Airbnb may have $400 million or so in lost bookings in London to look forward to in 2017, thanks to new regulatory enforcement of the 90-night limit for hosts. That figure draws on data from AllTheRooms, an accommodation search engine, and analysis by the Financial Times. That news follows separate data recently released by the FT that indicates around 1/3 of the savings Airbnb offers over traditional hotels stems from tax advantages deriving from its business model.
That advantage is particularly pronounced in London because of high property tax rates assessed on hospitality businesses (like hotels) but much lower tax rates (and various exemptions) for homeowners renting out rooms and small businesses.
Airbnb’s popularity, particularly in travel destinations like London, has led to concerns that the service is creating perverse incentives to eat up local rental stock for long term residents in favor of the more profitable short-term rental market.
In London, around half of the nights booked on Airbnb last year would be put at risk by the 90-day limit.
If its listings hold constant, Airbnb could see its bookings in 2017 drop by a third thanks to the new rules. What remains to be seen is if the regs will shift visitors to new listings on the Airbnb platform — or off of the platform entirely. Without the rules, AllTheRoom estimates that Airbnb would have seen its London bookings increase from $600 million to $1.24 billion in 2017. The new estimates are now calling for around $812 million in bookings next year.
Airbnb has disputed the findings of the research — and notes that it underestimates how many Airbnb customers will simply stay in different rooms.
“Availability in London is not an issue,” said an Airbnb spokesman. “We are confident that there is a large range of unique homes for guests to choose.”
Airbnb has not disclosed its estimates for how many listings would be affected by the change, but did say that the majority of hosts would be unaffected.
London is one of many regulatory compliance issues Airbnb is wrestling with. NYC has seen 7 percent of its listings taken down to comply with local regulations; Berlin has banned short-term rentals of entire homes; and Barcelona has hit the company with several fines.