Airbnb: like it or not, it’s creating jobs and moving money, at least in Spain

Enrique Dans
Jul 1, 2015 · 4 min read

Yesterday, June 30, Airbnb presented a report on the company’s economic impact in Madrid (pdf, 14MB, in Spanish). Based on occupation figures, surveys of hosts and guests, data from the Spanish Statistics Institute, and even environmental information, it follows a similar report on Barcelona (in Spanish), and shows that its activities in the Spanish capital generate some €323 million euros and 5,130 jobs, matched respectively in Barcelona by €128 million and 4,310 positions.

Leaving the numbers to one side, the two reports illustrate that Airbnb has reduced the costs of putting people looking for somewhere to stay with people looking to rent accommodations.

In short, it is now infinitely easier to find somewhere to stay in Madrid than it was before Airbnb existed. What’s more, there is a much wider choice of accommodations. Aside from traditional hotels, it is possible to pay a few bucks to share a room in a cheap neighborhood in the outskirts of the city, or to splurge on a luxury apartment in the very center of the city. The map of Madrid is bristling with places to stay, as we have previously seen with Paris in this amazing visualization using CartoDB.

As well as having galvanized the market, Airbnb has prompted many people to let their property out who wouldn’t previously have considered doing so, further widening the choice available to visitors.

Of course all this raises questions, albeit of a secondary nature. Do the owners of properties let out through Airbnb pay their taxes? Some will, and some won’t, as happens in the wider economy. But there is little incentive to cheat the taxman, given that all the information regarding rentals can easily be accessed by the fiscal authorities.

In the old days, backpackers arriving at train stations throughout Europe would be met by people with nearby rooms to rent, a deal would be struck, payment made in cash, and nobody was any the wiser. Now guests pay via an app, and it is much easier to control what is going on. Let’s be clear here: using the internet makes things more transparent and easier for the authorities to monitor.

But what about Airbnb itself: does it pay taxes? As I have pointed out in many articles about online platforms, Airbnb will pay what it is obliged to do so by the law and where it is to its advantage to pay taxes. I repeat: where the law permits. The law. And if we don’t like the arrangements, then we can change the law, but we can’t criticize companies for taking advantage of existing legal arrangements. As long as crossed-selling is legal, there is no point in criticizing companies for transferring their profits out of the country where they operate and paying tax somewhere else. I don’t like the practice, and I believe that you should pay taxes in the country where you make your money, but as said, to change that, we need to change the law, and in the meantime, companies will exploit the opportunity to create the maximum value for their shareholders.

And what about the people living next door to an apartment that is suddenly filled with holidaymakers coming and going at all hours? Well, Airbnb does try to control the use of properties let out through the site, along with insurance, and rankings of how guests have behaved, making it unlikely that people who are rowdy will be able to rent out other properties.

Obviously, most of us would rather live next door to an empty property, but if it is going to be let out, then it is better done through Airbnb. The company is at pains to point out to letters who want to hold on to the value of their property that establishing a relationship with guests, paying attention to small details like leaving cold drinks in the fridge, providing information about where to go, what to do, eat, etc, or work toward reducing anti-social behavior. There are of course some “horror stories” out there about Airbnb, but things also go badly wrong when people rent properties by other means - albeit with less publicity, maybe.

Airbnb’s survey provides one perspective, a partial one, admittedly, of the impact of the sharing economy on a major city. The important thing here is not the isolate case of Airbnb: what really matters is that technology offers possibilities that once invented, quite simply cannot be “uninvented”.


(En español, aquí)

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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