When Techworld.com got to sit down with Airbnb’s UK and Ireland general manager James McClure at the Ignite March 2016 conference last week, the first question we asked was: Is London lagging behind the other major cities in terms of occupancy?
Unsurprisingly, McClure was ready with some stats: “London’s the third biggest city in terms of places to stay, there is a little over 40,000 places to stay and that is growing 75% year on year so we are very happy with how that growth is.”
That 40,000 listings puts London just behind New York, at 43,000, and far behind the most Airbnb dense city, Paris, with 68,000.
Airbnb doesn’t release any data to the public or to local authorities so these stats have to be taken with a pinch of salt, especially after the sharing economy company was caught purging records to limit the number of entire home listings appearing in a report.
However, when asked why public opinion has been far friendlier in London than New York, and European cities like Barcelona, where there have been street protests, McClure points to the clarity of British laws: “What has been very good in London, and the UK in general, is that the laws here are very clear as to what happens. So for example in May last year with the deregulation, Londoners were free to share their homes for up to 90 days without needing planning permission. That means it is very clear as to what happens.
“Allied to that the government increasing the rent-a-room tax allowance, kicking in for this finical year to £7,500 without needing to declare, means it is a very straightforward thing to understand. Everyone understands where the guardrails are and the government has been very progressive on that side.”
This “progressive” approach continued last week when the chancellor George Osbourne announced a tax break for “micro-entrepreneurs” in this year’s Budget, meaning Airbnb hosts will not have to pay tax on the first £1,000 they earn per-year.
McClure also gave Techworld.com a snapshot of the average UK host: “You look at the average host and who they are at present is 37 years old, they host for around 45 nights a year, earning £3,500. I think 42% are self-employed or are freelance, so often they are people that have both a spare room or space and that ability to deal with the sort of admin aspects, like check-ins and check-outs.
"One of the more surprising segments is we have a big segment of people our parent’s age that have space because their kids have left, but are also interest in providing great hospitality and having the opportunity to provide that.”
Spreading the wealth
Finally, McClure talked about how Airbnb is spreading the wealth in terms of tourism by pushing visitors to the outer boroughs. This is a narrative Airbnb likes to push and it certainly presents a world where the sharing economy company can live harmoniously with the big hotels that dominate the traditional tourist hotspots.
“Airbnb as it currently exists is actually quite complimentary in that 75% of the places you can stay in London are outside of the main tourist districts," says McClure, "and we have seen much bigger growth in the outer boroughs. On average twenty percentage points higher growth in the outer boroughs like Barnet and Hillingdon versus Kensington and Chelsea, so it is actually dispersing a lot of the benefits for tourism.”
Chair of Sharing Economy UK Alex Depledge has a similar opinion: “When you look at where people are renting, they’re not renting in the centre of London, they are renting in the suburbs. So what you are seeing is the forging of a new market where people are exploring under-used assets. That can only be a good thing.”