The long tail and Airbnb

Like many sharing economy platforms, Airbnb has the potential to divide opinion.  Airbnb are adamant that the vast majority of those letting on the site are regular people making a bit of extra cash, whilst critics are certain that most are businesses running quasi hotels.

Recent data from Columbia University suggests that both may in fact be true.  The seemingly contradictory data reveals that the bulk of the income on the site comes from hosts that rent their homes for more than 90 days a year, but most of the hosts on the site do so for considerably less than that.

“A majority of Airbnb listings are rarely used, but a small share of listings generates most of the revenue,” the researchers say. “Something similar happens on Amazon and Netflix—most books and movies are rarely sold, but the popular titles account for most of the sales.”

The long tail

The researchers analyzed listings from Manhattan to test how often each property was booked and the revenue that was generated from each property.  It emerged that the majority of listings (~2/3) were rented out for under 30 days per year, with most hosts earning under $10,000 per year.  This suggests that these aren’t commercial operators.

However, there were also around 35% of properties that were rented out for over 90 days per year.  These sites would capture around 80% of all revenue on the site from the Manhattan region.

Previously Airbnb have cracked down on hosts operating multiple properties in New York City, and the ‘long-tail’ findings are consistent with previous studies of the makeup of the Airbnb host network.

Suffice to say, whilst the researchers admit to using the site regularly, they have no dog in the race between them and the regulators.  Instead, they hope that the data will speak for itself and better inform the debate surrounding the site, and those like it.


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