From Barns to Breakfast: A Look at Airbnb Value Generation

On a recent roadtrip to Montreal, I stayed one night at an Airbnb in the small but beautiful town of Warrensburg, New York. The residence was built into a barn complete with a vinyl record player (and maybe one too many Neil Diamond vinyls), homemade brown sugar oatmeal, and of course 24/7 access to some friends well-partitioned below (pygmy goats, horses, chickens, etc.) Though short, it was a charming experience and the host had lived in the adjacent house for 47 years with her parents living across the street and her daughters just a little further down. A true snapshot of small-town living. The host was a hospice nurse by day but she had mentioned how she had such frequent bookings to her Airbnb that it was becoming a very welcome part-time job managing it. Given its remoteness, it is hard to imagine how she would have ever had such frequent visitors to her residence prior to being able to get such exposure in a connected world. After my stay, I wanted to see what kind of economic value Airbnb generated for hosts and the cities they live in such as the one in Warrensburg. While it would have been great to see how much economic value was being generated for rural residents, the open data from Inside Airbnb primarily focuses on urban centers, which can serve as benchmarks for understanding other regions. The graph below shows the monthly hosting revenue for frequent hosts on an individual basis and an aggregate for their city. A frequent host is defined in this graph as one who has had a booking in the last 6 months and averages >60 nights of reservations per year:


While these figures represent estimates from the methodology used by Inside Airbnb, it nonetheless provides a reasonable glimpse into value generated by these listings. For example, San Francisco Airbnb activity generates just over $10M monthly revenue for its frequent hosts with a substantial estimated income stream of ~$3300 per listing per month. Collectively, these cities and listings alone collectively generate >$150M of monthly transactions on the AirBnb platform (and >$4.5M to Airbnb at the 3% commission). New York tops the list by far in cumulative activity at just over $50M and not without the inevitable accompanying backlash. All things considered, while Airbnb has certainly created its fair share of controversies, it’s difficult to see how these things outweigh the benefit of those willing to share their unused space, build their own guest house for new company, or convert their backyard barn into a unique experience for a stranger.