Monday, June 30, 2014

some AirBnB transaction figures for San Francisco

Politicians and interest groups in San Francisco and other cities are currently debating public policy changes in the face of the "sharing economy".  In particular, ride sharing (which I discussed in an earlier blog post), and apartment sharing, through websites like AirBnB, clearly are having a noticeable impact on taxi and hotel industries in some cities.

A recent investigation by the San Francisco Chronicle reports some interesting data about apartment sharing through Airbnb in SF:
...a Web data harvesting firm...compiled the data from Airbnb’s website on May 19...Airbnb had 4,798 properties listed in the city. Almost two-thirds — 2,984 — were entire houses or apartments.  Of the remainder, 1,651 were private rooms and 163 were shared rooms. Dozens of shared spaces were in communal “hacker hostels” that offer crash space and a place to make tech industry connections.

In addition to this quantity data, the study also reveals price data:

Citywide, entire homes or apartments averaged $226 a night, private rooms $116 and shared rooms $80. Whole houses ranged from $337 a night in Cow Hollow to $125 in Visitacion Valley.

The priciest listing: a Pacific Heights mansion for $6,000 a night.

The cheapest: a shared downtown living room for $18.
So we have some price and quantity data here.   However, it is still difficult to estimate average (say, yearly) revenue earned by Airbnb hosts, given we only know how many listings were posted on a given day, not how many actually were transacted on a given day.  
Connotate [the web data harvesting firm] could not determine how often properties were rented out, nor if they were available on the date it harvested the data. left by visitors offer some insights on frequency of use. (Not all visitors write reviews, so this underestimates usage.)  About two-thirds of listings had fewer than 10 reviews, fitting Airbnb’s portrayal of occasional use.
Say every fourth user leaves a review.  So 2/3's of users had made fewer than 40 transactions.  Depending on distributional assumptions, the average number may be somewhere around 25 transactions.  Given the modal unit rented is an entire apartment, which rents for $226 on average, it seems the average Airbnb host in San Francisco is making less than $6,000 ($226*25 = $5,650) over some period of time (say one year).

Of course this estimate involves many assumptions.