure on the already stressed housing market, pushing up rents and property prices. Short-term lettings on Airbnb can attract a premium over longer term renting to tenants like hard-working Londoners.
Ms Ibrahim informed the Select Committee that the industry is particularly concerned that the UK’s trusted reputation as a high quality and safe tourist destination could be damaged if guest health, safety and security checks are not properly delivered.
She offered 3 key proposals
1. Home exchange websites should share with government bodies (London Authorities & Councils, HMRC) named host level data to demonstrate clearly:
3. Home sharing websites should require much stricter checks on safety and security, something other sharing economy platforms, such as Uber, have already implemented.
Valere Tjolle
So, what are the opportunities?
AirBNB, will certainly expand into delivering the whole destination experience – they have been experimenting with this for some years. Is this an opportunity for destinations to incorporate a wealth of experiences under their own AirBNB-style brand?
Is it an opportunity for tour operators and travel agents to offer an AirBNB style service incorporating unusual accommodations?
VT
“Industrial in scale, professional landlords, operating outside UK regulations and endangering the safety of the public.” said British Hospitality Association CEO, Ufi Ibrahim, providing evidence to the Business Innovation and Skills Committee on behalf of the hospitality and tourism industry.
Ms Ibrahim argued that home exchange websites are made up of many large-scale landlords, operating multiple properties rather than individual homeowners which the sharing economy was intended to service.
Ms Ibrahim shared industry research, which estimates that:
- 40% of all home-exchange website listings are ‘professional landlords’ running unregulated ‘pseudo-hotels’
- The top 1000 home-exchange hosts are netting £150m of accommodation revenue annually
- Half of all home-exchange listings are entire properties rather than rooms in host’s own homes
- London is most affected with the largest number of landlords (40% of all listings in London are multiple property owners renting accommodation on a short-term basis year-round)
In avoiding planning regulations, the effect is the further reduction of already stretched housing stock; disrupting communities with increased noise; crime and safety issues; and avoiding health and safety regulations. In London, the reduced housing stock is putting further pressure on the already stressed housing market, pushing up rents and property prices. Short-term lettings on Airbnb can attract a premium over longer term renting to tenants like hard-working Londoners.
Ms Ibrahim informed the Select Committee that the industry is particularly concerned that the UK’s trusted reputation as a high quality and safe tourist destination could be damaged if guest health, safety and security checks are not properly delivered.
She offered 3 key proposals
1. Home exchange websites should share with government bodies (London Authorities & Councils, HMRC) named host level data to demonstrate clearly:
- Who is letting over 90 nights in London?
- How many people are letting out a secondary residence?
- How much tax is due on the income?
- How staff are employed and paid to service multi-rentals?
3. Home sharing websites should require much stricter checks on safety and security, something other sharing economy platforms, such as Uber, have already implemented.
Valere Tjolle
So, what are the opportunities?
AirBNB, will certainly expand into delivering the whole destination experience – they have been experimenting with this for some years. Is this an opportunity for destinations to incorporate a wealth of experiences under their own AirBNB-style brand?
Is it an opportunity for tour operators and travel agents to offer an AirBNB style service incorporating unusual accommodations?
VT
