Some people love it, some people hate it, and some people just plain don’t understand it. Airbnb, a darling of the “sharing” economy everyone’s talking about where people rent out rooms or places they’re not using to travelers and the like, is growing in Detroit.
If you don’t know what Airbnb is, in a nutshell, it’s where people use an online service to book rooms in other people’s houses or properties. You can reserve dates, see pictures of the room, know where it’s located and read reviews of the host. No cash exchanges hands; it’s all done online and Airbnb takes a cut to manage the operations such as the website, the transaction and process the credit cards. The hosts set the price.
New data out this morning from Airbnb shows approximately 300 hosts have hosted 20,000 guests, a growth rate of 127% over a year. The report covers July 1, 2015 through June 30, 2016
On top of that, typical host earnings per year for active hosts are $3,700, and there’s an average of 42 nights a year booked for a typical listing.
According to Airbnb, nearly half (47%) of the hosts use it to help pay bills. As to whether or not properties are being converted in the Midwest to being just Airbnb rentals, the company says 82 percent of hosts share only the home in which they live – defined as either renting a spare bedroom, or the entire home if they happen to be out of town for a weekend.
There has been some controversy with AirBNB in parts of the country. Some in New Orleans believe it’s pushing residents out for tourist rentals; while in Chicago, they’ve created a municipal framework of regulations that sets aside a tax to benefit the homeless in the city. However, Chicago is a much bigger market than Detroit for AirBNB, with 5,000 hosts. Also, some brick-and-mortar hotels believe that it takes away revenue, while others say it provides lodging options in underserved areas that don’t have hotels.
Below is a graphic listing the 14 major Airbnb cities in the Midwest and which is the most popular. You’ve heard what this report says (you can download the pdf here) – what is your experience with Airbnb?