Why is Airbnb offering a bonus for new hosts in Vancouver?

Here’s an odd thing. Airbnb has a new program in Vancouver, offering $250 cash bonus for first-time hosts. It’s odd for two reasons. First, the company has been under pressure for exacerbating the city’s housing affordability crisis (Vancouver’s housing market is the most expensive in North America), so this looks like asking for more trouble. Second, Airbnb in Vancouver is already going gangbusters, so why does Airbnb feel the need to pay out to attract new hosts?

Here is a chart that shows what I mean by “gangbusters”. The y axis is the total reviews per month for a set of North American cities, with Vancouver picked out in bold red. The total number of visits is probably about one-and-a-half times this number, so it’s a measure of overall Airbnb traffic in the city. You can see there is a seasonal trend, with traffic dropping off over winter and picking up again in summer, but it’s pretty clear that this summer’s peak is well above last summer for most of these cities. Vancouver is now running at well over twice the volume of last year. (Click to expand, and hit the back button to return to the post)

vancouver_1But there’s another way of looking at this growth. Vancouver is again highlighted in bold red in the chart below, which unpacks the overall traffic shown above. The x axis is the number of listings in the city, and the y axis is the average occupancy rate measured as the number of reviews per month per listing. Multiply them together and you get the total traffic for the city.

For most cities the trend is to more listings, with the occupancy rate going through the same seasonal trend we saw up above. (Although Philadelphia and Chicago are not doing so great, and San Francisco (the curly green line) seems to have hit a limit of listings, probably because of the drastic action Airbnb is taking to legitimize itself in that city. But that’s another story.)


An increase in traffic can come about two ways: more listings, or higher occupancy, and there’s a bit of a trade-off between the two. So Toronto and Montreal (yellow and brown) have seen a rapid growth in the number of listings and the occupancy rate has grown significantly, but not massively. Meanwhile Vancouver has not seen such a rapid growth in the number of listings, but the occupancy rate is growing like topsy.

Now if a hotel was counted as a single listing it would be way to the top left of this chart, while Airbnb wants to claim that its hosts are only occasionally renting out the place in which they live — which translates into the bottom right. The fact that Vancouver listings are getting used more often could be bad news for Airbnb in its battle for legitimacy, so if it can attract more hosts they may take up some of the slack and move the line out to the right and down a bit.

To step back a bit, you do have to wonder if “bottom right” or “top left” makes much of a difference from the actual affordability and neighbourhood impact perspective. If you live in an apartment building and every other person rents out their place once a month, that’s the same impact in terms of traffic, extra utilities and the other things people complain about than a small number of people renting out their places all the time. And thousands of tourists staying in a small neighbourhood will have a similar impact (good and bad) in some ways if they are scattered across many listings or huddled together in a few. And what about the impact on house prices in high-traffic hotspots? It’s not obvious to me that a large number of low-occupancy listings has less of an impact than a small number of high-occupancy listings, though I could be convinced either way.

Anyway, I feel pretty confident that Airbnb is making its offer to offset the bad image that goes with the high-occupancy rates that Vancouver is now experiencing. And if there’s an offer for Seattle hosts, well that will confirm my suspicions.

Update: Thanks to Caroline O’Donovan for pointing me to this: an Airbnb host promotion in Seattle. Suspicions confirmed!

Airbnb in Barcelona: two readings

A story on Ada Colau, who may be the world’s most radical mayor, hjighlighte how Airbnb can create problems for the cities where it operates:

Colau’s stated priority is to move Barcelona away from what she considers “massified tourism”, with no thought for sustainability, strategic planning or input from the public. “Until now, all we have had were private initiatives doing what they wanted,” Colau told me. “This has led to a model that is out of control.” She added: “We suffered the same short-sighted model here with the real estate bubble. We are trying to prevent the same mistakes happening again with tourism.”

For a detailed look behind the scenes, Albert Arias Sans and Alan Quaglieri have a new paper called “Unravelling Airbnb: Urban Perspectives from Barcelona” (sadly, login required). They investigate the claims made in Airbnb’s “reports” on the city and show each of them to be false:

Airbnb claim: The vast majority of Airbnb accommodation is located outside the areas with major concentrations of hotels.
Arias/Quaglieri: There is a strong correlation between Airbnb listings and the presence of hotels. Airbnb supply is located to a large extent in the same neighbourhoods as hotels.

