Selling sharing: Airbnb facts, figures and flim-flam

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Airbnb and the battle for your block: Last week Jimmy Thomson looked at how some politicians have been seduced by the myth that online short-stay letting agencies bring nothing but good to the community.  This week he examines the biggest player of them all, Airbnb, and how the spin from the $50 billion corporation is often a mixture of selective fact and dubious statistics backed by aggressive political campaigns and law suits.

People love Airbnb.  Even those who would fight tooth and nail to keep it out of their own apartment blocks secretly rhapsodise the fabulous pad they rented for two weeks in the centre of Paris. Nimby? You bet!

I have used it myself and will probably do so again because it can be all the things the shiny website promises and still be perfectly legal and acceptable, even if Murray Cox of InsideAirbnb.com says one tourist’s holiday in a New York loft may be a local’s homelessness or at best, move to a less attractive suburb or a more expensive rental.

However, as NSW and Victoria MPs consider laws that would, say pessimists, hand over the keys to our high-rise kingdoms to holiday letting hosts, the rest of the world seems to be pressing the brake, rather than the accelerator.


Previously:
Part 1 – Holiday lets … opportunity or threat?
Part 2 – Free money and castles in the air
Part 3 – Politics and the myth of the vomiting bridesmaid


Not that you would get that impression from Airbnb’s marketing and publicity people here in Australia, where the message is that they are loved by 80 percent of ordinary people in Sydney, they are helping ordinary people make ends meet, and they aren’t forcing ordinary people to pay higher rents or move out of popular areas.

Repetition of the phrase “ordinary people” is intentional.  It’s the cornerstone of Airbnb’s pitch all over the world, in myriad languages.

And it’s measuring the global online holiday letting mega-corporation’s message against reality that’s the challenge with Airbnb. Take those 80 percent of people they say love them.  I wouldn’t dispute that – but how many of them live in the parts of Sydney where Airbnb is most active? And if it is universally true, why are they opposed to 75 per cent of owners being able to pass by-laws that would exclude them from their buildings.  That 80 percent of airbnb lovers would win the day, every time.

Ah, maybe they love the idea of using Airbnb when they travel rather than having an Airbnb holiday pad right next door.  In any case we shall probably never know if the 80 percent is a lie, damned lie or just a statistic, as Mark Twain said.

So let’s start with what we do know.  Sydney is the fifth most visited Airbnb destination in the world – after, London, Paris, New York and Los Angeles – and the eighth in terms of listings. Those are figures provided by Airbnb itself and there’s no reason to doubt them. We also know that it has doubled in size in Sydney every year for the past few years.

According to analysis by independent monitoring website InsideAirbnb.com, currently there are more than 23,000 Airbnb listings in greater Sydney, nearly 62 per cent of which are whole houses or apartments.  The vast majority of those are in the Inner West, Eastern Suburbs, lower North Shore and Northern Beaches.

In Melbourne there are more than 12,000 listings, according to InsideAirbnb, most in a triangle bounded by Moreland, Port Philip and Elwood with the greatest concentration, naturally, in the CBD.  More than 56 per cent of the listings are for entire houses or flats.

Now, Airbnb will tell you that the majority of whole-home listings are people who just want to let their house or flat while they go on holiday for a few weeks. This may be true – and InsideAirbnb.com  says it’s not – but, in the big picture of the effect of Airbnb on apartment blocks, probably irrelevant.

In fact, the InsideAirbnb analysis claims that 14 per cent of listings in Sydney City have letting patterns that wouldn’t also allow for residential lets.  That’s nearly 700 units and, to a much lesser extent, houses taken out of the residential market in central Sydney alone, the equivalent of four or five very large apartment blocks.

In Melbourne 23 per cent, or 1585 homes, could not be used for permanent residential rental due to the letting pattern, says the website.  These figures are robustly disputed by Airbnb which says they are inaccurate and misleading.

However, their own figures are known to have been massaged beyond recognition when it suited them.  A report in the New York Times last year claimed more than 1000 listings in the city disappeared just before the company claimed they had very few multiple listings.

That said, close watchers of Airbnb have noticed a change in tone from the multi-billion-dollar corporation.  Gone is the brash, ‘we are ordinary people shaking up the world and you can’t stop us’, attitude.

Now they are offering compromise and conciliation. Their website urges hosts to check whether they are allowed to rent their rooms or apartments under the rules of their strata scheme or rental agreement.  On the other hand, it also says they take no responsibility for the behaviour of their hosts.

Meanwhile they have even issued a set of suggested guidelines for governments and councils to adopt so that they can operate with their approval.  Ignoring the underlying corporate hubris of a holiday letting agency telling politicians how it should be regulated, this signals not just a change in their attitudes but a shift in their fortunes across the globe.

Last month they dropped legal action they’d launched against the City and State of New York, where they had been challenging existing laws against residential apartments being used for holiday lets.

In San Francisco, where Airbnb was born, they lost a court case in which the company had declined to take responsibility for the content of its listings.  Now the city’s legislators are moving to force Airbnb hosts to register their properties with the city and to impose a limit of 60 nights per year.

