The growth of Airbnb

In talking about Airbnb’s impact on housing and the questions of whether and how governments should intervene to protect housing supply and affordability for residents, two facts are often raised: that Airbnb is not the only short-term rental (STR) platform and that STRs existed before Airbnb launched the first version of its website in mid-2008. These facts are typically used to support the argument that there’s nothing really unique or new about Airbnb, so there’s no need for governments to act or to change their current approaches to STR regulation.

It’s true that the practice of listing STRs online has existed since the mid-1990s and the offline (print advertising and word of mouth) segment of the market for much longer than that. VRBO, an early market leader in online STRs, was founded in 1995 (and is now owned by HomeAway).[1] The U.S.-based Vacation Rental Managers Association (VRMA) has existed since 1985.[2] However, traditionally the industry has been concentrated in a limited number of tourist hotspots, resorts, and rural or remote locations.

Obviously, that’s no longer true. In the last five to ten years, the availability of new consumer information technologies (such as smartphones, portable global positioning systems and social media) and the shift in cultural values toward “collaborative consumption” and “sharing” (triggered in part by the recession that followed the recent global financial crisis) have combined to produce a sharp increase in the popularity of STRs. (I have little use for the term “sharing economy,” which I find vague and misleading, but I won’t go into that here. I instead recommend reading critiques such as this one, by Tom Slee.)

The increase in the popularity of STRs is evidenced by Airbnb’s rapid growth, and also the fact that the growth has not come at the expense of HomeAway, arguably its biggest rival. In 2015, the publicly traded HomeAway, which calls itself “the world leader in vacation rentals,” reported a 29 percent increase in its 2014 annual revenue, to a total of $446.8 million.[3]  That followed an annual revenue increase of 24% the previous year ($347 million in 2013).[4] The company attributed its 2014 revenue growth in part to an increase in paid listings (17% higher than 2013).[5] These growth trends were also reflected in the VRMA’s membership, which increased by a record 20 percent in 2014 (to include 473 manager members).[6] Meanwhile, the National Association of Realtors reported that 2013 sales of U.S. vacation homes were up by 47 percent since 2011 (to 717,000), with 89 percent of buyers planning to rent out those new homes within a year.[7]

If this STR growth had somehow stayed within the confines of beach and ski resorts, rural retreats, and a limited number of high-priced urban hotspots, it might not have become a urban housing affordability and equity issue, as I believe it now is (and has been for a while already). But that has not been the case. There’s been massive growth in cities, as well as expansion to new communities not previously viewed as tourist destinations, such as Winnipeg and Edmonton in Canada, and Spokane, Washington and Grand Rapids, Michigan in the United States.[8]

Listings estimates and growth 

There were no Airbnb listings before Airbnb launched its website in mid-2008, obviously, so the starting point was zero. It now claims more than one million listings (as does HomeAway) in 34,000 cities and 190 countries. I realize that many people who listed properties on Airbnb when it first launched were already renting out those properties and advertising them using other methods, so it’s not that every Airbnb listing represents a net increase in STRs. It’s also true that an unknown percentage of people currently list their properties on more than one STR platform. HomeAway and Airbnb target different segments of the STR market (HomeAway apparently being less interested in the urban and more so in the family getaway segment), but there is still an unknown amount of overlap.

Nevertheless and in spite of HomeAway’s tagline, based on Airbnb’s size and reach, as well as its public profile (venture capitalists are apparently fed up with hearing new start-ups described as the “Airbnb of X”), I think it has a defendable claim to being the most popular STR platform, certainly in the urban context. So, for the sake of better understanding the growth of Airbnb listings from zero to where they are now, I thought it would be useful to compile a list of estimates for various places. You’ll find them for about 30 locations, with dates and sources, below.

Caveats

I emphasize that these are estimates. Airbnb’s own website limits search results to maximum of 1,000, making it difficult-to-impossible for an ordinary person to tell how many Airbnb listings exist in a given location if that number exceeds 1,000.

These estimates come mainly from media accounts, which do not always cite sources. Others are from researchers who have scraped Airbnb’s website, or from Airbnb itself, though it doesn’t often provide such figures. Note that in some cases the figures are for hosts (who may have more than one listing) and in others for the listings themselves. Given the rapid increase in listings and also the seasonal aspect of tourist-driven STR bookings, it’s also important to take note of the date of each estimate. The dates of these estimates range from 2010 to a couple days ago. Where I’ve found more than one estimate (NYC for example), I’ve listed them in date order. There are a few notable differences in figures for around the same date (e.g. Paris) and I can’t really explain those, except to point to differences in what’s being counted, geographic scope (what’s included in the boundaries of Paris, for example), definitions and methodologies. It’s also true that a few places (Amsterdam, Paris and New York among them) have taken much more active approaches to enforcement than others, so quantity fluctuations in those places could result from that. There is no explanation of methodology in most articles and reports, but the work done and published by researchers such as Tom Slee and Murray Cox is a welcome exception, as are earlier stories and studies published by Skift and the San Francisco Chronicle. Also notable is the 2014 report by the Attorney General for the State of New York, which is based on subpoenaed information.

