What does Air BnB tell us about the value of home ownership?

Report
What does Air BnB tell us about the value of
home ownership?
Becky Tunstall
HSA, York, April 2014
[email protected]
01904 321 475
1
Home ownership
Traditionally valued for offering residents:
i) security and privacy, and
ii) the opportunity to build an asset and to make capital gains. (refs)
Not traditionally valued for offering residents:
i) the opportunity for discretionary sharing, especially with strangers, and
ii) the opportunity to make an income while in residence.
2
AirBnB
“Find a place to stay. Rent from people in over 34,000 cities and 192
countries” (www.airbnb.co.uk)
Started 2008 in San Francisco
Householders place adverts on the site, describing the home in a set format.
They are able to set the fee charges, to specify check-in and check-out times
and ‘house rules’. They are also able to get an AirBnB rep to visit to take
attractive photos.
The site makes income from both householders and renters, charged at “612%” of the stated price to guests, and 3% to hosts (www.airbnb.co.uk).
Users are encouraged to leave reviews of their stay, by a reminder email.
Hosts are also encouraged to review guests, although few take up this
option.
3
The ‘sharing economy’
Air BnB is part of the internet ‘sharing economy’ - websites enable sharing
of cars, bikes, tools, household goods and even clothing
Housing is an unusual ‘share’ as owner and renter may use the rented item
simultaneously, and because of its high capital, rentable – and sentimental value
However, the rapid growth of Airbnb and similar housing ‘sharing’
businesses (eg Couchsurfing and Home Away), seems to challenge the
traditional understanding of home ownership.
4
Aims
This paper aims to answer the following questions:
1.
2.
3.
4.
Which households participate in AirBnB?
Which homes participate in AirBnB?
Why do householders participate in Airbnb, and how important
financial motives are in relation to any other motives, and to costs of
participation?
Is it of value to go beyond this very small pilot study?
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Methods
1.
2.
3.
4.
Review of literature on home ownership, and on motives for acting as a
landlord to lodgers, and on AirBnB and similar services
Analysis of UK data on AirBnB website, with a focus on the case study
area, York
Analysis of data on case study city’s housing and overnight stay market
Interviews with a small number of AirBnB landlords in York.
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Air BnB UK: An idiosyncratic geographical
spread
Offers March 2014 in England’s largest built-up areas (2011):
1.Gtr London, 2.Gtr Manchester, 3.W Midlands, 4.W Yorkshire - all 1000+ offers
• LBs Camden, Islington, Southwark etc – 1000+
5.Bristol - 641
6.Leicester - 157
7.Liverpool – 179
8.Nottingham - 150
9.Sheffield - 159
10.South Hampshire - (‘Southampton’) 304
11.Tyneside (‘Newcastle’) - 130
• Brighton – 721, Oxford – 365, Totnes – 264, York – 187
Places with tourist/travel market + somewhat bohemian culture + high housing
costs?
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AirBnB in York
‘York’:
187 bedspaces, rooms and whole homes offered (Feb 2014)
Number fluctuates daily
Only 48/187 in York LA area
Only 30/48 AirBnB ‘archetype’
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Typology of offers
1.AirBnB ‘archetype’:
Resident host (owner occupier – or tenant)
Guest has own bedroom (or space)
Guest and host share bathroom, living room, kitchen, circ space
Guest and host share some non-functional time
Host doesn’t provide food
Host doesn’t ask for deposit
30 of this type in York LA area
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2.Holiday let (inc BT-holiday let):
Non-resident host (owner occupier – or tenant)
‘Guest’ has whole home
No sharing of space or time
Listings: ‘stunning apt’; ‘Serviced apartments’; ‘holiday home’; ‘Stylish city
centre flat’
18 of this type in York
Variants:
Host uses professional cleaners, managers; may ask for deposits
‘BTL’ type properties eg new build/conversions; 1 bath per bedroom
Property also advertised on holiday let sites
Temporary version of ‘archetype’ when host away from home
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3.Traditional BnB/small hotel:
Non-resident host (owner occupier – or tenant)
Functional sharing of time
Host provides breakfast
Host uses professional cleaners, managers; may ask for deposits
‘BnB’ type properties eg multi-bedroom houses
Property also advertised on BnB sites
0 of this type in York
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Q1 Which households participate?
UK – those in idiosyncratic places
York
Age:
• 1 in 20s; 8 in 30s; 14 in 40s; 4 in 60s (mostly estimated from photos)
(27/30 identified)
Household type:
• 10 singles, 16 couples, 3 mixed sharers (29/30 stated)
Jobs:
• ‘Professionals’ eg in NHS, midwife, professional, professional, uni
scientist, public sector, scientist, teacher, engineer in family business
• Self-employed eg counsellor/mediator; web designer, photographer,
interior designer, organic gardener, + PhD student (21/30 stated)
Tenure:
• At least some tenants involved
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Q2 Which homes participate?
York:
Majority in centre, some in suburbs (but lower rent charged)
Majority 1 bathroom (requiring sharing)
Some rented
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Q3 Why do householders participate and how
important are financial motives?
