Phase II of AH&LA study highlights increase in commercial operators using Airbnb to run illicit and illegal hotels.

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Phase II of AH&LA study highlights increase in commercial operators using Airbnb to run illicit and illegal hotels.

(Mar. 23, 2016) The American Hotel & Lodging Association (AH&LA) has released Phase II of a study conducted by the Pennsylvania State University School of Hospitality Management that provides a detailed analysis of the commercial activity taking place in Phoenix on Airbnb, one of the most trafficked short-term rental websites.

The study builds on the national survey released earlier this year that shows a troubling trend: a growing number of commercial operators are using Airbnb to run illicit and illegal hotels that compromise consumer safety and the security of neighborhoods.

Key findings:

  • The overwhelming majority of Airbnb’s Phoenix revenue comes from hosts renting units 30 days or more, indicating these are not occasional renters:
  • 85% of operators listed properties for rent more than 30 days per year, accounting for more than $41 million in revenue for Airbnb in Phoenix.
  • 14% of operators listed properties for rent more than half the year (180 days), accounting for more than $9 million in revenue for the company.
  • Multi-unit operators accounting for 14% of hosts in Phoenix, drove 40% of revenue in the metropolitan area – over $17 million last year.
  • The five Phoenix zip codes with the most properties listed on Airbnb generated almost $8 million last year for Airbnb. The zip code with the most hosts and units for rent was 85251, which includes the neighborhoods of Scottsdale, Las Viviendas, Desert Cove and Waterfront. The 235 Airbnb listings in these neighborhoods generated over $3 million last year alone.

“Phoenix, like many large metropolitan areas across the country, is seeing a significant growth in the number of Airbnb hosts that are renting out their units full-time, or operating multiple units as often illegal hotel businesses. The rise of these commercial hosts represents a large and growing revenue stream for short-term online rental platforms like Airbnb,” said Dr. John O’Neill, Professor and Director of the Center for Hospitality Real Estate Strategy at Pennsylvania State University, who directed the research.

Phoenix is the first of 12 cities profiled in a series of reports that comprise Phase II of an analysis into the commercial activity being transacted on Airbnb’s platform. Phase I of the analysis (“From Air Mattresses to Unregulated Business: An Analysis of the Other Side of Airbnb”) was released in January 2016. That report revealed a troubling trend: In the nation’s largest cities, multiple-unit operators and full-time operators generate a disproportionate share of the company’s revenue – and their numbers are growing. Phase I showed that, between September 2014 through September 2015, “multi-unit operators” accounted for 13.9% of Airbnb’s Phoenix hosts and drove 40.6% of the company’s revenue in the city – totaling over $17 million.

The full report is available for download on the AH&LA website at here.