Airbnb's $400M contribution to Vancouver economy gets mixed reviews
Study highlights economic boost from Airbnb but fails to impress those concerned about housing affordablity
A new study has pegged the economic impact of Airbnb on the Vancouver economy at more than $400 million — but not everyone thinks it's money well spent.
"What the study found is that Airbnb hosts and guests make a meaningful economic impact on the city to the tune of $402 million by the time you take multiplier effects into account," said Smith on Tuesday.
Smith also found nearly 267,000 guests stayed almost 1.2 million nights and their hosts earned an average of $60 per night for a total income of $71 million.
"What surprised me was just the number of hosts in Vancouver," said Smith, who used Airbnb's own data and two surveys of guests and hosts to complete the report.
"There is over 8,600 listing from over 4,000 hosts. That surprised me just in terms of the size of the operation," he said.
Smith also estimated all the associated economic activity supports an estimated 9,100 equivalent full-time jobs and generated almost $32 million in taxes for the city.
Positive or negative impacts?
While the study highlighted many positive impacts of Airbnb, it failed to impress Vancouver city Coun. Geoff Meggs, who says the corresponding negative impacts were overlooked.
"This is looking at the churn of money," said Meggs on Tuesday in Vancouver. "The concern that we have is whether there is an impact on our housing stock and this doesn't speak to that."
"If the rents are going up and vacancies are going down as a result of reallocation of space to short-term rentals, I think that's an economic loss."
"There is a huge economic impact on people who are not able to get an apartment rental. That's why I keep focusing on housing impacts."
Airbnb spokeswoman Alex Dagg points out the majority of Airbnb hosts are sharing their primary home, which they may be renting themselves or might not have rented out long-term at all.
"They are renters as well. There are people who may rent a two-bedroom place and share their second bedroom occasionally. They are using this platform as an important lifeline."
But Meggs also notes that while Airbnb may be a source of important income for some, it has no actual employees in Vancouver and pays no taxes directly to the city while, about 10 per cent of booking revenue goes straight to the U.S.-based company.
Most guest would have come anyway
While the study found Airbnb had a significant economic impact on the city, it also found if the service was not available the vast majority of guests would have come anyway.
The survey estimated that without Airbnb, 93 per cent of the guests would still have travelled to Vancouver.
That means Airbnb's specific economic impact on the city was only an estimated $23 million and the city would have reaped the other $379 million in economic impacts anyway, according to Smith's own figures.
Meggs says that supports his concerns the city's housing stock is being diverted to the tourism sector without really changing the economic outcome.
But Smith counters that without Airbnb, people would still be offering and booking private accommodation on the internet.
"The people that want to rent their rooms or their homes out, they could do it on Craigslist. They could do it on Kijiji ... They could make their own website," he said.
City hall firing back
The study appears to be another attempt by the online booking service to win support for a place in the city's tight rental marketplace.
But Dagg says Airbnb is not fighting city hall and is happy to work with it on the new regulations.
"If there are unwelcome commercial operators on our platform, there should be smart, sensible regulation in place."
"We really think it is up to the city to determine what is appropriate ... Each city needs to look at their housing market to determine what makes sense."
The study also used two surveys of 230 randomly-selected hosts and 231 randomly-selected guests that had a margin of error of plus-or-minus six per cent, 19 times out of 20.