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Let us try to look at the matter in another way. Take a city/place. Calculate how many people visited it before AirBNB. Let's say 1,000,000 stays per year, w
by jaclaz 9y ago
Let us try to look at the matter in another way.
Take a city/place.
Calculate how many people visited it before AirBNB.
Let's say 1,000,000 stays per year, with an average expense of US$ 180 each, including night at US$ 120 at the hotel and some drinks/meals/souvenirs/whatever another 60 US$ .
The city/place (globally) has had an "income" of 180,000,000.
How many more people visited the city place after AirBNB became popular?
Let's say 1,200,000, i.e. a 20% increase, and let's say that not only these 200,000 more stays are at AirBNB's (i.e. people that wouldn't have come if AirBNB's were not available), but that also a part of the same people that would have take a hotel room passed to AirBNB's, let's say 100,000.
Now, the hotels will have lowered their prices because of the competition, and - more generally - an AirBNB user (with of course the usual exceptions) is probably less prone to spend money.
So we have 900,000 nights at a "discounted" price of (say) 110 US$ i.e. 99,000,000 plus 900,000 at the same US$ 60 54,000,000 and some 300,000 AirBNB's at (say) 60 US$ , i.e. 18,000,000, plus 300,000 at a lower US$ 40, that is 12,000,000.
From the 18,000,000 you have to subtract the commission AirBNB takes, which should be on average (both guest and host commission) around 15% that "goes elsewhere", i.e. 2,700,000.
The city/place received (globally) 99+54+18+12-2.7=180,3 millions, i.e. roughly the same as before, while having (still globally), the increases of traffic, garbage, noise, etc. due to the 200,000 more visits.
In the meantime, hotels and other trades had a roughly 10% decrease of income, apartments/flats were not available to local population at "fair" long term rent prices, the increased income from the rentals of the AirBNB's and connected services very likely went in a lower tax bracket.
I would say that it is not a particularly good deal for the city and for the locals.
- komaromy 9y agoIt seems like you should take into account the cut that a hotel chain extracts from each franchise to make a fair comparison. I don't have a good sense of how much that is.
- jaclaz 9y agoYes, I was hypothizing local owned (not chain) hotels, but you are right, anyway nowadays there will be the 15 % or higher fee that booking.com or similar charge, at least for the bookings that went through them. If you reduce the "before" of (let's say that the chain/franchise fee is lower and that not all bookings (thankfully) go through booking.com or similar, by 10% of 120,000,000 in the "before" i.e. 12,000,000 and reduce by the same amount 10% of 99,000,000, 9,900,000, you get to a "before" of 168,000,000 and an "after" of 170,400,000, so you have a slight increase in "income" : 2,400,000/168,000,000=1,4% But anyway the "unit prices" were arbitrary and just for the sake of the reasoning.
- wdb 9y agoHalf the time when I called the hotel chain for a room reservation they offered a lower price then Booking.com. Think Hilton or IHG
- jaclaz 9y ago>Half the time when I called the hotel chain for a room reservation they offered a lower price then Booking.com. Think Hilton or IHG Yes, this is possible in some (not all) countries, there is a clause in booking.com and similar web aggregators/portlas/whatever you call them contract about the "parity rate" where you cannot sell the same room at a price lower than the one advertised on booking.com, expedia, etc.. Little by little Law in several countries has been modified to make the clause a null one, Germany, Austria, France, in a hopefully near future Italy: http://hotelanalyst.co.uk/2017/05/16/hotels-accused-of-freeriding-otas/ http://hotelanalyst.co.uk/2017/05/16/hotels-accused-of-freer... But for the sake of reasoning it changes little as - as said - both unit prices and hypotherical increase in presence were just "invented" and the saving is of course for the visitor so the city/place (globally) won't see those anyway.
- VMG 9y ago> I would say that it is not a particularly good deal for the city and for the locals. What about the visitors?
- jaclaz 9y ago>What about the visitors? That is in the eye of the beholder (i.e. the visitor). I was trying to give some possible reasons why a city (as many are doing lately) would want to limit - one way or the other - the amount of AirBNB's rentals through local Laws. The (particularly strict) Berlin example: https://www.citylab.com/equity/2016/12/berlin-has-the-worlds-toughest-anti-airbnb-laws-are-they-working/509024/ https://www.citylab.com/equity/2016/12/berlin-has-the-worlds...
- empath75 9y agoWhat about them? They don't live there, they don't pay taxes there, they don't vote there.
- VMG 9y agoWhy does them being from a different place allow you to discount the value they derive?