Airbnb Visitors and Host Incomes in 2017
A deep data dive on the economic impacts of the sharing economy
Organizations like Airbnb represent innovation in the sharing economy whereby people share their homes, cars, recreation equipment – basically anything that is being used less than its capacity. Clearly the benefit of sharing is to generate incremental income which one would assume is of growing importance with lower wage and salary growth and more retirement in the modern economy. From an economist’s perspective, it’s a wonderful expression of the market responding to fulfill a need – all made possible through online platforms. Over time it can create cultural changes as people enjoy the personal experience of sharing their homes and lives.
Of course, there will be challenges in this world of change.
According to Airbnb, Colorado enjoyed a 68 percent year-over-year growth in Guest Arrivals in 2017. That’s the number of people who stayed with an Airbnb Host regardless of the number of days. Airbnb also reports, “The typical earnings for a host in Colorado was $8,100 last year, and 16 percent of hosts are 60 years or older. Across Colorado, 59 percent of Airbnb hosts are women.”
As shown in the table, Denver has a 27 percent share of Guest Arrivals. The mountain resorts and Boulder have higher Host Incomes per Guest Arrival. There seems to be some connection between income per guest to real estate prices which makes sense. The higher numbers in mountain towns could also reflect longer average lengths of stay. Colorado Springs has a very low Host Income per Guest Arrival which is certainly worth exploring; although it could be a data point error.
Assuming an average tax rate of 9 percent across the state, Airbnb generated approximately $16.5 million in total sales, lodging and marketing taxes throughout the state in addition to incremental income taxes for the State of Colorado.