Airbnb claim: Airbnb focuses on a new type of traveller seeking the authentic to immerse themselves in other cultures.
Arias/Quaglieri: Analyzing languages spoken by hosts: the composition of the Airbnb host community is different from the profile of the area as a whole. 
Airbnb appears as a field for the ‘cosmopolitan consuming class’, where hosts and guests share a similar approach to the city around a ‘cosmopolitan sense of local’ from which a large proportion of the rest of the residents of Barcelona are excluded.

Airbnb: proceeds from Airbnb allow hosts to cover their basiexpenses and reach the end of the month
Arias/Quaglieri: Airbnb hosts are not representative of the local communities. They are far more educated, have fewer children, and live in less-crowded households. While Airbnb hosting may help solve the prolems of people living in middle- to upper-class neighbourhoods, it is not a resource open to those in the poorer neighborhoods.

A really interesting read, which is a significant step forward in the debate about Airbnb’s impact on the major tourist centres.

Airbnb’s business in New York City

According to the New York Times, Airbnb yesterday “released” data about their business in New York City. As I first reported on Airbnb in New York two years ago, when that business was a lot smaller, I was interested. Airbnb’s Chris Lehane says “Our hope is that people will understand 99 percent of people on Airbnb in New York City are using it as an economic lifeline,” and who could object to that? Would the real numbers show that we critics are wrong?

My work has been based on scrapes of the Airbnb web site (now done better by Murray Cox at Inside Airbnb), so it’s necessarily less accurate than Airbnb’s own data. On the other hand, I don’t have a $25 billion market valuation at stake in the answer, so it may be easier for me to be honest in my reporting.

I hoped that “released” meant that I could get the data, but I was quickly disillusioned. It turns out to mean “made available only by making an appointment to visit Airbnb’s New York City office”, which is a bit of a joke. Instead, all we get is the summary statements from Airbnb PR. Still, it is better than nothing. So I read on…

My first response to the New York Times article was dismay at this statement: “From November 2014 until November 2015, some 93 percent of revenue earned by active hosts in New York City who share their entire home came from people who have only one or two rental listings on the platform”. That is a number far higher than I had seen, and suggests that a much bigger portion of the Airbnb business is their archetypal “regular New Yorkers occasionally renting out the home in which they live” than I had thought. I had reported about 40% of Airbnb’s business coming from people with more than one rental listing and the numbers suggested 20% of business coming from people with more than two listings. Have I and other critics been getting it wrong? In the absence of complete data we have to make some estimates about income after all. This would be unfortunate as I have just PUBLISHED A BOOK ABOUT THE SHARING ECONOMY THAT MAKES A GREAT CHRISTMAS PRESENT and that is critical of Airbnb.

But today the New York Times ran a correction: “From November 2014 until November 2015, some 75 percent of revenue earned by active hosts in New York City who share their entire home came from people who have only one or two rental listings on the platform.”  (my emphasis). The change from 93% to 75% is significant: that’s almost four-fold increase in the proportion that comes from three-or-more listers. All of a sudden the Airbnb numbers look much more like those collected by myself and other external investigators, which Airbnb routinely say are inaccurate.

So what’s the real picture? Yes, 25% of Airbnb revenue in NYC comes from people renting out “more than two” listings. My own estimate actually comes out below that at 20% so my estimates are more friendly to Airbnb’s “regular people” pitch than reality. My numbers also show that about 40% of total revenue comes from people with more than one listing, which is just what I reported two years ago. It’s likely that the real number is closer to half, given the way my estimates seem to underestimate revenue from “more than three” listers. In short, far from showing that the critics were wrong, Airbnb’s numbers show that our data, which they have been rubbishing, is pretty good and even generous to them: their numbers suggest that even more of the business comes from multiple listers than we have been claiming.

So here’s the right way to say it. “From November 2014 to November 2015, about half of Airbnb’s revenue in New York City comes from multiple-listing hosts. Hosts with three or more listings contribute 25% of the total.” That’s a much more commercially-focused operation than the original claim.

