Last updated: 11:30 AM ET, Thu January 21 2016

Is Airbnb Profiting Off 'Illegal Hotels'?

Hotel & Resort | Patrick Clarke | January 21, 2016

Is Airbnb Profiting Off 'Illegal Hotels'?

Photo courtesy of Thinkstock

Short-term rental service Airbnb is cashing in on what amount to "illegal hotels," according to a study funded by the American Hotel & Lodging Association (AH&LA).

Based on data analyzed from the 12 largest metro areas in the U.S., researchers at Penn State University's School of Hospitality Management found that operators renting out multiple units accounted for nearly 40 percent (more than $500 million) of Airbnb's revenue from September 2014 to September 2015.

What's more, researchers revealed that nearly one-third (30 percent) of Airbnb revenue over that time period was brought in from full-time hosts. 

According to the study — "From Air Mattresses to Unregulated Business: An Analysis of the Other Side of Airbnb" — operators renting out properties 360 or more days out of the year raked in a whopping $378,173,374 in revenue, amounting to roughly $142,331 per host during the one-year period, researchers analyzed. 

The study found that the largest number of full-time operators reside in New York, Miami, Los Angeles and Airbnb's hometown of San Francisco. In Miami, for example, full-time operators only made up 7.3 percent of all operators, but pulled in more than 61 percent of the revenue. 

"Our industry thrives on competition each and every day, operating on a level and legal playing field. And we believe new entrants to the market like Airbnb and the commercial businesses they facilitate have those same obligations," said AH&LA President and CEO Katherine Lugar in a statement. "Unfortunately, this report shows a troubling trend as a growing number of residential properties are being rented out on a full-time, commercial basis, in what amounts to an illegal hotel, and using Airbnb as a platform for dodging taxes, skirting the law and flouting health and safety standards."

The findings were met with resistance from Airbnb, which disputed the study and shifted the spotlight to the AH&LA. 

"The overwhelming majority of Airbnb hosts are middle-class people who occasionally share the only home in which they live," a company spokesman said in an email to CNBC. "This study shows the hotel industry gets what it pays for, which in this case is a specious study intended to mislead and manipulate."

Lugar went on to accuse Airbnb of hiding behind the concept of "home sharing."

"...This data tells a very different story than the one told by Airbnb, who wants the face of Main Street but the wallet of Wall Street," she said.

"As a corporation valued at more than $25 billion, they have a responsibility to protect their guests and communities; they should not be enabling the corporate landlords who are clearly using their platform to run illegal hotels."

For more information on United States

For more Hotel & Resort News


You may use your Facebook account to add a comment, subject to Facebook's Terms of Service and Privacy Policy. Your Facebook information, including your name, photo & any other personal data you make public on Facebook will appear with your comment, and may be used on Click here to learn more.

Sandals Resorts: The 5-Star Luxury Included Resorts

Hotels & Resorts