During this topsy turvy year the word “staycation” has wormed its way into our vocabulary. Whether we like it our not, it is likely to be part of our plans for much longer than we would prefer. By now we are familiar with the steps involved with a staycation, or even a vacation if thats not too far flung an idea for todays world. Though are we fully aware of the costs?
Chances are, when you are considering a stay away one of the first things you will do is price the accommodation. More often than not this involves taking a visit to Airbnb.com. You are not alone in this. In fact, Airbnb are aiming for 1 billion visits annually by 2028, yes…billion.
Sure, when you are planning a staycation you weigh up the costs, 100 quid for fuel maybe a bit more for drinks. Most of the time the biggest cost is the accommodation (perhaps flights.. but who gets to go on one anymore). Though, are we really aware of accommodation costs and how we measure them?
A number of papers have been written on the subject, each of them outline the effects of Airbnb on local economies from a slightly different perspective, but let’s start this out positive, what are the benefits?
So you’ve told me the benefits, but what are the costs? In the interest of keeping this blog balanced, let us challenge the benefits I have just outlined.
Overall, studies show that a 1% increase in Airbnb listings is causally associated with a 0.018% increase in rental rates and a 0.026% increase in house prices. While these effects may seem very small, consider that Airbnb’s average growth is about 44%…a year! Rent in the UK has increased by 8.6% from Jan ’15 to Dec ’19, a significant increase. In London (where 1/50 homes is now a short-term rental), rents have increased twice as fast as the rest of the UK. Renters in London are now paying up to half their income in rent, this is not totally driven by Airbnb but it is undoubtably a contributor.
It’s easy for me to sit here behind a computer and blame Airbnb for the woes of the rental sector, when in reality the problem goes much deeper. Many feel that the company is a convenient scapegoat for the impossible scenario landlords have been cornered into. The combination of scrapped tenant fees, zero mortgage relief and an extremely exhausting list of compliancy legislation make it almost impossible to self-manage a property. It is far more likely that this, along with the governments inability to deliver on house-building promises is the real driver of the woes. The issue of Airbnb is just the tip of the iceberg, it is a problem and more needs to be done to ensure that the operation of Airbnb does not come at the expense of our economy; but the issue requires policy makers to look at the issue through a wider lens and do more to tackle the real drivers.
Rant over, hopefully you found this somewhat useful (or at least made it this far). Im not sure if this will stop anyone from using Airbnb, I know I wont, but in this world of ethical consumerism it is useful to be aware of the impact our purchases have. So next time you are scrolling through the feed of cosy, quirky and modern listings spare a thought for the renters that are being impacted by the operation of this lettings juggernaut.
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