Airbnb to score off of Twin Cities' limited room supply ahead of Super Bowl

Super Bowl LII is coming to the Twin Cities, and Airbnb is making a play to score ahead of the big game. 

In a call yesterday, Chris LeHane, head of global policy at Airbnb, said Minneapolis/St. Paul has a stock of roughly 42,000 hotel rooms, about half the number available in Houston, the site of last year’s game, and not enough to accommodate an estimated 125,000 visitors traveling to the area for this year's game. Roughly 19,000 of the two cities’ guestrooms reportedly were booked by the NFL alone, leading to high rates far from the field. LeHane said Airbnb saw the writing on the wall, and last year the company began a push to double its existing number of hosts from 1,000 to 2,000 to scoop up guests unable to find rooms or afford available ones.

The company’s efforts paid off. LeHane now estimates that by kickoff on Sunday, roughly 5,500 active Airbnb hosts will have opened their doors within the Twin Cities alone, not counting suburban hosts located outside the city limits.

“Long before the Patriots and Eagles were on their way to the game, hotels were raising rates more than five to 10 times the normal amount, and the only rooms available are in the suburbs,” LeHane said.

When it came time to convince Twin Cities residents to open up their homes for the event, LeHane said it wasn’t a hard sell. The average Airbnb host in the area stands to earn $1,000 over a three-day period, while typically hosts earn roughly $5,100 per year renting their room out for 41 nights. 

Right now, most Airbnb listings near U.S. Bank Stadium are booked, but many within a bus ride of the game are on sale starting at $153 a night. Comparatively, the Holiday Inn in Bloomington, Minn., is offering room rates as high as $999 a night, while the Best Western Plus in Brooklyn Center (Minn.) is charging $910 a night. Granted, some Airbnb listings are reaching as high as $7,378 per night, so a discerning eye is still needed when looking to make it to the game this Sunday.

Fluctuating room rates is a natural part of the hospitality business, as is responding to supply and demand. LeHane has another term for it, though: price gouging. 

“During a call with the Pebblebrook REIT… CEO [Jon Bortz] was asked last year if he was concerned about Airbnb since we were adding supply in U.S. cities, and how it intersected with the hotel model,” LeHane said. “He said his concern was that Airbnb was going to ‘impact hotels’ ability to gouge customers.’ We are trying to make this as accessible as possible, and for every penny that travelers save in their travels, that goes to local shops, restaurants and stores.”

What Bortz actually said during that 2015 earnings call differs slightly from what LeHane recalled: “If you look at business around marathons as an example, where we used to have really intense compression and an ability to price maybe what the customer would describe as sort of gouging rates, I’d say we’ve lost a lot of that ability at this point within the major markets where these events take place,” Bortz said.

Regardless of this, Airbnb’s presence in the Twin Cities is anticipated to grow as kickoff approaches. LeHane said 60 percent of guests booked their stay with the company within the past 10 days, and he expects to see more rooms come online even up until Saturday.

“Roughly 66 percent of our hosts here are first-time hosts… and when their neighbors hear they are making $1,000 in three days, their homes will probably go up, too,” he said.

The average price for an Airbnb at last year’s Super Bowl in Houston was $150 per night, but this year residents of the Twin Cities are charging an average of $286 per night—roughly 3.7 times the usual Airbnb booking. This still comes in far under the prices charged at many of the area’s hotels, though LeHane said it will result in a combined $3.7 million earned in supplemental income for Airbnb hosts. 

During the call, the topic of discrimination between Airbnb hosts and guests came up. It’s humorous to imagine an Airbnb host refusing to let, say, an Eagles fan stay the night in their home over sports rivalries, but worse things have happened, and the practice is difficult to police. However, LeHane said the company is taking discrimination very seriously ahead of the game, no matter where it is coming from. Airbnb also is forwarding safety and operational tips to all of its hosts ahead of the event as a means to offer support, particularly during a period where spirits will be high.

“We don’t condone any discrimination, even if they are members of the New England diaspora settling into the land of 10,000 lakes,” LeHane, a self-professed Patriots fan, said during the call. “We have policies forcing people forcing people to accept anyone from anywhere.”

When asked how much growth Airbnb has seen year-over-year from hosts during the Super Bowl, LeHane declined to give any concrete numbers but assured those listening that this is the company’s bread and butter.

“This is a big game, and we are a platform built off of major events,” he said.