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Growing the Economy, Helping Families Pay the Bills
Analysis of Economic Impacts 2014
FINDINGS REPORT | MAY 2015
Executive Summary
Growing the economy through visitor spending
Supporting neighborhoods in all five boroughs
Making New York more affordable for more families
HR&A Advisors, Inc.
Airbnb, an online marketplace that allows people to list and book rooms
and homes, supported substantial economic activity in NYC in 2014.
Airbnb properties in NYC
$1.15B
TOTAL ECONOMIC ACTIVITY
$301M $844M
TO HOST HOUSEHOLDS TO NYC BUSINESSES
10,580
TOTAL JOBS SUPPORTED
Note: All analysis is based on reservation data for January – December 2014 and a survey of NYC guests and hosts who were active in 2014. Economic
activity includes $915M in direct spending and $230M in indirect and induced spending according to IMPLAN analysis. Jobs supported include jobs supported
by $1.15B in total economic spending as well as the 2.1% of hosts who stated that Airbnb was their primary source of income. See Appendix for more detail.
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 2
Airbnb supports the City of New York’s efforts to create an economy
that benefits all New Yorkers through the following three goals:
Growing the Economy, Helping Families Pay the Bills
1. Growing the 2. Supporting
economy through neighborhoods in
visitor spending all five boroughs
3. Making New
York more
affordable for
more families
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 3
GROWING THE ECONOMY THROUGH VISITOR SPENDING
The number of Airbnb visitors in NYC continues to grow rapidly.
Airbnb visitors
767,000
416,000
304,000
84%
INCREASE
37%
INCREASE
2012 2013* 2014
* 2013 numbers represent the period from August 2012 to July 2013.
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 4
GROWING THE ECONOMY THROUGH VISITOR SPENDING
Since studies conducted in 2012 and 2013, Airbnb economic activity
has more than doubled, reaching over $1B in 2014.
Total economic activity Total jobs supported
$1.15B 10,580
$632M
4,575
$428M 81% 3,285 131%
INCREASE INCREASE
48% 39%
INCREASE INCREASE
2012 2013* 2014 2012 2013* 2014
* 2013 numbers represent the period from August 2012 to July 2013.
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 5
GROWING THE ECONOMY THROUGH VISITOR SPENDING
Airbnb attracts visitors who spend more time and money in NYC.
Airbnb visitors Hotel visitors
5.8 3.9
AVERAGE NIGHTS STAY AVERAGE NIGHTS STAY
$1,450 $1,370
TOTAL TRIP SPENDING TOTAL TRIP SPENDING
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 6
GROWING THE ECONOMY THROUGH VISITOR SPENDING
Airbnb attracts a new type of visitor to NYC.
87% 81% 82%
OF GUESTS USE AIRBNB OF GUESTS USE AIRBNB OF GUESTS USE AIRBNB
BECAUSE THEY WANT TO BE BECAUSE THEY WANT TO BECAUSE THEY WANT MORE
FINANCIALLY CONSCIOUS EXPLORE A SPECIFIC AMENITIES THAN HOTELS
NEIGHBORHOOD OFFER
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 7
SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS
Airbnb visitors prefer to stay outside of traditional hotel
neighborhoods and spend money at local businesses.
$235M 83% 42%
OF AIRBNB PROPERTIES OF GUEST SPENDING
ECONOMIC ACTIVITY IN IS IN THE
IN NEIGHBORHOODS
OUTER BOROUGHS NEIGHBORHOOD
OUTSIDE OF MAJOR
HOTEL AREAS WHERE THEY STAYED
Note: “Traditional hotel neighborhoods” refers to Mid-Manhattan between 14th and 59th Streets, where 60-70% of hotel rooms are located.
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 8
MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES
Airbnb helps NYC residents pay the bills in the face of the City’s rising
housing costs.
Change in Median NYC
Income and Rent (2000-2012)
80% RENT
IN 2012 NEARLY
70%
60%
50%
55%
OF ALL NYC RENTAL HOUSEHOLDS
WERE RENT BURDENED.
40% (AN 11% INCREASE SINCE 2000)
30%
20%
10%
0%
-10% INCOME
MEDIAN RENT MEDIAN INCOME
Note: Rent burdened households spend 30% or more of their household income on rent.
Source: Office of the NYC Comptroller, The Growing Gap, 2014; City of New York, Housing New York: A Five-Borough, Ten-Year Plan, 2014.
