Growing the Economy, Helping Families Pay the Bills Analysis of Economic Impacts 2014

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Growing the Economy, Helping Families Pay the Bills Analysis of Economic Impacts 2014 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 IN NEIGHBORHOODS IS IN THE OUTER BOROUGHS OUTSIDE OF MAJOR NEIGHBORHOOD 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% 55% 50% 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| 9 MAKING 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 22% ABOVE 29% 72% MIDDLE-INCOME LOW-INCOME OF HOSTS SAY THAT AIRBNB HAS HELPED THEM STAY IN THEIR HOMES 29% MIDDLE 19% INCOME MODERATE 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| 10 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. 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. Source:HR&A Advisors,NYC & Co. Inc. press releases, 2014 and 2015. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 12 Airbnb 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| 13 Airbnb 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| 14 Airbnb 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| 15 Airbnb 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 ACCOMMODATION SPENDING $600 ACCOMMODATION SPENDING $1,060 DAYTIME SPENDING $770 DAYTIME SPENDING HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 16 Airbnb accommodates many international guests, who stay longer and spend more than domestic visitors. Airbnb visitors Overnight NYC visitors 17% INTERNATIONAL 40% DOMESTIC 60% 83% INTERNATIONAL DOMESTIC HR&A Advisors, Inc. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 17 By capturing a different visitor segment, Airbnb likely attracts substantial visits and spending that would not occur otherwise. New visitorsNew 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| 18 Airbnb 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 $160 despite 240 new hotels opening $142 $145 $144 between 2006-2014. $126 $132 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| 19 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. 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 ProjectionsHR&A Advisors, by Age/Sex Inc. & Borough, 2010-2040, 2013. AIRBNB: GROWING THE ECONOMY THROUGH VISITOR SPENDING| 21 Most 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| 22 Airbnb 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.
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