Changing neighbourhoods, changing real estate – The ... · CROWDFOUNDING on kickstarter more than 89 000 projects financed worth of $1,8 billion ONLINE STAFFING more than 30 000

Gábor Dudás research fellow

Gábor Dudás [email protected]

Changing neighbourhoods, changing

real estate – The emergence of Airbnb

in Budapest

Lajos Boros assistant professor

University of Szeged,

Department of Economic

and Social Geography

Viktor Pál assistant professor

University of Szeged,

Department of Economic

and Social Geography

Actuality of the topic


The development of information technologies

web 2.0

Mobile technologies

ease, low-cost and speed of connecting people

Changes in consumer habits

Urbanization: more people live closer together

Economic pressure: sharing resources means utilizing/monetarizing idle capacities

Sustainability: in a resource constraint world, efficient use of resources becomes a

necessity

Rise of the

SHARING ECONOMY

„Sharing economy allow individuals and groups to make money from underused assets”

The sharing economy


The essence of the sharing economy:

• sharing underutilized resources

(e.g. assets, services, money)

• on an on-demand basis

• throughout an IT platform

• on trust (special attention paid to personal interactions)

• endeavouring sustainability

The sharing economy


PEER TO PEER ACCOMODATION

worth of $24 billion

more than 140 000 people rent accommodation

on a typical day

(7000 home for rent on Airbnb in Hungary)

CAR SHARING

worth of $50 billion

1 000 000 ride with Uber on a typical day

(55 000 users of Uber in Hungary)

MUSIC AND VIDEO STREAMING Spotify has 75 million active and 20

million paying users worldwide

Netflix has 60 million users worlwide

PEER-TO-PEER LENDING AND

CROWDFOUNDING on kickstarter more than 89 000

projects financed worth of $1,8 billion

ONLINE STAFFING more than 30 000 registered

service

„a trusted community marketplace for people to list, discover, and book unique accomodations

around the world”

An overview of Airbnb


Airbnb was founded in mid 2008

Online platform

Listed spaces are: • 57% entire apartments and homes

• 41% private rooms

• 2% shared rooms

Payments via Airbnb website

Airbnb charges: • 6-12% fee for guests

• 3% fee for hosts

„a trusted community marketplace for people to list, discover, and book unique accomodations

around the world”

An overview of Airbnb


0

1 000 000

2 000 000

5 000 000

10 000 000

MI D 2 0 0 8 E AR L Y 2 0 1 1 MID 2 0 1 1 E AR L Y 2 0 1 2 MID 2 0 1 2

BOOKED ROOM NIGHTS ON AIRBNB

12 M

10 M

8 M

6 M

4 M

2 M

Source: Guttentag (2015)

Rapid growth over the past few years

By mid-2012 an average of 38 000

people were using Airbnb per night

Listings in more than 40 000 cities

Half of the listings in Europe

Quarter of the listings in the USA

Airbnb averages 425 000 guest per

nights

155 million guest stays annually

0

50 000

110 000

200 000

300 000

MI D 2 0 0 8 L ATE 2 0 1 0 MID 2 0 1 1 MID 2 0 1 2 E AR L Y 2 0 1 3

NUMBER OF AIRBNB LISTINGS

Future growth is threatened by legal issues

• much Airbnb rental activity is actually illegal

• Airbnb is avoiding its full tax obligations

Illegal short-term rentals

• cities prohibit short-term renting without special permissions

• limiting short-term rentals certain geographic areas

• limiting the proximity of short-term rentals to one another

• limiting the number of times per year a residence can be rented out

Tax obligations

• renting occurs largely in the informal sector guest avoid paying the taxes

• Airbnb does not charge such accommodation charges

The legal issues surrounding Airbnb


Reasons for prohibition • Satisfy health and safety standards

• Limited housing supplies in large cities

• Raising rents

• Stream of tourist can be unpleasant for

other tenants

Benefits of short term rentals • it fosters tourism

• short-term renting provides additional

income for hosts

• Helps host to pay mortgages and prevent

foreclosures

cons cons pros pros

Research questions


How widespread is Airbnb in Budapest?

Is there any special charachteristics in Airbnb spatiality in

Budapest?

How does Airbnb shape hotel prices in district V. and

district VIII. in Budapest?

Is Airbnb a good business opportunity for people in

Budapest?

Methodology


Data source:

• Hotel prices: www.skyscanner.com

• Airbnb prices: www.airbnb.com

Flexible booking dates

Fixed check in and

check out dates

1 night stay

Available lowest price recorded

Automated data extraction (Imacros software)

Data collection on a daily basis

Airbnb in Budapest


District VI – 737 rentals

District VII – 614 rentals

District VIII – 312 rentals

Source: www.airdna.com

According to Airbnb

data:

around 6700 listings in Hungary

most of the listings in

Budapest (~5200)

70% growth in the

number of listings in

2015

146% more bookings

in 2015


Prague 6000 active rentals 157% growth in bookings

in 2015

Vienna 4500 active rentals 127% growth in bookings

in 2015

Warsaw 1800 active rentals 143% growth in bookings

in 2015

Krakow 1800 active rentals 152% growth in bookings

in 2015

Airbnb in Budapest


1 086 837 1 137 485

1 187 014

1 333 029

1 752 458

131 587 144 983

279 908

395 146

743 457

0

250 000

500 000

750 000

1 000 000

1 250 000

1 500 000

1 750 000

2 000 000

2010 2011 2012 2013 2014

National data District 5 District 6 District 7 District 8 Budapest (total)

Source: edited by the authors based on data of Hungarian Statistical Office

Number of foreign tourist nights in other business type accommodation

establishments

Airbnb in Budapest


Source: www.airdna.com

32 30 46

143

228

37 39 55

79

117

STUDIO 1 BEDROOM 2 BEDROOM 3 BEDROOM 4+ BEDROOM

Median price per night (USD)

Houses Apartments

[SZÁZALÉK]

12% 2%

Entire place (4478)

Private room (623)

Shared room (99)

18%

38% 18%

13%

9%

4%

Zero reviews

1-9 Reviews

10-24 Reviews

25-49 reviews

50-99 Reviews

100+ Reviews

Airbnb listings (~5200 active rentals) Airbnb listings (~5200 active rentals)

median nightly rate:

• entire home $45

• Private room $28

• Shared room $16





Airbnb in Budapest


Source: RSM Hungary Tax Consultancy and Financial Advisory Services Plc.

SHORT-TERM RENTALS

via Airbnb 40 m2 downtown apartment

occupancy rate 60%

$30 daily rate

~ $218 profit

60 m2 downtown apartment

occupancy rate 50%

$55 daily rate

~ $400 profit

after taxes and

maintenance costs

after taxes and

maintenance costs

LONG-TERM RENTALS

LEGALLY


$375 monthly rate

~ $316 profit

after taxes


$567 monthly rate

~ $396 profit

after taxes

1, Destination impacts:

How does Airbnb impact destinations’ tourism economies?

2, Accomodation impacts:

How is Airbnb impacting the occupancy levels and room rates at hotels, B&Bs,

and hostels?

3, Appeal:

What types of tourist are attracted to Airbnb?

4, Choosing between Airbnb listings:

What is the importance of different factors in selecting a particular Airbnb

accomodation?

5, Resident attitudes:

How does Airbnb impact residents’ positive and negative attitudes towards

tourism?

Conclusion, future research


Thank you for your attention!


Documents

Changing neighbourhoods, changing real estate – The ... · CROWDFOUNDING on kickstarter more than 89 000 projects financed worth of $1,8 billion ONLINE STAFFING more than 30 000