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 9MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES
Airbnb makes NYC more affordable and helps low- and middle-
class residents stay in their homes.
Host households by income
72% 22%
ABOVE
MIDDLE-INCOME
29%
LOW-INCOME
OF HOSTS SAY THAT AIRBNB
HAS HELPED THEM
STAY IN THEIR HOMES 29%
MIDDLE 19%
MODERATE
INCOME
INCOME
Note: HR&A analyzed 1- and 2-person host households (73% of survey sample); adequate survey data was not available for Airbnb households containing
more than two people. For 1- and 2-person households in NYC, HUD defines low-income as up to $47,032 - $53,768 annual household income respectively
(80% AMI); moderate-income as up to $70,547 - $80,653 (120% AMI); and middle-income households up to $117,578 - $134,422 (200% AMI).
HR&A Advisors, Inc. EXECUTIVE SUMMARY| 10Executive Summary
Growing the economy through visitor spending
Supporting neighborhoods in all five boroughs
Making New York more affordable for more families
HR&A Advisors, Inc.Growing
\ the economy
through visitor spending
NYC Context:
In 2014, tourism supported
359,000 jobs and
$21B in wages.
City projects that
67M visitors will come to NYC
by the end of 2021.
HR&A Advisors,
Source: NYC & Co.Inc.
press releases, 2014 and 2015. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 12Airbnb supported unprecedented economic activity in 2014.
$1.15B 10,580
TOTAL ECONOMIC ACTIVITY TOTAL JOBS SUPPORTED
$301M $844M
TO HOST HOUSEHOLDS TO NYC BUSINESSES
Note: Economic activity includes $915M in direct spending and $230M in indirect and induced spending according to IMPLAN analysis. Jobs supported include
jobs supported by $1.15B economic spending as well as 2.1% of hosts who stated that Airbnb was their primary source of income. See Appendix for detail.
HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 13Airbnb generated $844 million in spending to NYC businesses across
many sectors.
$844M
TO NYC BUSINESSES
$301M
$233M
$197M
$173M
$151M
$65M
Services Food & beverage Retail Entertainment Transport Industry,
manufacturing, and
food processing
HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 14Airbnb attracts more guests looking for affordable accommodations
and experiences off the beaten path.
Affordable accommodations Local experience
87% 81%
OF GUESTS USE AIRBNB OF GUESTS WANT TO
BECAUSE THEY WANT EXPLORE A SPECIFIC
TO BE FINANCIALLY NEIGHBORHOOD
CONSCIOUS
AIRBNB GUESTS PAY AN AVERAGE
DAILY RATE OF
$160 80%
(46% LESS THAN AVERAGE HOTEL) OF AIRBNB VISITORS
STAY OUTSIDE
MID-MANHATTAN
HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 15Airbnb guests stay longer and spend more per trip than hotel
visitors.
Airbnb visitors Hotel visitors
5.8 3.9
AVERAGE NIGHTS STAY AVERAGE NIGHTS STAY
$1,450 $1,370
TOTAL TRIP SPENDING TOTAL TRIP SPENDING
$390
$600
ACCOMMODATION
SPENDING
ACCOMMODATION
SPENDING
$1,060
DAYTIME SPENDING
$770
DAYTIME SPENDING
HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 16Airbnb accommodates many international guests, who stay longer and
spend more than domestic visitors.
Airbnb visitors Overnight NYC visitors
17%
INTERNATIONAL
40%
60% 83%
DOMESTIC
INTERNATIONAL DOMESTIC
HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 17By capturing a different visitor segment, Airbnb likely attracts
substantial visits and spending that would not occur otherwise.
New visitors New visits New spending
51,390 79% 36%
OR 6.7% OF GUESTS, SAY AIRBNB MAKES THEM MORE SAY THEY WOULD NOT HAVE
WOULD NOT HAVE STAYED IN NYC LIKELY TO RETURN TO NYC STAYED AS LONG WITHOUT AIRBNB
WITHOUT AIRBNB
Note: When asked “If Airbnb had not been available, what would you have done?” 6.7% of guests stated they would not have come to NYC.
HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 18Airbnb helps solve an accommodation bottleneck, enabling NYC to
accommodate more people who want to visit.
$290 $295
$273 $281
$261
Hotel average daily rates and $237
occupancy rates continue to climb
despite 240 new hotels opening $142 $145 $144
$160
$126 $132
between 2006-2014.
