Let's Talk About Cities #2 – AirBnB and Its Discontents

“Airbnb is a trusted online marketplace for people to list, discover, and book unique accommodations around the world. From a private room to a private island, we offer an entertaining and personal way for travelers to unlock local experiences and see their surroundings through the eyes of a local.”

- Joe Gebbia, designer - Co-founder and CPO of Airbnb1

Airbnb was founded in 2008 as an idea similar to couchsurfing, a cheap and simple alternative to staying in hotels or hostels when travelling. Air comes from air mattress and BnB from bed & breakfast, which is what the founders offered as the very first hosts. It has achieved a high degree of influence, with over 650 000 hosts and more than 6 million listings: nearly double the amount of rooms of the three biggest hotel chains in the world combined. An obvious difference to hotels is that Airbnb itself doesn’t own the properties listed - it is just a platform for hosts and guests, like Booking.com.2

Factors of success

In The evolution of trust in Airbnb: A case of home rental Eyal Ert and Aliza Fleischer argue that the success of Airbnb can partly be explained by the company continuously emphasizing how people can experience a “bonding experience by sharing their homes”. They explain how Airbnb provides the travelers with several trust indicators: Reputation (by showing reviews of past renters), Host Identity (by personal photos and texts from and about the person renting out) as well as Certification (by giving a “Superhost” badge to hosts with many and good reviews)3 (Ert, E., Fleischer, A., 2019)

Some argued that from an economical point of view, platforms like Airbnb improve the efficiency of goods that are not or not-fully used. The value of flats that would be empty during the summer months for example is not used. By renting them out for a short time, the efficiency is improved.4 (Barron et al., 2020)

Commercialisation

The high profitability of renting out an apartment, a house or a room through Airbnb - according to a study of Airbnb in Vienna it can be 35-70% more profitable than regular rents - has lead to a commercialisation of the platform.5 With ten times as many listings as there are hosts, it is clear that many hosts are not locals renting out their rooms, offering an authentic, local and personal experience, but rather companies that rent out several dwellings at the same time. Apartments have been bought up and even specifically built with the purpose of renting them out en masse through Airbnb.

Apart from moving the experience offered by Airbnb to its customers away from the authentic and personal to the commercial and anonymous, this development leads to numerous social and economic issues in cities around the world.

It can be problematic enough when a single apartment in a building is rented out to different people days or weeks at a time as strangers can disturb the social structure of the building and its residents. They might have disturbing habits, be loud or otherwise asocial, as they don’t have a connection to the house and in any case don’t stay long enough to integrate. When several apartments in a building are rented out that way, the issue is multiplied and at the point where several houses in a neighbourhood are filled with Airbnb-listings the problem can affect the entire character of the neighbourhood. On an even larger scale it can affect entire districts or even cities, as seen in Amsterdam, Barcelona and Berlin.

Obviously it can also bring positive effects, primarily economical benefits for restaurants, cafés or shops - which raises the topic we dealt with in the episode about gentrification: that of the right to the city of residents contra business.

Further effects of an increase in Airbnb-listings relative to the rest of the rental market are evictions and increased rents. When it’s more profitable to rent out apartments to tourists than to locals and there is a lack of housing, an economic incentive is created to raise rents or, when possible, push local residents out to then list their apartments on Airbnb.

And at that point the topic of Airbnb must be connected to that of the housing market in general. As with the housing market in general, questions must be asked about the political response to speculation on housing. What role do states or local governments play? How strong is the right to property in relation to the right to the city or right to such a basic need as housing? What responses could there be?

