STR: Airbnb has no 'material' impact on Manhattan's room demand

Brownstone apartments, which are popular Airbnb rental options in New York.
Brownstone apartments, which are popular Airbnb rental options in New York. Photo Credit: via/

Airbnb doesn't have any "material" impact on hotel-room demand in New York's borough of Manhattan, research firm STR said in a report released this week, contradicting what many analysts, hotel operators and housing advocates have said about peer-to-peer housing's effect on the lodging industry in the largest U.S. city.

While Airbnb's Manhattan units accounted for about 9% of the borough's approximately 92,000 lodging units (comprising hotel rooms and Airbnb units), Airbnb accounted for just 3.5% of its lodging revenue for the fiscal year ended Nov. 30. The reasons for that are that Airbnb units' occupancy rate is substantially lower than Manhattan's 87% hotel-room occupancy rate, and Airbnb's room rate is about $100 less than the average hotel-room rate in the borough.

Additionally, STR pointed out, 61% of Airbnb units compete against midscale and economy hotels; those categories account for just 13% of Manhattan's hotel-room units. And while most Airbnb units are rented out for at least a week, just 4% of Manhattan's hotel rooms are in extended-stay properties.

Many analysts, hotel operators and lodging-industry lobbyists have decried Airbnb as a largely illegal operation because, they allege, many Airbnb hosts violate New York's laws against short-term rentals.

Those critics have cited New York's recent lodging statistics as proof of Airbnb's detrimental impact on hotels in the Big Apple. Last year, New York's room rates fell 1.6% from a year earlier, making it the only U.S. market out of the largest 25 to have a price decline. Others have attributed that price drop to the 3.2% increase in New York's room supply.

Last week, CBRE Hotels (formerly PKF Hospitality) put out a report indicating that Airbnb hosts may be adding units at a faster rate than the U.S. hotel sector and that Airbnb accounted for 16% of New York's lodging units during last September alone. CBRE, which cited data from Airdna (a company that provides data to vacation rental entrepreneurs and investors) and STR, was tracking all five of New York's boroughs.

That report followed up a study released by the American Hotel & Lodging Association (AH&LA) alleging rampant illegal activity among Airbnb's most prolific hosts. The AH&LA estimated that almost 40% of Airbnb's revenue in the 12 largest U.S. metropolitan areas are generated by hosts with at least two units and that almost 30% of revenue is generated by so-called "full-time hosts" who book units at least 360 days per year.

Airbnb called the AH&LA report "deeply flawed" and "misleading."


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