2009 2010 2011 2012 2013 2014
Hotel ADR Airbnb ADR
Current 88% average occupancy rate means hotels are full during
peak seasons.
Note: Because the 88% occupancy rate is an annual average (for 2014), during peak travel seasons, the occupancy rate is much higher, with hotels almost
completely full. A 77% occupancy rate is the industry standard to induce new hotel development, indicating supply must expand to meet demand.
Source: NYC & Co., STR, HVS Forecast, HR&A analysis.
HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 19Executive Summary
Growing the economy through visitor spending
Supporting neighborhoods in all five boroughs
Making New York more affordable for more families
HR&A Advisors, Inc.Supporting neighborhoods
in all five boroughs
NYC Context:
Economic development
in the outer boroughs
supports the growth of jobs closer
to where many New Yorkers live.
Employment grew 15%
2004-2013, outpacing
Manhattan’s 10%.
Source: City of New York, Department of City Planning, New York City Population
HR&A Advisors,
Projections Inc. & Borough, 2010-2040, 2013.
by Age/Sex AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 21Most Airbnb guests stay outside main hotel areas throughout NYC.
Airbnb properties Hotel rooms
83% 60-70%
OF PROPERTIES OUTSIDE OF OF HOTEL ROOMS ARE
MID-MANHATTAN IN MID-MANHATTAN
Note: Size of each dot on hotel map indicates the estimated number of rooms for each hotel. “Mid-Manhattan” refers to Manhattan between 14th and 59th
Streets.
HR&A Advisors, Inc. AIRBNB: SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS| 22Airbnb guests spend substantially at local neighborhood businesses.
THE AVERAGE VISITOR SPENDS THE AVERAGE VISITOR SPENDS
42% $600
OF VISITORS’ SPENDING IN THE NEIGHBORHOOD
OCCURS IN THE NEIGHBORHOODS WHERE THEY STAY
WHERE THEY STAY
HR&A Advisors, Inc. AIRBNB: SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS| 23Airbnb visitors create significant economic activity in the outer
boroughs.
$235M 2,860 Airbnb visitors by where they stayed
TOTAL ECONOMIC ACTIVITY JOBS SUPPORTED IN
IN OUTER BOROUGHS OUTER BOROUGHS 5,300 3,300
BRONX
STATEN ISLAND
(1%) (Airbnb guests visit both typical tourist destinations and traditionally
less-visited outer boroughs.
Percentage of Airbnb visitors who visited each neighborhood:
Midtown 79%
Downtown 79%
Uptown Manhattan 77%
99% visited Manhattan
Financial District 54%
Harlem 24%
Upper Manhattan 24%
North Brooklyn 26%
Downtown Brooklyn 22%
45% visited Brooklyn Central Brooklyn 13%
South Brooklyn 8%
West Brooklyn 7%
East Brooklyn 5%
16% visited Staten Island Staten Island 16%
7% visited The Bronx Bronx 7%
West Queens 5%
6% visited Queens
Outer Queens 2%
HR&A Advisors, Inc. AIRBNB: SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS| 25Case study: Bedford-Stuyvesant, Brooklyn
39,895
AIRBNB GUESTS
990 HOSTS
$30M
TOTAL DIRECT LOCAL SPENDING
$10.2M TO LOCAL RESIDENT HOSTS
AND $19.8M IN SPENDING AT LOCAL BUSINESSES
HR&A Advisors, Inc. AIRBNB: SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS| 26Case study: Harlem, Manhattan
59,660
AIRBNB GUESTS
1,765 HOSTS
$43.2M
TOTAL DIRECT LOCAL SPENDING
$17.0M TO LOCAL RESIDENT HOSTS
AND $26.2M IN SPENDING AT LOCAL BUSINESSES
HR&A Advisors, Inc. AIRBNB: SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS| 27Case study: Astoria, Queens
16,290
AIRBNB GUESTS
495 HOSTS
$10.6M
TOTAL DIRECT LOCAL SPENDING
$4.0M TO LOCAL RESIDENT HOSTS
AND $6.6M IN SPENDING AT LOCAL BUSINESSES
HR&A Advisors, Inc. AIRBNB: SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS| 28Case study: South Bronx
1,500
AIRBNB GUESTS
25
HOSTS
$900,000
TOTAL DIRECT LOCAL SPENDING
$300,000 TO LOCAL RESIDENT HOSTS
AND $600,000 IN SPENDING AT LOCAL BUSINESSES
HR&A Advisors, Inc. AIRBNB: SUPPORTING NEIGHBORHOODS IN ALL FIVE BOROUGHS| 29Executive Summary
Growing the economy through visitor spending
Supporting neighborhoods in all five boroughs
Making New York more affordable for more families
HR&A Advisors, Inc.Making New York more
affordable for more
families
NYC Context:
In 2012, almost 55%
of all
rental households were
rent burdened, spending more
than 30% of annual income on rent.
