Airbnb cannot beat revenue from long-term letting, company says

Officials before Oireachtas housing committee to address impact on housing market

In Dublin, 3,838 “entire home” listings were booked at some point in 2016. Photograph: John MacDougall/AFP/Getty Images

In Dublin, 3,838 “entire home” listings were booked at some point in 2016. Photograph: John MacDougall/AFP/Getty Images

 

A typical unit of housing in Dublin would need to be rented for well over 120 nights a year to beat the revenue of a long-term rental, Airbnb has said.

Officials from the company were speaking before the Oireachtas housing committee on the impact of short-term lettings on Ireland’s housing and rental market on Wednesday.

The company has been subject to criticism amid suggestions property owners are leaving the long-term rental market in order to focus on short-term lets through websites such as Airbnb, thus exacerbating the housing crisis.

Airbnb director of public policy for EMEA Patrick Robinson provided the committee with extensive data on the size and composition of the company’s users.

He said a “key consideration” for policymakers ought to be the point at which short-term rental becomes a more lucrative option for a property owner than finding a long-term tenant.

“A rough look at data from the Residential Tenancies Board, cross-matched with our own records of host earnings, suggests that a typical unit of housing in Dublin would need to be rented for well over 120 nights a year to outcompete a long-term rental – and in some parts of the city, closer to 200 nights,” he said.

“Only 550 entire home properties were booked via Airbnb for more than 160 nights – and these account for just one in every thousand housing units in Dublin.”

Primary home

He said the “vast majority” of properties listed on Airbnb are the host’s primary home. “There is no simple conclusion to be drawn about the availability or affordability of long-term housing in Dublin from the simple number of entire homes offered,” he said.

“They are offering their entire home to guests while they are themselves away. Thus, an entire home listing on Airbnb is not necessarily a property that would be available for long-term rental under other circumstances.”

On average, he said, a typical host in the city earned €5,000 and hosted for 51 nights last year.

In Dublin, 3,838 “entire home” listings were booked at some point in 2016. Some 85 per cent of these were rented for fewer than 161 nights. Only 16 entire home listings were booked for more than 320 nights.

Taking a snapshot of the Airbnb platform on June 1st, 2017, there were 1,432 hosts who had only one entire home listing. Just 36 had more than five.

Some 5,200 hosts in Dublin city had hosted at least once during 2016. Almost half of the listings were private rooms, and 88 per cent of Dublin hosts report that they shared their primary residence.

Hosts in Dublin welcomed 358,300 arrivals, and these users spent an estimated €196 million while in the city.

Mr Robinson said most Airbnb hosts in Dublin were “not running businesses as anyone would recognise the term”.

“They are not property investors,” he said. “They are ordinary people who want – for a variety of reasons – to use their space to host visitors and generate some extra income.

“Hosts have told us this income typically helps contribute to their mortgage, to passions and interests, and to support themselves and their families in small but very meaningful ways over and above their existing employment or business activity.

“This extra income can make a real difference. Some 53 per cent of our hosts in Dublin have told us they use Airbnb income to help make ends meet.”

Rural Ireland

In terms of rural Ireland, Mr Robinson said 6,000 hosts welcomed users from September 2015 to August 2016. Users spent an estimated €101 million during their stay.

“Reflecting the different economics of these areas, typical hosts welcomed guests less frequently, but still generated typical earnings of €2,700,” he said. “The split between private rooms and entire homes was about 50/50.

Mr Robinson also said there was a need for “clarity” for hosts in terms of regulation so they are not “exposed” to the possibility of enforcement action.