Running an Airbnb in L.A. has never been more profitable. As the city tries to crack down on illegal listings, and advocacy groups complain about the company’s effect on L.A.’s housing crisis, hosts are charging higher rates than ever while raking in bigger and bigger payouts. But don’t expect them to talk about it. Since 2020, revenues for hosts have steadily risen far beyond pre-pandemic levels. The average revenue climbed to $17,654 in 2022, up more than $4,000 year-over-year, and the numbers are at a similar pace for 2023, according to data from short-term rental analytics company AllTheRooms.
In total, L.A. hosts earned a combined $375 million last year, a spokesperson for Airbnb said. A few factors contribute to the rise. For one, daily rates for Airbnb rentals have spiked over the last four years, swelling from $152 in 2019 to $244 in 2023. It’s a trend that’s happening across the short-term rental industry, as hotel and VRBO rates have steadily risen since the COVID-19 pandemic as well. Basic supply and demand is another factor. Save for a drop during the first few months of the pandemic, Airbnb occupancy rates have largely stayed consistent, with the average rental occupied more than 40% of the time. But the amount of listings has dropped dramatically.
In August 2019, there were 16,973 Airbnb listings in L.A. Currently, there are 7,360. Supply is down for now, but advocates worry that if revenues continue to rise, more homeowners will convert properties into Airbnbs. Much of the drop was due to the pandemic, but the supply hasn’t risen since 2020 partly due to the city’s enforcement of its Home-Sharing Ordinance, a law that went into effect in 2019 that limits Angelenos to hosting only short-term rentals in their primary residence — homes where they can prove they live at least six months per year.
L.A. and Airbnb have worked in tandem over the years to enforce the law, launching a system in 2020 that streamlines the process of identifying and taking down illegal short-term rental listings. It has been effective; the number of listings for short-term rental units across all home-sharing sites has dropped more than 70% over the last four years, going from roughly 36,600 in November 2019 to just under 10,000 in June 2023, according to the city planning department.
Had no idea the aftermath of cracking down on Airbnb like the NYC story is the people who survive crackdown get to rake in huge amounts of money.
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