Another caveat is that most of these figures are just for total number of listings. It’s more interesting to know the distribution of those listings by neighbourhood, type of listing, nightly rate, etc. Some of that information can be found for a limited number of cities in the work I’ve noted above.

This also seems like a good place to note some common problems with media accounts of Airbnb’s size and influence, which frequently quote Airbnb’s own so-called “economic impact studies” for various cities. Those studies in turn frequently commit the journalistic and scientific sin of reporting percentages without including the whole number on which they’re based. This article on a 156% increase in Airbnb guests in Cardiff, Wales is an example of that type of story. With only few possible exceptions, all I’ve seen Airbnb put out when it releases one of its “studies” is a news release or blog post containing a list of figures consisting mostly of percentages (e.g. 80% of New York hosts are or say X) and an undated infographic, such as this one. They don’t release definitions of terms (such as “visitors,” “economic impact,” or “local spending”), methodology or raw data that would allow others to check their math or evaluate for themselves. I’ve seen very little comment on this opacity in media reports, so I’m gathering that reporters are either not asking for or have not been successful in obtaining this info.

What’s the point?

All these qualifications and caveats aside, I think the larger and main point supported by the growth that these figures indicate is that there actually is something very new and different about what’s happening with Airbnb in cities around the world in the last five to seven years, including Vancouver. Given these numbers, especially where the STR listing growth has occurred in cities with shortages of affordable housing that pre-date Airbnb’s existence (San Francisco, New York and Vancouver, for example), I think it’s hard to make the case for a status quo approach to regulation and enforcement. I’ve provided examples of how some cities are changing their approach in these posts.

Unfortunately, the table is too long to show in its entirety here, but this is what the top of it looks like.

2015.05.30 Airbnb listings and hosts table

You can see the rest and download the table (as a spreadsheet) here.

*Apologies for the mix of footnotes and links in this post. Some of what’s above is adapted from a paper, thus the footnotes.

[1] Bloomberg.com, “VRBO Company Snapshot,” Bloomberg Business, n.d., http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=30174737.

[2]VRMA, “About VRMA,” VRMA, n.d., http://www.vrma.com/about.

[3]HomeAway, “HomeAway, Inc. Reports Fourth Quarter and Full Year 2014 Financial Results,” February 24, 2015, http://investors.homeaway.com/releasedetail.cfm?ReleaseID=898070.

[4]HomeAway, “Fact Facts,” HomeAway, n.d., http://www.homeaway.com/info/media-center/presskit.

[5]HomeAway, “HomeAway, Inc. Reports Fourth Quarter and Full Year 2014 Financial Results.”

[6]VRMA, “Vacation Rental Managers Association Celebrates Landmark Membership Growth,” VRMA, September 17, 2014, http://www.vrma.com/2014_9_17_membership.

[7]HomeAway, “Vacation Home Sales Spike Thirty Percent in 2013 According to New Research from HomeAway and National Association of Realtors,” HomeAway, April 2, 2014, http://www.homeaway.com/info/media-center/press-releases/2014/vacation-home-sales-spike-thirty-percent-in-2013-according-to-ne.

[8]Ryan Tumilty, “Home-Sharing Website Airbnb Now in Edmonton,” Metro, January 11, 2015, http://metronews.ca/news/edmonton/1257875/home-sharing-website-airbnb-now-in-edmonton/. Colin Fast, “Winnipeggers Embrace Airbnb as World Cup Rounds the Corner,” Metro, January 5, 2015, http://metronews.ca/news/winnipeg/1247047/winnipeggers-embracing-airbnb-as-world-cup-comes-around-the-corner/. Nicholas Deshais, “Spokane City Council Takes Step to Preserve Short-Term Rental Businesses – The Spokesman-Review,” Spokesman.com, December 2, 2014, http://www.spokesman.com/stories/2014/dec/02/spokane-city-council-takes-step-to-preserve-short/.Josh Sidorowicz, “Airbnb Licensing to Pick up Speed in GR, City Manager Promises Enforcement,” Fox17, November 13, 2014, http://fox17online.com/2014/11/13/airbnb-licensing-to-pick-up-speed-in-gr-city-manager-promises-enforcement/.

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