The 93% number that Airbnb gave is, by the way, their projection on next year’s figures, to  which I can only say – if you’re going to release data, maybe talk about the data and not about your dreams and aspirations? So far their supposed efforts to clamp down on hosts with many listings have been half hearted, and given that it may cut into their revenues we should not give it a lot of credibility. Airbnb has been talking the talk a long time about this challenge on their site, and yet so far they have done basically nothing about it (I’m travelling and don’t have access to the full data set at the moment, or I’d show you).

Maybe more on this later. But for now, the new Airbnb numbers do nothing to undermine the critics’ case.


A few updates

I’ve completed my book manuscript, and it’s time to return to blogging. I’m going to change things a bit. Mostly until now I’ve done fairly long-form essays every now and again, but I’m going to try going more frequent and more links than original stuff (so if you get the emails you may want to click that Unsubscribe button). I don’t think there is a place that aggregates Sharing Economy events and commentary, so I’m going to try that for a while.

To start off, here are three interesting pieces. All links open in a new tab.

The indefatigable Ellen Huet highlights Uber’s continual efforts to raise its take of each ride: it has now raised its commission to 25% in five more cities.

In the last few months, Uber has quietly bumped up commissions from 20% to 25% for new drivers in five cities. New York City drivers who joined as of April will pay 25%, as well as drivers in Toronto, Indianapolis, Boston  and Worcester, Mass., who joined as of August, the company confirmed.

San Francisco drivers who joined in the last year still pay a 25% commission. An Uber spokeswoman declined to say whether the 30% commission pilot program has spread to more drivers or markets.

Keeping the higher commission to recent drivers doesn’t actually limit its impact very much. Uber’s workforce is constantly churning and growing: In January, an Uber-conducted study showed a quarter of its active drivers had joined in the last month. It’s unclear if raising the commission deters new drivers from signing up, but if the policy has spread from its first test city, it suggests it makes economic sense.

The churn among Uber’s drivers matches that in Airbnb’s hosts: new people try it out, and a lot decide it’s not for them. You would think that the more Uber takes from each ride, the weaker its claims that it is not responsible (just a technology company) when things go wrong, but it looks like they are confident they can take more money without taking on more risk.

Ilya Marritz in WNYC news reports on city inspectors chasing down potential illegal rentals:

WNYC has obtained detailed records from a year and a half of inspections. Here’s what we learned by reading through all 2,684 reports.

…from October 2013 through April 2015, the city received 1,616 complaints about illegal hotels. In the same period, inspectors made 2,684 visits looking for rentals that violate local laws

While Airbnb is responsible for most, it surprises me how many reports are from non-Airbnb listings. In particular, Priceline has more than HomeAway.

Airbnb – 101
Booking.com (owned by Priceline)– 40
Portobello Suites – 11
VRBO (owned by HomeAway)– 11
Homeaway.com – 10
Tripadvisor – 5
Agoda (owned by Priceline)– 3
Expedia – 3

I do wish she had given us more of the report details, but there are some gems there, like this one:

“Unidentified Woman Opened Door And After Saying She Did Not Live There Attempted To Slam Door On Identified Police Officer. Woman In Back Screamed To Her Dont Let Them In. Male Came And Id Self As Owner Of Multiple Apts And Said We Should Be Going After Real Criminals Not What They Are Doing.”

What’s going on with Airbnb in LA?

Today’s LA Times says “Airbnb cuts ties with vacation-rental firms in Los Angeles“. The story says that “Two of the home-sharing giant’s largest Los Angeles-area hosts—vacation-rental firms with dozens of apartments apiece—said Friday that Airbnb had dropped them from its site this week, canceling upcoming bookings and scrubbing their listings.”

An Airbnb rep called one of the affected landlords (AE Hospitality) and “mentioned the growth plans of Airbnb conflicts with us listing on their website… No explicit reason was given.”

I got a call from Tim Logan, one of the reporters on the story, asking if I could see anything going on, and was able to take a quick look and (at that time) it looked like 10 of the top 13 hosts (in terms of number of listings) were completely removed from the site, and I’m quoted in the story with that figure. Now I’ve been able to take a more complete look and can say a bit more.

There are two questions, of course. One is “What is happening?” What listings are being removed, whose are they, and what can we tell about those listings? The second question is “Why?” Let’s start with the “What?”

I ran a survey of Los Angeles in October 2014, and another over the last couple of days. Here are the main findings.

