From Home-sharing to Ghost Hotels
FOR IMMEDIATE RELEASE
Fairbnb Coalition: majority of Airbnb’s Revenue is generated by commercial hosts
(TORONTO) Today, Canada’s national coalition pushing for fair rules for short-term rentals is releasing some interim figures (see appendix) on Airbnb’s business in Toronto. These figures are being made public prior to the release of the coalition’s white paper, which presents an in depth analysis of Airbnb’s housing market impact and proposes feasible, workable and achievable regulation.
“We feel compelled to share this data before the release of our official position paper mainly because the data shows, for the first time, what critics have said all along, that Airbnb’s business in Toronto is moving further and further away from the practice of home-sharing,” says Lis Pimentel, the chair of the coalition.
Fairbnb’s data highlights that by 2017, the majority of Airbnb’s revenue in Toronto derives from so-called multi-listing hosts, that is, from individuals or companies who operate 2 or more short-term rental listings at any given time. “If Airbnb were about home-sharing,” said Pimentel, “the total number of listings would be identical to the total number of hosts. This is not the case in Toronto.” The numbers show a drift in 2015 towards commercial use as the total number of Airbnb listings increased faster than the total number of hosts. This is a clear indication that ghost hotel operations disguised as “home-sharing” have become more common.
“What is most alarming,” Pimentel notes, “is 52% of Airbnb’s Toronto revenue now derives from ghost hotels.”
This fact flies in the face of Airbnb’s home-sharing narrative and its insistence that its hosts are ordinary people who occasionally rent out a spare room to make ends meet. The fact that a mere 16% of Toronto’s Airbnb host community generate 52% of its revenue is a clear indication that Airbnb has moved away from its humble home-sharing beginnings and that regulation is needed to reign in Toronto’s flourishing ghost hotel sector.
Appendix: From Home-sharing to Ghost Hotels Snapshot
Fairbnb.ca’s research shows that Airbnb listings have grown dramatically since 2010, surpassing 12,000 total short-term rental offerings as the year 2016 came to a close (Figure 1).
Figure 1: Total Number of Listings over Time. Source: City of Toronto[i] and Tom Slee
Figure 2 tracks the total number of hosts and listings over time. If Airbnb truly was a home-sharing company, the total number of short-term rental listings would be identical to the total number of hosts. Yet, as Figure 2 highlights, this is no longer the case as more and more hosts operate two or more entire home listings at any given time.
Figure 2: Total Number of Airbnb Hosts and Listings 2010-2016. Source: Tom Slee
By the end of 2016, the number of hosts who operate multiple-listings is relatively small, representing only about 16% of Toronto’s Airbnb host community (Figure 3).
Figure 3: Host Types (November 2016). Source: Tom Slee
Yet, as Figure 4 illustrates, this relatively small number of multi-listing hosts is responsible for nearly half of all of the reviews left by guests and visitors (Figure 4), suggesting that they run fairly intensive business operations or what we call ghost hotels.
Figure 4: Reviews by Host-type over Time. Source: Tom Slee
Another indicator that Airbnb enables less and less home-sharing relates to the number of reviews generated by room type (Figure 5). Over two-thirds of the reviews in Toronto are generated by so-called “entire-home listings,” that is, by whole apartments, condos or houses. It is clear that these places are not shared but rented to guests and visitors in their entirety and exclusivity.
Figure 5: Reviews by Room Type (November 2016). Source: Tom Slee
Most alarming to Fairbnb.ca is the fact that a mere 16% of Toronto’s host community generates the majority of Airbnb’s revenue in Toronto (Figure 6). As 2016 came to a close, ghost hotel operators accounted for the majority of Airbnb’s revenue in Toronto.[ii]
Figure 6: % of Total Revenue by Host-type (November 2016). Source: Tom Slee
[i] City of Toronto. 2016. Developing an Approach to Regulating Short-Term Rentals. Toronto: Municipal Licensing and Standards.
[ii] To approximate actual revenue figures, we multiply the number of reviews by the nightly rate and an estimate of the average length of stay across all listings. We then adjust the resulting figure for the proportion of visitors who leave a review. This calculation is performed to account for single and multiple listings to estimate overall revenues before we account for the share of total revenue generated by multi-listing hosts.