Airbnb supply in Western Australia

Little is known about the size, the dynamics and the characteristics of Airbnb in Western Australia (WA). To address this knowledge gap, this section explores the supply characteristics of Airbnb-delivered offerings based on the monitoring of Airbnb’s development patterns for eleven months over the period May 2016 until March 2017.

The analysis of the supply is based on a partnership with “Inside Airbnb”, which shared their estimates about aggregate data on Airbnb activity for Western Australia.

Data source: Inside Airbnb, 2017

8'133

Number of Airbnb listings (March 2017)

4.1%

Monthly growth in listings (May 2016 – March 2017)

81.7%

Share of hosts with single listings (March 2017)

4'774'071

Combined estimated monthly income of all hosts (AUD, March 2017)

SUPPLY MAPS

Two principal hot spots of WA Airbnb listings can be identified. The first hotspot covers the areas on both sides of the Swan and Canning rivers as well as some parts of the metropolitan coast in Perth. The second hotspot is located in the south west corner of WA in the wider Margaret River Region. In October 2016, the geographical areas (in accordance with SA2 classifications) with the highest number of Airbnb listings is the City of Perth (588 listings), followed by Fremantle and Rottnest (311 listings) and Margaret River (295 listings). Other areas with relatively high numbers of Airbnb listings are the Busselton region, South Fremantle, Scarborough, Subiaco, Busselton, Cottesloe and South Perth.

In comparison, the northern regions of WA have relatively few Airbnb listings. Regarding the spatial distribution of rates per night, the highest average prices are achieved in Derby/West Kimberleys (Australia’s North West region), directly along the metropolitan coast in Perth (Cottesloe to City Beach), close to Mandurah and also along almost the entire coastline of the Australia’s South West region from Geographe Bay and Margaret River to Albany and even further to Esperance into the coastal areas of Australia’s Gold Outback Region. It needs to be noted that the listing of private rooms and shared rooms might be proportionally higher in urban areas might therefore impact on overall average rates. The territorial distribution of host income indicates that it tends to be highest in the central suburbs of Perth on both sides of the Swan River as well as in the southwest corner of the state and along its western coastline.

Number of Airbnb hosts, cumulative

Cumulated, since 2008 more than 7,700 different WA hosts have been at least temporally active on Airbnb. However, this does not necessarily mean that all of them are still active today. Up to January 2011, slightly more than 40 WA hosts in total had Airbnb listings, in January 2014 this number had risen to more than 1,000 hosts and by January 2015 more than 2,000 hosts listed properties on the Airbnb platform. Thus, the number of (cumulated) hosts grew by 90% to 100% annually between the years 2013 and 2016. In comparison, growth during 2016 in the order of 50% appears to be relatively contained albeit still impressive.

Number of Airbnb hosts

In March 2017, a total of 8,133 listings on the Airbnb platform (“accommodation offers”) were recorded for WA. This is an increase of 1.6% over the previous month and an increase of 50.0% since May 2016, when 5,425 listings were recorded. The current almost 8,000 listings account for about one quarter of WA’s total room capacity (TCWA 2016b).

These listings recorded as of March 2017 were offered by 5,761 WA hosts. Over the previous month, the number of hosts increased by 2.7% and in comparison with May 2016, a growth of 47.5% can be noted, which is slightly below the increase in listings over the same period.

Number of Airbnb listings per host

By dividing the available listings by the number of hosts, it is possible to generate an indicator that might be helpful to understand the degree of “professionalization” of Airbnb supply.In all considered months, the share of WA hosts that offer just one accommodation on the Airbnb platform remains relatively contained, in comparison to other places around the World (see Inside Airbnb, 2017). For instance, in March 2017, 81.7% of all WA Airbnb hosts had only single listings and thus followed the one host-one listing principle. Only 34 WA hosts (0.6%) had more than 10 listings on the Airbnb platform.There has been relatively little change in these percentages over the observed time period.

Room type of Airbnb listings

Regarding the room type, in March 2017, 61% of all listed and available WA accommodations on the Airbnb platform were entire homes or entire apartments. The share of entire homes and apartments has increased since May 2016, when 55.9% had been of this type. Private rooms within a house or apartment were relatively less commonly offered in March 2017; they accounted for 38% of all listings. Listings offering a shared room (i.e. a bed within a room that is also used by others) were rare, representing only 1% of all WA Airbnb listings.

Property type of Airbnb listings

Regarding the type of property listed on the Airbnb website, in March 2017, about half of all listings were stand-alone houses (or were rooms or beds located in houses). About one quarter were apartments, or beds located in apartments, and thus part of multiple dwellings. In March 2017, there were also 579 WA Bed and Breakfasts offerings on the Airbnb platform (7%). Villas and townhouses accounted for a smaller but slightly increasing share.

Prices of Airbnb listings

Nightly rates of WA Airbnb listings need to be differentiated by room type. In March 2017, entire homes and apartments are rented out for a median rate of AUD 150 per night. Private room rates amount to AUD 65 and shared room rates to AUD 35 per night. The average across all types of Airbnb accommodations is AUD 120. Over the analysed months, prices of entire homes and apartments remained relatively stable, with upper price limits increasing. A comparison with average room prices in traditional WA accommodations (TCWA 2016b; TWA 2016a,b) indicates that prices of Airbnb accommodations might be less different than sometimes assumed.

Estimated monthly income of Airbnb hosts per listing

Based on daily rates and estimated occupancies, it is possible to estimate the average monthly income of Airbnb hosts in WA per posted listing. Across all observed months, average WA Airbnb income per listing amounted to AUD 626. If only the category of entire homes and entire apartments was considered, the average monthly income per listing was AUD 910; for private rooms income was about AUD 244.The total income per month across all WA hosts exceeds AUD 4.5 Million.

Estimated occupancy rate of Airbnb listings

Occupancy rates of Airbnb listings can be interpreted as a further indicator of “professionalization” of Airbnb activities. To estimate occupancy rates, Inside Airbnb’s “San Francisco model” has been used (see Inside Airbnb, 2017). The average length of stay for Airbnb users in WA has been set at 4.1 nights for the purpose of this modeling (Source: Tourism WA). The room category of entire homes or apartments achieves the highest occupancy rates among all Airbnb room categories. For WA’s listed entire homes or apartments, with the only exception of January 2017 (23%), estimated occupancy rates remained below or equal to 21% between April 2016 and February 2017. These properties are occupied an average of about 70 days per year. This is much lower than the overall WA average occupancy rate for tourism accommodations.

Concluding remarks on the analysis of Airbnb supply

Supply data indicates that with more than 8,100 listings and more than 5,800 hosts and annual growth rates between 50% and 100%, Airbnb is a noticeable reality in Western Australia. It is distributed across the entire state, with hotspots in the metropolitan area of Perth and Fremantle (especially along the rivers and the metropolitan coastline) and the South West of WA, in particular the areas close to Margaret River and Busselton. Regarding the type of accommodations, the renting out of entire homes and apartments dominates, with houses being clearly more common than apartments. Airbnb accommodation supply in WA seems to remain mostly within the occasional realm, as more than 80% are single listings (“one listing per host”) and occupancy rates remain at or below 20% (with a maximum observed monthly average of 23%), thus not extending 75 days of occupancy per year on average. Please change last two sentences into: “Average prices of Airbnb listings are sizable and allow Airbnb hosts to earn a monthly income of about AUD 626 (per listing) across all categories and areas. Thus, the combined total income per month of all WA hosts exceeds AUD 4.5 Million.