The economic benefits of Airbnb are hotly debated. Some argue that Airbnb has hurt hotels and the hospitality industry. Others say that hotel taxes are higher than those on rentals; shifting to Airbnb will only amount to a tax break for visitors.
Still, others claim that short-term rentals could hurt local businesses by drawing away tourists and other potential customers who would otherwise spend money on dining out, shopping locally, or renting cars while they’re in town. How much a city benefits financially depends on whether visitors would otherwise stay in hotels or decide not to travel and what they spend their money on there.
Also, whether they use public transportation or drive, amongst other details, there is no clear answer to how much overall revenue will increase if Airbnb becomes more prevalent in urban areas like New York City or San Francisco. In these cities, people have been forced out of their homes due to rising rents, and gentrification has resulted from high tourism rates.
Airbnb is a Way of Renting Part or All of Your Home to Travelers
Airbnb is a company that connects people who need somewhere to stay with people who have somewhere for them to stay. Airbnb hosts rent out their homes, apartments, or rooms to temporary guests for as little as one night at a time—or for an entire month.
Moreover, Airbnb is also an option if you’d like to earn some extra money by hosting travelers in your spare room, apartment, or home. Getting help from online support can help you manage your success.
Airbnbs: What Defines a Short-Term Rental?
A short-term rental is anything less than 30 days, with most stays being one week or less. The term can differ depending on location. In some places, a short-term lease can be three months, and in others, up to six months.
A Brief History of Airbnb
The company was founded in 2008 by two roommates struggling to pay rent. Initially, the two offered three air mattresses on their living room floor. By some estimates, Airbnb now has over 2 million listings worldwide.
Impact of Airbnbs
In some places, such as New York City and San Francisco, Airbnb has been blamed for rising housing costs and a worsening housing affordability crisis. These cities have seen the home-sharing service as one reason it is difficult for low-income residents to find affordable housing options.
However, other cities worldwide have seen Airbnb as a net benefit. In fact, in 2018 alone, it was estimated that 19 million people used Airbnb to travel—and that’s just one company!
Some argue that Airbnb hurts hotels and the hospitality industry. Others say that hotel taxes are higher than those on rentals, so shifting to Airbnb will only amount to a tax break for visitors. Yet others believe the company’s existence does not significantly affect either one.
The truth is likely somewhere in the middle: Some hotels will lose business to Airbnb, but many more will profit from its existence. As with most things, your experience may vary depending on where you live, how much time you spend traveling on vacation, what kind of traveler you are (independent vs. organized), and whether or not you’re willing to pay for a hotel room at an affordable price. Cheaper hotel rooms can be sourced through a service like Expedia or Orbitz.
To add another layer of complexity into this discussion (which we’ve tried our best here not to do), some argue that hotel taxes are higher than rentals; shifting toward Airbnb would only amount to tax breaks for travelers while hurting local economies everywhere else.
Can a City Benefit?
How much a city benefits financially depends on multiple factors. These can include whether visitors would otherwise stay in hotels or decide not to travel. Also, what do they spend their money on while there, whether they use public transportation, drive hired cars, etc? There is no clear answer to how much overall revenue will increase.
How Much Can I Make From Airbnb?
Our client’s most common question is, “How much do I make from Airbnbs?” The answer” depends on many factors, including:
- Type of property you own or rent
- The price point for your listing(s)
- Your ability to manage and maintain multiple listings
Conclusion: The Economic Costs & Benefits of Airbnbs
Airbnb is a popular way for people to earn extra money and for travelers to find short-term accommodation. However, many critics say that the service hurts the hotel industry by taking business away, which could lead to higher prices and fewer jobs in these communities.
Meanwhile, others argue that Airbnb supports local businesses by helping them generate more revenue through tourism spending—and that cities should encourage this growth rather than try to regulate it out of existence.