Low-income renters paid
an average of 41% of
their income on rent, 11%
more than they did in 2000.
Source: City of New York, Housing New York: A Five-Borough, Ten-Year Plan, 2014;
HR&A of
Office Advisors,
the NYCInc.
Comptroller, The Growing Gap, 2014. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 3178% of Airbnb hosts are low-, moderate-, or middle-income.
Host households by income
22%
ABOVE 29%
MIDDLE-INCOME LOW-INCOME
29% 19%
MIDDLE INCOME MODERATE INCOME
HR&A Advisors, Inc. AIRBNB: MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES| 32The typical host occasionally rents out the property in which he or she
lives.
THE AVERAGE HOST
90% ACCOMMODATES AIRBNB GUESTS
OF HOSTS RENT THEIR PRIMARY
RESIDENCE ON AIRBNB
5
NIGHTS PER MONTH
HR&A Advisors, Inc. 33More hosts are reporting that Airbnb helps them to afford high
housing costs.
More hosts are saying that
A TYPICAL HOST’S
Airbnb has helped them stay in their homes
AIRBNB INCOME COVERS
compared to 2012
62% 72% 21%
OF THEIR ANNUAL RENT
OF HOSTS IN 2012 OF HOSTS IN 2014
Note: A Median Rent of $1,337 has been calculated from 2013 ACS 1-year estimates as a weighted average of median rent by borough to reflect the
distribution of hosts. Average annual Airbnb income per host is $3,515.
HR&A Advisors, Inc. AIRBNB: MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES| 34Hosts also use their earnings for other important expenses and some
extra spending.
$7,770
ANNUAL AIRBNB INCOME
PER LISTING
$3,515
$1,185
$1,035
$865
$465 $435
$270
Rent/mortgage Vacation Other regular Extra spending Long-term Other Cleaners for
household money savings Airbnb hosting
expenses
Note: Airbnb income represented is before taxes and does not reflect income tax or other taxes that host may pay on this income.
HR&A Advisors, Inc. AIRBNB: MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES| 35While hosts most frequently refer to housing costs as the primary use of their Airbnb income, they also cite other uses. When survey respondents answered “what do you use your Airbnb income for?” the most common words were: HR&A Advisors, Inc. AIRBNB: MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES| 36
Airbnb also supports the 36% of hosts with unsteady income: many are
freelancers, part-time workers, or students.
Hosts by work status
2% 1% NOT SPECIFIED
UNEMPLOYED
8%
RETIRED
4%
STUDENT
64%
IN CONTRAST, ONLY
16% FULL TIME WORKER
FREELANCER
6%
OF ALL NYC RESIDENTS ARE
SELF-EMPLOYED
5%
PART TIME WORKER
Source: Economic Modeling Specialist Intl. (EMSI) 2014
HR&A Advisors, Inc. AIRBNB: MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES| 37Airbnb supports small business entrepreneurs.
24% 11%
SUPPORT THEMSELVES WHILE SUPPORT THEMSELVES WHILE
FREELANCING LAUNCHING A NEW BUSINESS
“[Airbnb] funds a 501(c)(3) charity that I started to help women artists and entrepreneurs.”
“I am a self-employed personal trainer, and without Airbnb I could not keep my apartment.”
“Airbnb helped me furnish my new apartment and paid for initial expenses of my entrepreneurial
business for much-needed equipment and supplies.”
“I own a business, but it is struggling. For me to keep my business open, I rent out my apt. If I
didn't have this I would probably close my business and be in a position where I might not be
able to keep my apt.”
“I'm a freelance designer so often between jobs I rely on Airbnb to make ends meet. However,
when I have contract work, I tend to use the income for more leisurely activities.”
HR&A Advisors, Inc. AIRBNB: MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES| 38Airbnb also provides affordable short-term housing to new
New York residents and workers, making it easier to move to NYC.