According to the company:, earnings are primary motive:
“Host: Renting out your unused space could pay your bills or fund your next
holiday” (airbnb.co.uk).
In info on registration: “You're so close to a payday you can almost taste it!”
(airbnb.co.uk).
Absence of interview material - direct info on motives a research gap
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Indirect info: How much income can people
make?
York: charges per person per night:
£120
£100
£80
£60
£40
£20
£0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Costs:
Opportunity costs of being at home to let guests in; time hosting, cleaning
Laundry, cleaning, new equipment, breakages (insurance?)
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Estimated total earnings
Estimated earnings:
Guest reviews (as proxy of total stays) x min nights stay x price
?Real earnings may be x2 or more
York:
£32,996 total estimated earnings by 30 ‘archetype’ hosts
Ave c£1,000 each
4 above £4,250 annual lodger tax free limit
Some have no reviews – possibly no guests!
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Other potential motives for participating in
discretionary temporary sharing
1.
2.
3.
Opportunities for (superficial, structured) sociability
Opportunities for display of hosting skills
Opportunities for display of homemaking skills
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Indirect info on motives for discretionary
temporary sharing – opportunities for sociability
Host profiles:
“I… love to travel and meet new people”
“We enjoy travel and meeting new people”
“Pop in and say hi, or keep yourselves to yourselves, I don’t mind”
“I am happy and easy going and love having people to stay. I have just
returned from my holiday and stayed at an airbanb and loved it too”
“I like cooking”
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…Display – and appreciation - of hosting skills
Starring system
Reviews by guests (ave 22/host):
“They are a lovely couple that were friendly and so nice”
“We were brilliantly looked after”
“We were welcomed before we even rang the bell by X, who had seen us
from the window. We were offered coffee and cake and sat at the kitchen
table while X marked on our map the best restaurants and the important
sites”
“X opens her beautiful home to her guests, and is always happy to impart
her local knowledge”
“X and Y symbolized a lifestyle to me, a lifestyle that combines tranquility
and sparkles, a lifestyle that i am striving to”
“the cat was amazing”
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(How much sharing and socialising?
Varies – in some cases/times quite limited; remains discretionary:
Guests:
“We only met X and her husband on our last day right before we left and it
was nice to actually meet them”
“I stay at X's house for one night. I did not meet X, but X arranged everything
well”
“Although we shared the large, modern bath with the owners and at least
one other guest, we never encountered anyone going or coming” )
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…Display of homemaking skills
Professional photography provided
Listings:
‘Artist's stylist city centre apartment’
‘Cool contemporary room central York’
‘Renovated eco chapel York’
Further host comments:
“College of Art graduates X and Y have created the perfect, dreamy getaway… lovingly restored and styled by its artist owners… features their
original artworks… ‘We have been renovating our house for years and years something of an obsession- and thought we would put it to good use by
doing this airbnb!’”
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Conclusion: The value of home ownership
AirBnB and this tiny study provides some evidence that at least some
owners challenge the traditional values of home ownership, by valuing:
i) Opportunities for discretionary temporary sharing with strangers, and
ii) The opportunity to make an income while in residence.
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Q4 Implications for research
Worth continuing beyond pilot stage?
Meaning of home ownership and earnings from it may deserve more
research
All/other forms of shared housing – motives, modes, consequences – may
deserve more research inc types where money changes hands
Potential for much more ‘arm chair’ research via publically available data
available on housing-linked sites – as at least part of method
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Other ‘shared’ housing – with some money
changing hands
England 2011:
• 69.8% ‘households’ have more than one person (Household: people
(not necessarily related) living at the same private address who share
cooking facilities and share a living room/sitting room/dining area) (ONS
2014a)
• 1.8% households contain a concealed ‘family’ (a couple or lone parent)
(England and Wales) (ONS 2014b)
• 0.3% dwellings have more than one household
• 3.0% (single) households have multiple adults (not just couples)
• 0.6% households are multi-student
• ?lodgers
- These types are longer-term discretionary sharing , generally with chosen
sharers; money may change hands
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Implications for policy
A minority of hosts may be liable for tax on earnings
Some hosts may be infringing mortgage, tenancy and insurance agreements
In most cities, as yet presents very limited competition to conventional BnB,
hotels
Eg York:
• AirBnB = 30 ‘archetype’ hosts with 54 bedspaces, min 785 stays to date
• 20 Hotel with c1000 bedspaces and 20 BnBs with c100 bedspaces, min
c700 stays per night (BnB occupancy 49%; hotel 67% (Visit England
2013))
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References
ONS (2014a) Families and households in England and Wales 2011 Correction
30th January 2013 London: ONS
ONS (2014b) What does the 2011 Census tell us about concealed families
living in multi-family households in England and Wales? 6th February
London: ONS
Visit England (2013) England Occupancy survey – November 2012
http://www.visitengland.org/Images/November%20EOS%20Newsletter_tcm
30-40468.pdf
Qa Research (2011) Yorkshire Visitor Regional survey 2010/11: Key findings
for Welcome to Yorkshire and the 6 offices York: Yorkshire Forward
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