Local Insights On Airbnb In San Francisco

Twenty, 10, even six years ago, most (if any) had neither the technological capability nor the foresight to imagine the future of the homeshare and vacation rental industry. But there’s no doubt about it now: Airbnb is big business.

Like many major players in the gig economy, its growth has been explosive. In recent years, Airbnb has seen multiple multimillion-dollar funding rounds and has expanded across the world, as well as into “Trips,” flight booking, corporate travel, payments and concierge service, among other things. To date, the company lists around 3 million short-term rentals across 34,000 cities.

Airbnb has faced ongoing push-back from legacy hoteliers, industry regulators, homeowners, renters and local governments each time it flexes. One of the major criticisms of Airbnb has been that landlords making big money on short-term rentals have driven up costs and worsened housing shortages in high-demand cities.

San Francisco recently voted to impose a limit on the maximum number of days hosts could rent out their properties — which could bring major changes to the city’s gig economy. But this is an old fight. The city nearly set a limit on how many weeks per year properties could be out for short-term rental in late 2015. It got pretty nasty, actually.

Airbnb eventually sort of settled with San Francisco back in 2015 — though it turned out to not be enough — and said it would better police its platform. Airbnb is still fighting over whether its hosts have to register with the city.

Using AirDNA‘s data for the Airbnb market San Francisco, it’s possible to take a look at the state of Airbnb on its home turf in the time just before the vote to limit rental days was passed — to see if the gig economy giant managed to keep its word to better monitor its site and what effect, if any, their increased policing efforts had in the following months.

Get ready for a good amount of numbers.

In San Francisco in October 2016, Airbnb hosted a total of 5,755 active listings — total listings at the end of October came in at 9,716. The data shows that, following a large increase in total listings from May 2015 to January 2016 — peaking at 11,935 — the number of listings has dropped out to the the current number, on par with the number of total listings in September 2015.

As the number of listings has fallen, the average monthly revenue Airbnb renters can expect has actually risen across all offerings, from private rooms to four-plus bedroom apartments and houses. Likewise, average daily rates across listings rose to the highest the city has ever seen, to $328. September of this year saw closer to a $292 daily rate across offerings.

The highest prior peak came back in September 2015, which saw an ADR of $313. Most months saw an average ADR in the mid- to high-$200s.

Divided into listing type, the October average daily rates were as follows: $47 for a shared room, $121 for a private room, $188 for a studio, $207 for a 1 bedroom, $306 for a two-bedroom, $426 for a three-bedroom and $720 for a four-plus-bedroom listing.

Further, AirDNA’s data shows that the median occupancy rate for an Airbnb listing in San Francisco was 71 percent in October of this year — on par with occupancy rates throughout the past couple of years.

What all of this data suggests is that Airbnb has managed to remain as, if not more, profitable for listers in San Francisco since all of last year’s bickering and controversy — especially for those renting out high-occupancy spaces.

Though the company’s cash flow doesn’t seem to have been affected, something has definitely changed in the home-stay space of the Golden Gate — namely, the dramatic drop in the total number of listings in the city since January.

While it’s tough to be sure as to the cause, the data suggests that Airbnb has held their end of the bargain. It looks like the notes and emails they left might have actually worked (as well as that whole registering thing), and exploiters of the system were driven out of the space.

Whether that means they got out of town (figuratively) or were pushed into the open app of a vacation rental competitor to continue messing with housing prices (literally) is an open question.

What is known is that just a few days ago, San Francisco recently got its wish. Thought the effects of the new legislation are yet to be seen and the mayor still has time to veto the move, whatever happens will surely be something to keep an eye on.

To keep up with the latest news, trends, insights and analysis of the growing gig economy, take a look at the PYMNTS Gig Economy Index, a Hyperwallet Collaboration.