16,110 visitors
USED AIRBNB TO INTERVIEW FOR A JOB
OR AS TEMPORARY HOUSING
WHEN RELOCATING TO NYC
Note: 2.1% of survey respondents stated they used Airbnb to interview for a job or as temporary housing when relocating to NYC in the past year.
HR&A Advisors, Inc. AIRBNB: MAKING NEW YORK MORE AFFORDABLE FOR MORE FAMILIES| 39Appendix HR&A Advisors, Inc.
Methodology DATA SOURCES Historic Airbnb booking data HR&A analyzed data on completed bookings in NYC for a 12-month period (January 2014 – December 2014). Airbnb Community Impact Survey To gather quantitative data on Airbnb guests and hosts, HR&A developed a survey instrument that was distributed by Airbnb in January/February 2015 via Surveymonkey. The guest survey was sent to randomized groups of Airbnb users who had used Airbnb as guests in NYC in the past year; 345 guests responded. The survey was also distributed to all users who had hosted in NYC in the past year; 335 hosts responded. No financial incentive was given. These sample sizes provide a high level of statistical significance. With a universe of 767,000 guests who booked an NYC rental in 2014 and a sample size of 345, the guest survey achieved a 95% confidence level with a confidence interval of 5.27, meaning that with 95% certainty, survey results were within 5.27 percentage points, plus or minus, of the entire population. With a universe of 28,200 NYC hosts in the past year and a sample size of 335, the host survey achieved a 95% confidence level with a confidence interval of 5.32. HR&A Advisors, Inc. APPENDIX| 41
Tourism industry data Custom data on international travelers was obtained from Office of Travel and Tourism Industries (OTTI) 2011 survey, and custom data on overnight domestic travelers was obtained from Longwoods International Travel USA 2011. A weighted average of overnight domestic and international visitors to NYC was used to create a profile of the average overnight NYC visitor and the average hotel visitor. Because visitor spending numbers were from 2010, visitor spending was adjusted upwards 4.5% per year to reflect estimated annual growth in spending per visitor from 2010-2014, and then adjusted to 2014 dollars. All data on NYC visitors includes overnight visitors only. These custom data reports were supplemented by data on visitors and the hotel industry in NYC obtained from NYC & Co. reports from 2010-2013 and the Office of the Mayor from 2014 and 2015. Hotel property data Hotel location data was derived from NYC Department of City Planning’s MapPLUTO tax lot database, 2012 and supplemented with various hotel development reports from NYC & Co. to include new hotels from 2012-2015. Hotel rooms were estimated by allocating the total number of hotel rooms in NYC to each lot based on commercial square footage. HR&A Advisors, Inc. APPENDIX: METHODOLOGY| 42
ANALYSIS Overview and definitions Using spending activities reported by guests and hosts on the Airbnb Community Impact Survey and the total number of Airbnb hosts and visitors in 2014, HR&A estimated that guests and hosts collectively spent $915M in the NYC economy. HR&A then calculated “spinoff” economic activity of $230M, for a total of $1.15B in gross local economic activity in 2014. “Spinoff” activity is defined as: 1) indirect economic activity caused by additional business spending stimulated by direct economic spending and 2) induced economic activity stimulated by additional household spending due to wages from the direct and indirect activity. HR&A used the IMPLAN model to make these calculations, a standard economic analysis tool (see following page for more detail). IMPLAN estimates that $1.15B in gross economic activity, combined with the 2.1% of hosts who state that Airbnb is their primary source of income, supported 10,000 jobs in NYC in 2014. Gross economic activity does not exclude spending that would happen in the absence of Airbnb by guests who would have found alternative accommodations (in contrast to economic impact, which is comprised only of net new activity). While Airbnb clearly brings new economic activity to NYC – by bringing new types of visitors who stay longer and spend more – and distributes visitor spending to more neighborhoods, adequate data is not available to quantify Airbnb’s net new impact precisely. HR&A Advisors, Inc. APPENDIX: METHODOLOGY| 43
IMPLAN model
The IMPLAN model is used to conduct economic impact analyses by leading public and private sector organizations across
the United States, including a number of federal and state agencies. IMPLAN traces the pattern of commodity purchases
and sales between industries that are associated with each dollar’s worth of a product or service sold to a customer,
analyzing interactions among 440 industrial sectors for a specific location, with assumptions about spending that takes
place outside of the location. HR&A conducted its analysis with 2012 multipliers for the economy of New York City.
