Report: Airbnb, hotels, and growing the hospitality pie in LA

Last month the New York Times exposed the hotel industry’s multimillion-dollar plan to protect their profits by attacking our host community. As part of its agenda to limit home sharing, the American Hotel and Lodging Association has opposed Airbnb’s efforts to collect and remit taxes on behalf of our guests and hosts in Los Angeles.

While our host community continues to pay its fair share in taxes, groups representing the hotel industry are misleading the public about the impact of short-term rentals on the traditional hospitality industry to protect their profits.

As a result, we decided to evaluate the health of the hotel industry in Los Angeles. Our research found that even as more people share their homes, traditional hotels in Los Angeles continue to take in record profits.

The hotel industry in Los Angeles continues to experience strong, sustained growth despite the rise in home sharing

By virtually every measurable metric, the hospitality industry in Los Angeles exceeded expectations in 2016:

  • Los Angeles County’s average hotel occupancy rate surpassed 80% for the first time in County history.
  • A record 29.2 million hotel room nights were sold countywide, with average daily rates (ADR) reaching a new high of $171.95.
  • To accommodate demand, hotel developers are jockeying for tax breaks and planning to build 6,000 additional hotel rooms, including a 900-room InterContinental downtown and a 216-room Kimpton in Hollywood.
  • With 31.1% more hotel rooms under construction in 2017 than in 2016, the industry remains keen on increasing available supply in order to meet the needs of Los Angeles’s flourishing travel industry.

There is room for both hotels and home sharing in the hospitality industry.

Despite the hotel lobby’s multi-million dollar campaign to undermine home sharing, our report demonstrates there is room for both hotels and home sharing in L.A.’s hospitality industry.

In fact, we believe home sharing is actually growing the “hospitality pie.” One-third of Airbnb travelers would not have traveled or would not have stayed as long if not for Airbnb. In Los Angeles, 51% of Airbnb room-nights come from 7+ day stays, vs average stays of ~2 days for hotel travelers. And finally, Airbnb serves “overflow” travelers during times when hotels are booked (e.g. during events) — travel that physically would not have been able to happen without Airbnb’s supply.

One-third of Airbnb travelers would not have traveled or would not have stayed as long if not for Airbnb.

Everyday Angelenos, who earn an average of $7,200 a year sharing their homes on Airbnb, and the billion dollar hotel industry, can exist together in today’s booming tourism economy. When policymakers see the facts and become informed about how all Angelenos can benefit, it becomes clear why hundreds of municipalities around the world have developed fair home sharing rules that benefit hosts and protect and strengthen communities — and why doing the same here in Los Angeles is a win-win for hosts and the city.

Everyday Angelenos, who earn an average of $7,200 a year sharing their homes on Airbnb, and the billion dollar hotel industry, can exist together in today’s booming tourism economy. When policymakers see the facts and become informed about how all Angelenos can benefit, it becomes clear why hundreds of municipalities around the world have developed fair home sharing rules that benefit hosts and protect and strengthen communities — and why doing the same here in Los Angeles is a win-win for hosts and the city.

For a full copy of the report on the health of the hotel industry in Los Angeles can be found below.

Read full report