Berlin has completely banned whole home lets on Airbnb, Barcelona has fined them for breaching tourism laws, Amsterdam has put a limit of 60 nights per year that whole homes can be listed and Vienna has demand Airbnb hosts pay tourist tax.

In London, just last month, Airbnb agreed to drop listings that went over 90 nights per year if the properties didn’t have planning permission, after studies showed landlords were taking properties out of the residential market because they could make more money with holiday lets.

These are two very significant departures. Airbnb is suddenly prepared to police its hosts to make sure they don’t break planning laws – something they resolutely refuse to do elsewhere – and they admit they have an effect on the availability of residential lets, again something they strongly deny occurs here.

Make no mistake, these changes are unlikely to have been prompted by a sudden discovery of a sense of social responsibility.  They occur in cities where local politicians have decided that online holiday letting offers an opportunity for the unscrupulous to prosper while “ordinary people” suffer.

Closer to home, as stated earlier, the upper house of the Victorian parliament has rejected legislation that would have kicked open the doors of Melbourne’s apartment blocks to unlimited short-stay letting.

And even little Queenstown in the South Island of New Zealand is getting in on the act with almost 800 home owners and tenants being told their rates are going to be increased by 25 per cent because they are running holiday lets, meaning they are a business rather than a dwelling.

So it’s fair to say that globally, the Airbnb aura is beginning to wear thin.  The universal spin is becoming a tangled message, to the point that it can be contradictory, depending which country and which city they are in.

They may present globally as an online international hug-fest but they are not going to sit idly by and let politicians erode their massive profit base or growth potential. In NSW and Victoria, they have reportedly hired former politicians’ staffers to lobby current MPs to make sure the impending laws in both states don’t cramp their style too much.

This isn’t just standard practice for large multinational corporations, it’s par for the course for Airbnb and is not without a slightly sinister side.

An $8 million advertising campaign in California last year stymied new laws to limit short-stay letting. And according to a New York Post story (among others) Airbnb also spent $600,000 (US$457,000) campaigning against New York State Senator Sue Serino who had supported laws aimed at preventing them from listing family homes.

Might they target MPs in Victoria and NSW who publicly spoke against them?  It would be politically risky but it would be neither illegal nor completely out of step with what they have done elsewhere.

Right now, their response to two NSW MPs who criticised them in Parliament has been to point out these MPs didn’t make a submission to the public inquiry last year.  This writer has had to point out that MPs don’t generally make submissions in public inquiries – pubic inquiries are for the public.  MPs make their submissions on the floor of Parliament where their observations go straight into Hansard and on to the permanent record.

Airbnb still goes to the warm and fuzzy in its public image. The Serino attacks were presented as defending the environment over a water pollution scandal.  In Victoria they struck a deal with the government to help find homes for victims of bush fires. In Sydney, they have gone into partnership with iconic bodies such as Qantas and Sydney Opera House.

Socially aware and responsible or cynically manipulative?  You be the judge.

This is all confusing for those of us who once loved Airbnb.  The idea of renting a spare room in your home to a like-minded traveller was romantic and pragmatic at the same time.  You’d meet new friends and make a few bucks.  What was not to love about that?

But as Airbnb grew exponentially, and commercial property investors began letting multiple properties to short-stay guests whom they never even saw, Airbnb didn’t defend that original concept; instead they employed it as a moral smokescreen.

If there was any doubt that Airbnb has moved a long way from its original appeal of ordinary people from all over the world staying with ordinary people here, a quick Google search reveals the number of cleaning and key service companies set up to ensure hosts never have to set eyes on their guests.

As a journalist, over the past year or so I have gone from being a keen user and supporter of the Airbnb concept to deeply suspicious of their methods and message.

For a start, a direct question is rarely met with a straight answer.  I am still waiting for responses to the following questions that I have now asked twice, in writing:

  • Do you concede that Airbnb has an effect on residential rents in the areas where it is most active?
  • Is it true that Airbnb in Sydney gets greater income from whole-home lets than it does from rented rooms in share situations?
  • Are you aware of the Sydney host who has more than 60 properties on their list?
  • Do you accept that more than 30 percent of Airbnb hosts in Sydney list more than one property?
  • Would Airbnb be willing to share data and regulate the number of nights properties can be let if the regulations include limits, as in London and Amsterdam?

Perhaps it was because I said I wanted direct answers and not motherhood statements that I’ve heard nothing.

Normally at this point in a story, I would call Airbnb for a comment and, regardless of the issue, they would either give me a stock answer or say nothing at all. So let me save us both a little time out of our busy days by presenting this “best of” Airbnb responses.

The InsideAirbnb.com and the Sydney University report’s figures are inaccurate and misleading.

There is no evidence that high Airbnb activity has any effect on rents, house prices or rental availability in Sydney or Melbourne.

Airbnb encourages its hosts to abide by their local planning laws and the by-laws of their buildings.

The majority of Airbnb hosts are ordinary people letting a room in their homes while making a little money to help make ends meet, or even pay for their own family holidays, while sharing their local knowledge with visitors from overseas.

And if you believe any of that means there is no problem with increased holiday letting in apartment blocks, you probably need a vacation.

Next: Winners and losers – the main Airbnb options

Jimmy Thomson writes the Flat Chat column every week in the Sydney Morning Herald.

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