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Airbnb business in London concentrated in five boroughs

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Airbnb business in London concentrated in five boroughs
Written by:

Five London boroughs accounted for more than half of the two million bookings taken by Airbnb in the capital last year, according to a new report.

Westminster, Tower Hamlets, Camden, Kensington & Chelsea and Hackney are identified in Airbnb – Impact and Outlook for London as “hotbeds of Airbnb activity”.

These boroughs also account for the majority of the city’s Airbnb supply, with almost four million listings.

Published by Colliers International, Hotelschool The Hague and AirDNA, the report highlights that the average daily rate achieved by Airbnb in London during 2015 was $142 (£115), compared to $220 (£178) for hotels.

It also showed by the total revenue recorded by Airbnb hosts last year was $286m (£231m), while hotels realised $8.1b (£6.5b).

The report is believed to provide the first publically available data to illustrate the impact of Airbnb on hotels.

Figures for January 2016 indicated that while hotels experienced a year-on-year fall in demand (-2%), revenues (-9%) and occupancy (-5%), Airbnb showed an increase in demand (206%), revenues (182%) and occupancy (126%). However, it is forecast that Airbnb’s future supply of accommodation in London to be more limited than demand growth as a result of increased pressure from local governments and neighbours with regards regulation.

Marc Finney, head of hotels & resorts consulting at Colliers International, said that despite a strong hotel sector in London, the continued growth of Airbnb presents a threat.

“An interesting finding of the report is Airbnb’s ability to perform even in the notoriously slow ‘off-season’. Our research showed that demand steadily increased throughout the year, and although we see a much faster increase in the summer months, this demand continues to increase outside of peak season.

“This demonstrates that Airbnb does not seem to be impacted by seasonality in the market place, which gives it a distinct advantage as this is not something that we are seeing as much in the hotels sector.”

Jeroen Oskam at Hotelschool The Hague highlighted the threat posed by “multi-listers”, Airbnb host who have more than one property listed.

“Multi-listers account for more than half of all Airbnb listings in London. When you consider the characteristics of these units and their spatial distribution, it is clear that these rentals are primarily a commercial activity; the uncontrolled expansion of which is not only harmful to the hotel market, but also to city neighbourhoods and the housing market.”

Berlin bans properties being rented on Airbnb >>

Airbnb properties in London rise to more than 25,000 >>

BHA repeats calls for greater transparency at sites such as Airbnb >>

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