To Airbnb or not to Airbnb? This is a question that many travellers are asking at a time of critical acclaim towards the digital platform. Here, we try to put the advantages and disadvantages of using Airbnb in a broader context. Please keep an open mind as there are many myths about Airbnb and whether it’s ethical to use Airbnb or not.
Money from tourists will get among more people
This is the main argument of the whole platform. Why should only hotels benefit from tourists’ money? Why couldn’t they be reached by the wider public? The basic idea is beautiful. You have a large apartment with a free room, and so you rent it to people who come to the city for business meetings, conferences, but mainly for tourists who want to know the beauty of your city. This will help with the rent, which tends to be high in big cities, and saves visitors accommodation that is more expensive in hotels. But this is not how it has worked for a long time.
To better understand this, we are now defining two types of offers that we find on Airbnb. They are taken from insideAirbnb.com and are:
Offering shared housing or room
Shared housing refers to an advertisement that corresponds to the original idea of the portal: that is, the host rents a free room in his / her apartment. A tourist who uses such an offer usually stays in the apartment together with its owner during his stay. You can also stay for free in shared room thanks to Couchsurfing.
Commercial offer
By commercial offer, we mean advertisers who offer the whole flat or flats for short-term rental. Hosts buy real estate as an investment and do not actually live there. Sometimes, they own more such apartments or entire houses.
With digital platforms, you only need an apartment to enter the tourist accommodation market. Such an initial investment is, of course, much lower than if you wanted to open a hotel or hostel. There, you need to hire a wide variety of employees – receptionist, chef, maid, accountant, etc. The hotel certainly requires construction work, you must pay for employees, even when it is not the season. You don’t have to do this with Airbnb. What does it really do? The platform makes it easier to enter the tourism market, so it reaches more investors.
The result is a huge increase in commercial offers on the portal compared to shared housing.
It is said that Airbnb is pushing local people out of towns
The reasoning in this respect is quite simple. Since a commercial landlord does not have to pay many employees through Airbnb, the price of accommodation can be significantly lower than is possible in hotels. This makes travel more accessible to a wide range of other people whose incomes are not as high. Demand is rising, so it motivates more people to enter the tourist market, which is much easier thanks to digital platforms based on the idea of shared housing. Many people want to buy real estate in the city centre, not for permanent rentals but for short-term rentals that pay off more than a regular tenant.
According to available information from 2016, 81% of Airbnb’s offers in the USA are of a commercial nature, i.e., the entire apartment without the presence of a host. The estimated profit is around $4 billion. Similar numbers can be found in other cities. 75% of hosts in Venice offered commercial housing in 2019. Of course, it is quite logical that accommodation in the historic centre is more expensive and more requested than accommodation somewhere in the suburbs. Up to 35% of the total revenue from renting across the platform falls into the pocket of the first 5% of hosts. This is possible not only because of the interest in more lucrative places in the city centre but also because Airbnb allows people to offer more than one apartment. An individual can advertise ten of them. The result is another striking number: 23% of Venice hosts own 63% of the accommodation offered. The figures from New Jersey are very similar: 75% of the accommodation is purely commercial and cuts up to 91% of the total profit.
The argument is simple: Some locals do not have a good place to live because homeowners in the city centres do not want long-term tenants: it pays more for them to rent an apartment on a short-term basis via digital platforms. In the cities, the indigenous population is being pushed out due to rising property prices, which are the responsibility of Airbnb.
According to a study by the Economic Institute in Barcelona, rent in the city centre grew by 7% between 2012 and 2016. That seems to be quite enough. But another such research comparing increasing rental rates in the city and listing local properties to Airbnb claims that a 1% increase in offers via Airbnb can lead to an increase of 0.018% in rental prices and an increase of 0.025% in property prices These figures do not seem to be so high, certainly not as much as in the case of Barcelona. In Venice, over the last year, 13% of new accommodation offers have been added, corresponding to a rise in the real estate price of only about 0.3% per year. These studies lack the argument of why price increases should be solely accounted for by Airbnb and not by other socio-economic factors.
Tourist open-air museums
But there are other things that cause cheap travel, where Airbnb is an integral part. More and more European cities are saying that their historic centres are completely losing their genius loci and are becoming open-air tourist museums.
There are several reasons for this. On the one hand, the locals are tired of having an apartment as neighbours on Airbnb. When someone else lives next to you every day, the classic neighbourhood community fades away. In addition, tourists come home late, often making noise and clutter (many people use flats via Airbnb to organize bachelorette parties).
It is hard to live for locals in the sense that there are fewer opportunities to buy classic things like groceries or drugstores, as, on the contrary, souvenir shops, bicycle rentals, and other tourism-related businesses are on the increase. The high demand of tourists in restaurants also raises meals’ prices. So it’s reaching levels that the locals are not willing to pay. The streets are cluttered with useless things to entertain visitors. The gondolas, which are now so typical of Venice, were not the only means of transport in the past centuries, but they looked very different. There were small cabins, where the passengers could keep water from splashing. Cabins have been removed from today’s gondolas to give tourists a better view of the city. While previously used exclusively for the transport of locals with a small price tag, today’s cost of a one-hour ride is 80-100 Euro, and a permanent inhabitant of Venice would probably not get into them.
Cheap travel has brought popular destinations to the edge of their capacity, and instead of welcoming tourists, the locals are thinking about how to regulate their numbers. The frustration of the locals is best illustrated by the exclamation in Barcelona at the height of the immigration crisis in 2018: “Tourist go home, refugees welcome!”
Every year there is a growth in the travel market – in 2018, it was by 3.8%. People travel more and spend more money all year round. Although Airbnb undoubtedly contributes to this trend, it is certainly not the only responsible factor. It is not the only digital platform for travel; we should not forget the long-time giant Booking.com, which also introduces residential accommodation. Numbers speak quite clearly. The total value of booked accommodation through Booking reached $ 92.7 billion, while Airbnb reported $ 2.6 billion.
So what does our conscience say?
The argument that tourists’ money reaches more people thanks to Airbnb is frankly naive. Money is still concentrated in the hands of big players with real estate in tourist areas, as research shows InsideAribnb.com. If you do not want to support this, you can choose via Airbnb accommodation outside the city centre in locations that are proven to offer sleeping in a free room and not a free apartment. It will also help if you prefer advertisers with a single property offer. If someone offers more, it’s probably not shared housing.
Follow other users’ ratings and comments, not just price. If you can’t find anything nice with the local family, use a different digital platform offering accommodation. Keep in mind that the hotel employs local people who make money from your visit.
Furthermore, you should always make sure that the accommodation in the area is appropriate and safe. There are known cases where Israelis offered accommodation in settlements in the disputed territories of occupied Palestine. These settlements are considered illegal in a large part of the world. If you are unsure, choose official travel agencies or hotels.
On the other hand, if someone tries to convince you that because of Airbnb, locals are moving from the city centre because of rising property prices, you can tell him that this claim is at best based on a lot of dubious arguments. Certainly, it is not universally valid in all cities. Airbnb contributes in part to the creation of open-air tourist museums, but this is also due to other portals, such as TripAdvisor, Booking or Expedia.com. It is “overstated” due to low traffic regulations and rising living standards worldwide. Big city centres really lose their original genius loci, and if you don’t want to contribute to this trend, just go somewhere else. Instead of Egypt, head to Iran or Uzbekistan. Travel to Georgia or Kyrgyzstan instead of the Alps. Instead of Thailand, visit Cambodia. On our blog, you can read how to do it, just choose a destination.
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