Examples of conflict

The issue is really with tourism and especially certain kinds of tourism. The number of international tourists is expected to double by 2030, according to the World Tourism Organization. In cities like Barcelona or Amsterdam, yearly visits outnumber the residents at a ratio of 20 or even 30 tourists per resident. Depending on the type of tourism this brings different problems.6

There are the very directly visible issues like loud, drunk people vomiting and urinating on the streets and buildings or leaving trash after them, but also the increase in tourist traps like souvenir shops or cannabis cafés as commercial infrastructure serving the locals is driven out. There are the previously mentioned effects on the housing market and accompanied further touristization and commercialisation of entire districts. That level of overtourism turns cities into theme parks and disrupts the lives of their residents. It also pushes the residents further out from city centers, making the cities less compact. Perhaps the most problematic kind of tourism is that of day visitors, who arrive on tour buses or cruise ships with heavy emissions, flood the city centers and then leave without even having consumed or bought enough to bring economic benefits.7

To illustrate part of the issue in Barcelona on an economical level I’ll quote an article from the Guardian: In 2018 there were 30 million tourist visits and 1,6 million residents. “For residents, this has translated into a 50% rent increase over the past five years. A 24-year-old earning an average wage now faces a monthly rent equal to 114% of their salary. As a result, about 80% of 16- to 30-year-olds still live with their parents.”6

Overtourism impacts cities’ ecological, economical, social and cultural sustainability. The issue with Airbnb in that context is how compared to other factors involved in overtourism, such as low-cost air travel, cruise ships or more conventional forms of accommodation like hotels, there isn’t an existing framework of regulation of Airbnb - that has allowed for its disruptive power to grow.

Responses to Airbnb

Possible measures by state or local governments are mentioned by Shirley Nieuwland and Rianne van Melik in Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals 8:

-   To ban Airbnb in general / restrictions in certain neighborhoods

-   Limiting the rental period or the maximal number of visitors

-   Permanent residents need to be present during rental period, no entire apartments can be rented out (of course very hard to control)

-   Maximal number of listings per property owner

-   Paying an occupancy tax which already has been implemented in some countries.

In the podcast we also discuss what we as individuals can do to travel in a manner that is more sustainable and respectful to locals.


1 BrainyQuote.com. Joe Gebbia Quotes. BrainyMedia Inc, 2021. URL:
https://www.brainyquote.com/quotes/joe_gebbia_897321 accessed February 2021.

2 AirBnb Inc. 2021. About Us. URL: https://news.airbnb.com/about-us/ accessed February 2021.

3 Ert, E. & Fleischer, A., 2019. The evolution of trust in Airbnb: A case of home rental. Annals of Tourism Research. Volume 75. p 279-287. URL: https://www.researchgate.net/publication/332172911_The_evolution_of_trust_in_Airbnb_A_case_of_home_rental accessed February 2021

4 Barron, K. , Kung, E. , Proserpio, D. 2020. The Effect of Home-Sharing on House Prices and Rent: Evidence from Airbnb. Marketing Science. Volume 40. p 2, 3. URL: https://marketing.wharton.upenn.edu/wp-content/uploads/2019/08/09.05.2019-Proserpio-Davide-Paper.pdf accessed February 2021

5 Seidl, R.J., Plank, L., Kadi, J. 2017. Airbnb in Wien: eine Analyse. Interactive Research Report. URL: http://wherebnb.in/wien. accessed February 2021. Vienna.

6 Henley, J. 2020. Overtourism in Europe's historic cities sparks backlash. The Guardian. URL: https://www.theguardian.com/world/2020/jan/25/overtourism-in-europe-historic-cities-sparks-backlash accessed February 2021

7 van Dongen, A. 2019. Banning Airbnb is the worst thing Amsterdam could do, says tourism expert. Het Parool. URL: https://www.parool.nl/nieuws/banning-airbnb-is-the-worst-thing-amsterdam-could-do-says-tourism-expert~b3652c84 accessed February 2021

8 Nieuwland, S. & van Melik, R. 2018.: Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals. Current Issues in Tourism. URL: https://www.researchgate.net/publication/326814900_Regulating_Airbnb_how_cities_deal_with_perceived_negative_externalities_of_short-term_rentals accessed February 2021