Multipliers are the total production requirements in the local economy for all goods and services consumed by final users in
2012. This is the most recent data available.
The figure below illustrates the structure of economic impacts produced by the model. Multiplier or spinoff activity is
comprised of two components: 1) indirect economic impacts caused by additional business spending stimulated by direct
economic spending during construction and operating activities (e.g., supplier business operations) and 2) induced economic
impacts stimulated by additional household spending due to wages from the direct and indirect activity.
In addition to overall economic spending, the IMPLAN
input-output model also produces estimates of the number Overview of Economic Impacts, Direct and Spinoff Effects
of jobs supported and employee compensation.
Compensation generated by the IMPLAN input-output
model is based on a nationally recognized econometric
model, customized for local economic conditions. It includes
wage and salary income plus benefits and employer paid
taxes. For each specific industry, IMPLAN also provides
what percentage of total employee compensation
corresponds, on average, to wages. This tool enables
wage estimation using IMPLAN’s total employee
compensation output.
Source: HR&A Advisors, Inc.
HR&A Advisors, Inc. APPENDIX: METHODOLOGY| 44Detailed methodology
HR&A used a conservative methodology to estimate the economic activity associated with Airbnb based on estimates of
daily visitor spending in lodging, food service, groceries, shopping, entertainment and sightseeing, car rentals and local
transportation, and other expenses. In order to estimate the average daily spending for Airbnb guests, HR&A analyzed
spending distributions as reported by survey respondents and developed a ratio between spending on accommodations
and other spending categories. HR&A then applied this ratio to the average daily spending on accommodations per guest
derived from historic booking data to estimate average daily spending per guest across all spending categories. The
resulting average spending per day was then multiplied by the total number of guest nights booked in the 12-month study
period.
All spending categories but lodging were modeled in IMPLAN using their corresponding industry codes. Since lodging
expenditures also correspond to host income, the impact of this spending was modeled according to how hosts reported
spending their Airbnb income in the survey. Hosts reported that they spent 67% of their Airbnb income in categories with no
economic impacts for NYC such as vacations, long-term savings and rent or mortgage payments. After taking out this
spending, host revenues were modeled in IMPLAN to estimate the indirect and induced effects of guest lodging
expenditures. The tables below shows Airbnb guests’ average daily expenditure per category and the total economic
spending modeled in IMPLAN.
Average Daily Spending Category Modeled in
Guest Spending Category Total Spending Source of Spending
Spending per Guest IMPLAN
Airbnb Accommodation $78 Food Service $184,343,986 Guest
Food Service $41 Groceries $42,495,148 Guest
Groceries $10 Shopping $291,194,296 Guest
Shopping $65 Other Leisure Activities $145,967,603 Guest
Other Leisure Activities $33 Transportation $59,073,454 Guest
Transportation $13 Other Services $91,338,104 Guest
Other Services $21 Other Regular Household Expenses $40,145,436 Host
Extra Spending Money $33,445,537 Host
Cleaners for Airbnb hosting $10,378,099 Host
Other $16,862,162 Host
HR&A Advisors, Inc. APPENDIX: METHODOLOGY| 45Detailed methodology: spending by borough HR&A took a conservative approach to estimating total guest spending by borough. HR&A distributed the following three categories of guest spending to each borough: lodging, neighborhood daytime spending, and other daytime spending. HR&A analyzed Airbnb booking data by borough to calculate the total amount guests spent in Airbnb lodging in each borough. This estimation is net of any Airbnb fees and includes the property base price and cleaning fees. Survey results indicate guests spent on average 42% of their daytime spending in the neighborhood where they stayed; HR&A therefore allocated 42% of guests’ reported daytime spending to the borough where they stayed. This methodology leaves 58% of guest daytime spending to be distributed among each borough. In order to produce a conservative estimate of outer borough spending, and given Manhattan’s status as the center of NYC’s cultural, shopping, entertainment and dining destinations, HR&A assumed most of the remaining daytime spending occurred in Manhattan, with the rest being spent at the borough in which guests stayed. Therefore, 90% of remaining daytime spending was allocated to in Manhattan, and 10% of residual ancillary spending was allocated to the borough in which guests stayed. Total spending by borough results were then run through IMPLAN models for each borough to obtain the total economic impacts of guest spending by borough. HR&A Advisors, Inc. APPENDIX: METHODOLOGY| 46
Photo Credits Cameron Blaylock Rob Kalmbach Jacob Krupnick Julia Robbs David Vilder Lisa Warninger HR&A Advisors, Inc. APPENDIX| 47
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