Even as cities like Santa Monica and West Hollywood are placing tough new restrictions on short-term rentals, more and more visitors to the Los Angeles area are choosing to book accommodations through Airbnb. According to the rental website, nearly 1 million guests—948,000 to be exact—stayed with Airbnb hosts in the city of Los Angeles between September 1, 2015 and August 31, 2016.
That number represents an impressive 98 percent increase over the year before, and nearly half of all Airbnb renters in California. San Francisco was the second-most popular destination, with 429,000 homes, bedrooms, tree houses, and basically any other type of living space you can think of, rented during the same time period.
How has that affected the local economy? Not surprisingly, Airbnb paints a rosy picture, estimating that listings in Los Angeles have directly contributed to over $1 billion in economic activity (the average income for hosts using the site was almost $8,000 across California). Of course, the question many hoteliers might ask is how many guests simply chose Airbnb listings over more traditional accommodations.
The hotel and short-term rental industry have been locked in a fierce battle since such sites as Airbnb first appeared on the scene. A study by CBRE Hotels from earlier this year found that hotel prices in areas with more short-term listings were growing at a much slower rate than in other parts of the cities examined in the study.
Of course, that’s not necessarily bad news for visitors looking for a cheap place to spend the night. But city officials in Los Angeles and beyond have also raised questions about the effect of short-term rental sites on local rental markets.
Recent analyses have found that landlords can often earn more money renting out units in the short-term, thus incentivizing them to remove badly-needed apartments and homes from the rental market.
The Los Angeles City Council is working on new regulations for Airbnb and other short-term rentals that could help preserve some of these units for renters.
Meanwhile, the holidays should bring a major surge of guests to the city. According to Airbnb, almost 30,000 guests have booked reservations for December 24 through January 2.