Study delves into Airbnb's impact on Phoenix

Phoenix

The effects of Airbnb on the hotel industry and how short-term rentals should be regulated have been discussed at length, but new research is helping quantify the issue. The American Hotel & Lodging Association released a survey today that provides a detailed analysis of the commercial activity taking place in Phoenix on Airbnb.

The study, which was conducted by the Pennsylvania State University School of Hospitality Management, is a follow-up to national research from the AH&LA that was released in January and is the first of several taking a look at specific cities.

Findings of the study include:

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  • The majority of revenue derived by Airbnb in the Phoenix region comes from hosts renting units 30 days or more: More than 85 percent of operators listed properties for rent more than 30 days per year, accounting for more than $41 million.
  • 14 percent of operators listed properties for rent more than 180 days per year, accounting for more than $9 million, or more than 21 percent of Airbnb’s revenue in the Phoenix metropolitan area.
  • Multiunit operators accounted for 14 percent of hosts in the Phoenix area, but they drove 40 percent of Airbnb’s regional revenue — more than $17 million from September 2014 through September 2015.

The problem isn’t competition, according to those who are calling for more regulation. The major sticking points are the health and safety of guests, the damage done to communities and neighborhoods, and the payment of taxes.

“We welcome Airbnb and the competition it brings to the Arizona marketplace, however there is a distinct difference between those truly operating in the spirit of the shared economy, and those operating as full-time corporate landlords and hoteliers,” said Kim Sabow, president and CEO of the Arizona Lodging and Tourism Association. “We must protect consumer safety, the character and security of our neighborhoods, as well as ensure fair and equitable tax responsibilities important to Arizona’s economic future.”

The AH&LA and others believe that when homeowners rent for such a large number of nights and rent multiple properties, they are in fact operating as commercial enterprises.

“Illicit and often illegal hotels operated in residential properties are disruptive to communities and pose serious safety concerns for guests, for communities, and for neighborhoods,” said Katherine Lugar, AH&LA president and CEO. “We’ve seen time and time again that Airbnb is unwilling to be transparent with their data, and now we know why: A growing portion of their revenue comes from commercial landlords using the platform to run businesses without having to abide by the rules of the road that guide all other commercial lodging operations.”

The state’s proposed SB 1350 addresses the taxation issue, but not the health, safety and other regulatory issues, according to Sabow and Marion Hook, owner of the Adobe Rose Inn Bed & Breakfast, and head of the Tucson mayor’s task force on short-term rentals.

“This is not about stopping short term rentals or putting them out of business,” Hook said. “I’m all for competition or I wouldn’t be a small business owner. The key is making sure that everyone running a hotel is playing on a level playing field.”

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, which was released in January, showed that nearly 30 percent of Airbnb's revenue in 12 of the largest metropolitan areas in the U.S. came from "full-time operators" that offered rentals 360 days a year. Each of these operators averaged $140,000 in revenue during the period studied, accounting for $378 million in revenue for Airbnb. The AH&LA alleges these units that run all year long are acting as "illegal" hotels.

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