Last updated: 05:00 PM ET, Fri April 01 2016

AH&LA Report Suggests 'Illegal Hotels' Driving Airbnb Revenue in LA

Hotel & Resort | Patrick Clarke | April 01, 2016

AH&LA Report Suggests 'Illegal Hotels' Driving Airbnb Revenue in LA

Photo courtesy of Airbnb

More than two months after releasing a study suggesting short-term rental service Airbnb is profiting off of "illegal hotels" around the country, the American Hotel & Lodging Association (AH&LA) has released the second phase of its report.

The study, conducted by the Pennsylvania State University School of Hospitality Management, focused on Airbnb listings in Los Angeles, but revealed similar findings to the national study.

For example, the report found that less than five percent of Airbnb operators in L.A. listed properties for rent more than 360 days per year and accounted for nearly $80 million in Airbnb revenue. That figure represents more than 30 percent of the San Francisco-based company's total revenue in L.A.

READ MORE: How Hotel, Airbnb Rates Compare Around the World

What's more, the study found that nearly 70 percent of Airbnb's revenue in the city is tied to operators who rent out their properties for more than half of the year or more than 180 days per year.

"In Los Angeles, a greater percentage of Airbnb's revenue is tied to hosts who run unregulated – and often illegal – hotel businesses, listing one or more residential units for rent in the same metropolitan area to short-term visitors for a large portion of the year, if not the entire year," said research director Dr. John O'Neill in a statement. 

The study found that almost all of Airbnb's revenue in L.A. (98 percent) comes from the 84 percent of operators who listed properties for rent at least more than 30 days per year. 

READ MORE: Is Airbnb Profiting Off 'Illegal Hotels'?

Based on the data, the report concluded that Airbnb operators in the L.A. region would have been required to pay out more than $41 million in local taxes to regional municipalities last year had they been subject to the same tax rubric as local lodging businesses.

"Airbnb's unwillingness to be forthcoming with data about how its site is being used demonstrates that its 'honor system' for tax policy and enforcement, as they’ve proposed in LA, won’t work," said AH&LA president and CEO Katherine Lugar in a statement.

Lugar went on to say "state and local governments should act to ensure a fair travel marketplace by addressing illegal hotels and commercial operators in L.A."

The second phase of the AH&LA report comes on the heels of a recent study from hospitality research firm STR that found there was no evidence Airbnb was negatively impacting hoteliers in Manhattan. 

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