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We Live Here

06 Apr 2017

Airbnb: facts and smokescreens

Founded in San Francisco in 2008, Airbnb has been promoted as an online booking platform that supports young creatives and people on low incomes, hoping to make extra money out of spare rooms.

Initial acceptance in various cities depended on local laws and legislation, but by late 2016 Airbnb had more than three million listings worldwide and was valued at $US30 billion.

With the availability of research data, a growing disparity has emerged between the image Airbnb portrays and the reality of who is profiting from its site.

InsideAirbnb is an independent, non-commercial set of tools and data utilising public information compiled from the Airbnb website that allows you to explore how Airbnb is really being used.

Data is now available for all the major cities of the world, where Airbnb has a presence, including Melbourne and Sydney.

We have analysed Airbnb data for nine cities: Amsterdam, Barcelona, Berlin, London, Melbourne, New York, Paris, San Francisco and Sydney, with the following results:

Airbnb listings by type of accommodation (Chart 1) show that overall 62.9 per cent of listings are for entire homes or apartments with only 37.1 per cent for private or shared rooms (range 49.5 per cent for New York to 87.5 per cent for Paris).

For Melbourne and Sydney the results were 56.6 per cent and 61.9 per cent respectively for entire homes or apartments.

Airbnb’s business model is based on hosts renting out spare rooms in their private homes. How then does Airbnb, by its own criteria, account for 62.9 per cent of all its listings being illegal?

Airbnb listings by host (Chart 2) show that, although 67.8 per cent were “Mums and Dads”, almost a third (31.3 per cent) were commercial operators (range 20.8 per cent for Paris to 57.5 per cent for Barcelona).

For Melbourne and Sydney, with 12,174 and 23,615 listings respectively, the results showed that 38.8 per cent and 30.8 per cent were commercial operators.

The results for Melbourne, coming third out of the nine cities in this study with almost 40 per cent being commercial operations, are particularly disturbing – confirming that short-stay operators, whether using Airbnb or not, are well entrenched in this city – not paying taxes, or contributing to job creation, just lining their own pockets.

Occupancy rate per month and income per month (Chart 3) shows San Francisco, Berlin and New York with the highest occupancy rates and San Francisco and New York also having the highest income per month. Melbourne had the second lowest occupancy rate of 23.3 per cent but was fifth in income per month.

The stand-out result was Sydney with the lowest occupancy rate per month of all the cities (14.2 per cent) and the lowest income by a big margin.

One explanation for the Sydney result could be that the NSW Government recently gave the (yet to be ratified) green light to Airbnb, and may indicate investors jumping on the bandwagon with the lure of immediate riches creating an oversupply, thus depleting the rental market. If so it has back-fired with very few making any money, and supports reports coming in from around the world of a shortage of affordable rental accommodation, attributable to Airbnb and other similar platforms.

There are some lessons here for the Victorian Government, which has also been quick to embrace Airbnb.

On May 23, 2016, the day before the Owners Corporation Amendment (Short-stay Accommodation) Bill 2016 was to be introduced into the Victorian Parliament, AirbnbAction released a statement entitled “Airbnb welcomes new rules in Victoria to stamp out party houses” and included a photograph of the former Minister for Consumer Affairs shaking hands with the Airbnb country manager on the steps of Parliament House!

We Live Here has stated before that this legislation is a smokescreen, that owners corporations already have the powers to deal with unruly parties and bad behaviour, and we are pleased that a Parliamentary inquiry into short-stays is about to commence as a consequence of the Bill being defeated in the Legislative Council.

We would like to work with the government in coming up with a Bill that recognises all parties to the debate equally – including Airbnb and residents – so there is a level playing field for all.

We want Melbourne to retain its rating as one of the most liveable cities in the world and doesn’t end up as a city of ghettoes in the sky.

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