There is always a lot of flux in Airbnb listings, and much of that comes from people who give the service a try and then decide it’s not for them. But in Los Angeles there is something else. Here is a table showing the top   hosts (by number of listings) from October 2014, and the number of listings they now have on the site.

Table 1: The top hosts (by number of listings) in October 2014, and the number of listings they had then (2nd column) and have now (3rd) on Airbnb. The link goes to the host page (if it exists) or is redirected to a generic Airbnb page if the host has been removed.
Host ID October 2014 April 2015 Reviews Average Rating
3965199 74 0 15 4.50
1463129 73 0 397 4.47
558295 50 0 113 4.54
293855 30 0 296 4.26
7954 26 0 47 4.60
295792 23 0 143 4.68
3281907 23 0 25 4.50
66892 22 0 65 4.68
2917744 22 1 291 4.85
4925293 20 0 27 4.85
9088345 20 0 120 4.41
465624 18 18 789 4.44
8608492 18 0 39 4.42
3392276 16 18 43 4.67
8518444 16 21 23 4.52
49765 15 13 1 0.00
148358 15 11 160 4.95
1497543 15 15 252 4.76
3127239 15 15 184 4.32
8206200 15 15 109 4.39
57161 14 16 145 4.31
1466173 14 15 517 4.30
3324376 14 15 101 5.00
11907135 14 0 39 4.18
1316725 13 14 9 4.83
1458653 13 13 291 4.60
3947940 13 13 142 4.23
7266554 13 24 127 4.58
16151602 13 14 67 4.34
489690 12 12 46 4.72
1173362 12 0 150 4.45
2324191 12 15 173 4.32
3967730 12 14 118 4.64
4265938 12 8 42 4.11
5592355 12 10 68 4.62
219283 11 16 34 4.78
239712 11 12 590 4.23
1221532 11 12 25 4.30
1254174 11 12 86 3.90
3097566 11 11 88 4.45
9762413 11 12 253 4.57
9928881 11 0 20 4.40
19341612 11 0 12 4.54
213865 10 9 158 4.46
2622454 10 10 780 4.52
5281327 10 4 212 4.65
5425196 10 0 190 4.17
9505402 10 19 247 4.65
9759851 10 11 8 4.69
3343353 9 14 14 4.89

Airbnb has basically removed all the top hosts (who had 20 or more listings) and also removed a smattering of others. (If you have a booking at this listing I would make other plans.)

So why has Airbnb done this? They made their usual bland, substance-free comment to the LA Times: that the company’s “mission is to connect hosts with guests and provide a quality, local and authentic experience. We routinely review our platform for market quality and adherence to this mission.”

Quality looks out: as a user to the site what you see is the rating of the listing, and many of the eliminated hosts have high average ratings. For example, the Urban Flat Team have had their listings removed but had an average rating of 4.85 (out of five), while the Venice Beach Hostel has a rating of only 3.90 (which is pretty crap) but is still on the site.

It’s also nothing to do with the type of listing. Most of the top listers are listing out mainly “Entire home/apt” listings (as opposed to a private room in a house or a shared room) but then so does Prive Luxury Rentals and they have actually increased their number of listings from 16 to 21.

What’s left is the statement of the sales rep to the AE Hostel agency: that these listings are interfering (probably with no fault of their own) with Airbnb’s public image. The LA Times mentions the possibility
of maneuvering in advance of an IPO, and this must be in the minds of some of the Airbnb executives. Also, the LAANE report from last month may be having an impact.

My guess is that Airbnb knows it has to look after its image as a peer-to-peer company, and that they are removing some of the most high profile professional partners from the site in preparation. So all well and good (although hardly fair on those partners), but is it sincere?

Probably not. Here are a few facts that Airbnb will probably not publicise:

  • In October 2014 there were 49 hosts with 10 or more listings in LA. Now there are 60.
  • In October 2014, visits to Airbnb hosts in LA were split evenly between “single-lister” hosts and “multi-lister” hosts. Now the balance has tilted slightly towards multi-listers: their percentage has increased from 50% to 52%.
  • In New York, where Airbnb previously had a clean-up of large listers, the number of hosts with 10 or more listings has increased from 19 to 46 between October 2014 and March of this year.

In short, the professionalization of the Airbnb business continues, and this looks like just an attempt to remove some of the more obvious commercial companies.

