Airbnb had its best quarter ever in Q3 2018, even as cities across the US have started clamping down on the short-term rental market. Revenue during the third quarter breezed past the $1bn level as guest reservations boomed internationally from Birmingham to Beijing, the San Francisco-based company said on 16 November.
Airbnb expects a record 1m guests to stay at Airbnb listings across the US during the Thanksgiving holiday alone. However, the phenomenal growth the company has experienced in recent years is of great concern to the hotel industry and on 20 and 21 November the first international meeting of hotel representatives and city officials (aptly called ReformBnB) was held in New York to discuss ways to regulate Airbnb and other short-term accommodation platforms.
The group of hotel industry representatives from the US, Canada, France, Spain, the UK, Ireland, Italy, Denmark, Japan, Colombia, Ecuador, Argentina, and Australia attended the conference, which included presentations by several city officials, hotel groups, and academics, discussing strategies for regulating Airbnb and other short-term rental platforms, which have become home to a growing number of commercial agents who manage large volumes of listings.
“There's a commonality of negative outcomes around the world”, said Vijay Dandapani, the president and CEO of the Hotel Association of New York City. He told local press that, “short-term rental platforms treat these as isolated events, particular to that city, but that is not the case. What happens in Perth is almost identical to what we face here in New York City.”
Dandapani, who organised the conference, said because the challenges are similar around the world - a negative impact to the hotel industry, to the housing supply, and the local community - hotels, cities, and affordable housing advocates need to develop a collective response. “We’re a fragmented industry versus the platforms. There are maybe just three to four of them and they have a global unified strategy,” he said.
While Airbnb is the clear market leader, HomeAway (which is owned by Expedia) reported $410m in quarterly revenue, and Booking.com said as of the end of September, it had more than 5.7m listings in homes, apartments, and other “alternative accommodations”, up 21% compared to a year earlier.
“The whole economy of the planet has a very few number of platforms, which become bigger and bigger every day,” said Sergi Mari, manager of tourism, commerce, and markets for the Barcelona City Council. Mari said that regulation is down to local authorities and they are meeting to exchange experiences and to better understand what is happening.
New York City Council speaker Corey Johnson told local press: “Twenty-first-century problems require complex solutions, and global issues require global dialogue. Lots of cities around the world are trying to figure out how to deal with short-term rentals, and I think it’s important to have an international exchange of ideas as we try to deal with this issue thoughtfully.”
In response to the meeting, Airbnb planned a protest outside of the conference, using Airbnb hosts. It also posted an online video criticising the efforts of “Big Hotels” to crackdown on short-term rentals, with hosts holding signs that read “The system is rigged.”
The uncertainty regarding what further regulations might be introduced in an effort to hurt Airbnb financially has delayed plans to an IPO (Initial Public Offering) as stock investors are weary of how this phenomenon may play-out.
In the US alone for example, New York, Boston, San Francisco and Washington, DC, have all rolled out restrictions on short-term rentals and increased their enforcement. London already limits hosts to 90 days of home sharing per year and Berlin introduced strict rules and large fines regarding home sharing back in 2016, although it has since softened those restrictions.
In a statement, Josh Meltzer, who works in public policy for Airbnb, said the company is ready for a truce. “After years of fighting, the reality is that we both remain in this same position, with the big hotels on one side and our host community on the other. For our part, we are more than willing to come to the table.”
However, French President Emmanuel Macron is poised to sign a new act into law on 23 November, which would impose penalties up to €5,000 for hosts and €12,500 for companies who operate home rentals without a government-issued license. For rentals that operate illegally for more than 120 days, fines would be €10,000 for hosts and €50,000 for companies. Paris is Airbnb’s biggest market with about 60,000 listings.
Meanwhile, New York City, which is Airbnb's second-biggest market with about 50,000 listings, plans to introduce a new law in February 2019 that will requiring all short-term rental platforms to hand over information about every short-term rental in the city.