NATIONAL REPORT—The American Hotel & Lodging Association (AH&LA) is expanding its review of Airbnb and its impact on the lodging industry with a deep dive into the short-term rental website’s commercial activity in Boston.
During the conference call led by Vanessa Sinders, SVP, government affairs, AH&LA, she noted that more than half of Airbnb revenue comes from commercial operators, which are running illegal hotels and not following legitimate laws.
As a result of Airbnb’s presence in Boston and other major cities, Sinders explained that residents are bearing the brunt. “They face chronic problems, such as the unruly behavior of strangers disrupting communities and undermining the social fabric of the neighborhood,” she said on the call.
The study was conducted by John O’Neill, MAI, ISHC, Ph.D., professor of hospitality management and director of the Center for Hospitality Real Estate Strategy in the School of Hospitality Management at Penn State University, and examined activity on Airbnb between October 2014 and September 2015. In addition, AH&LA previously released studies on the impact of Airbnb in Phoenix, Chicago and Los Angeles markets.
In the report, two overlapping groups of hosts emerged: multiple-unit operators who rent out two or more units and full-time operators who rent their units 360 or more days per year. These two subsets of operators generate a substantial amount of Airbnb’s revenue, according to the findings.
Among the key findings:
• Nearly all of Airbnb’s revenue in the Boston region—83% or almost $40 million—comes from operators who list units for rent more than 30 days per year.
• More than half (52%) of Airbnb’s Boston-area revenue—almost $25 million—comes from operators who listed properties for rent more than 180 days per year.
• Operators listing multiple units for rent drove almost half (45%) of Airbnb’s revenue in the Boston region—$21 million.
Paul Sacco, president & CEO, Massachusetts Lodging Association, explained that Airbnb concerns are not just on the city level; Airbnb is an issue for all hospitality businesses in the state and is encroaching on residents as well.
“It really is a statewide issue not limited to greater Boston. There’s a large amount of activity on Cape Cod and the Berkshires as well. We’ve been dealing with this for three years. We’ve worked with the legislature, there have been bills put forth and hopefully more will be put forth to our benefit,” he said. “We represent 122,000 jobs in the state and these illegal lodging businesses are dodging regulators. They are skirting legislation and taxation. It’s also taking a sizeable amount of inventory in the Boston area in a tight housing market.”
According to Rachel Solem, owner of Irving House at Harvard and Harding House, it’s all about fairness in the big picture—small business owners want to level the playing field.
“I’m in touch with colleagues who are small property owners and they are at a loss of what to do. I comply with the regulatory standards, but there is a lot to hospitality and hosting travelers because they need extra attention and we are staffing to respond to that. In an Airbnb, you don’t get that support,” Solem explained. “We also recognize the pressure it puts on neighbors and we are concerned. We take care of our guests and that’s not true with Airbnb; it’s not the same kind of support.”
—Corris Little