Could it be something else? Of course it could, but if Airbnb wants to be taken seriously as a company that can regulate itself (and it really does) then it needs to come clean with the reasons for its actions rather than hiding between vacuous PR speak and turning, seemingly at random, on its partners.

Yesterday in Airbnb

First, this report on Airbnb in Los Angeles, by the Los Angeles Alliance for a New Economy (LAANE), is fantastic, especially compared to Airbnb’s own study from December. It mixes data with thoughtful commentary with investigative work that could only be carried out by someone who knows the city. (I did contribute a bit of help in the data collection area, but had nothing to do with writing or the report itself.) Here are some highlights.

  • Airbnb’s report has this to say about its impact on neighbourhoods (in total):

Airbnb distributes economic impacts to neighborhoods that have not traditionally benefited from tourism spending. With Airbnb properties in more than 80 Los Angeles neighborhoods, Airbnb visitors are staying in and exploring places they might never have otherwise visited.

The LAANE report shows that the Airbnb business is, in fact, concentrated on areas that are already heavily affected by tourism: while “AirBnB has units listed throughout Los Angeles, but just nine of the City’s 95 neighborhoods are responsible for generating 73 percent of the company’s revenue.” In tourist hotspot Venice, one in eight units are now Airbnb rentals.

  • 1010 Wilshire is a high end apartment building with 227 units in Downtown Los Angeles; but 20% of its units are now listed as tourist accommodation on Airbnb.
  • The host you see on the site, with a photo and personal note, may not actually be the host. “Danielle and Lexi” were two young women with “verified ID”, but it turns out that they are just a front for Ghc vacation property rentals.

And there’s a lot more. Worth a read if you have any interest in the subject. The report has been picked up by the LA Times, Curbed LA, and more.

Elsewhere, Inside Airbnb has extended its beautiful maps to Portland. They have also collaborated with Willamette Week to chart the shape of Airbnb’s business in the city, and the results will be familiar to readers of this site: Airbnb’s story of being a site where “regular people occasionally rent the home in which they live” is misleading.

The real Airbnb story is gradually getting out there, of a site that uses the heartwarming stories of a few of its hosts to provide a cover for a growing cadre of professional renters using the site to avoid municipal regulations around safety (no fire inspections), zoning (driving gentrification of tourist areas), and taxes. It’s good to see diligent, talented people like LAANE and Inside Airbnb push the debate forward.

Airbnb in Barcelona

So Airbnb is in trouble in Barcelona (Guardian, El Pais, El Pais again). The company was fined €30,000 by Catalonia’s local government the Generalitat “for illegally commercializing short-stay apartment rentals that are not listed on the Catalan Tourism Register.” Here are a few notes for context.

Barcelona has a particular problem with tourists: it has too many of them. “The city’s 1.6 million residents have seen the number of visitors to the city skyrocket from 1.7 million in 1990 to more than 7.4 million in 2012.” As one besieged local says, “We’re part of what they’re selling, but they’re destroying it.”

Airbnb has done its usual lightweight study on the city. It’s interesting partly for what it doesn’t say, because as a city with a highly developed tourist industry, Barcelona is a sign of what is likely to be the pattern for Airbnb for the future. So, here’s a quick rundown on Airbnb’s usual economy with the truth.

I actually found more hosts than the 4,000 that Airbnb claims: my recent scan of their site picked up 6442 hosts and 11284 listings. (part of a series of studies: here, here, and also here).

Airbnb avoids its usual claim of “the overwhelming majority of Airbnb hosts in Sydney are ordinary residents who rent out the home they live in” because it’s just not true. 75% of hosts rent out a single listing, which is lower than in most other cities. And the majority of Airbnb listings come from people who are renting out more than a single offering, and I estimate that over 60% of Airbnb revenue comes from multiple listers.

The idea that Airbnb is made up of hosts sharing a part of their home also fails in Barcelona. 59% of listings are “whole home”, and these make up a whopping 81% of Airbnb revenue from the city.

In short, Barcelona is exactly the kind of place that needs to regulate tourism, in order to keep a balance between the income from tourists and preserving the city as a place to live, work (and visit). Airbnb is promoting its “home-sharing” story to justify its lack of interest in these regulations, but the story has even less truth to it than in New York and elsewhere.