The Gentrification of Airbnb: Closing Rent Gaps Through the Professionalization of Hosting

Abstract

In this article, we argue that it is analytically productive to think about the professionalization of hosting on Airbnb in terms of (commercial) gentrification. More precisely, we believe that rent gap theory is helpful to advance our understanding of why and how professionalized hosting has become an increasingly salient phenomenon and for centering the active role of Airbnb as a platform operator. We develop the notion of platform-scale rent gaps to explain the economic logic that drives Airbnb to professionalize its hosts and gentrify its platform. We then discuss Airbnb’s professionalization programs and tools, showing how some of its most substantial resources primarily cater to large-scale property managers who, like Airbnb itself, seek to identify and close rent gaps on the platform. This consequently creates the conditions for uneven business development opportunities among hosts, which we illustrate by focusing on how two different types of hosts have sought to professionalize their business in Berlin. Finally, we conclude by speculating on the relationship between the gentrification of the Airbnb platform and urban gentrification.

Tourism‐Led Rentier Capitalism: Extracting Rent and Value from Tourism Property Investment

“…Furthermore, the platform launched "Airbnb Select", a scheme to grant loans and provide assistance to equip listings with hotel-like standards. Such professionalisation goes hand in hand with the emergence of corporate hosts providing a wide range of management services, namely receiving guests, handling maintenance requests, collecting payments, evicting tenants, and cleaning (Bosma and Van Doorn 2022;Cocola-Gant and Gago 2021;Gil and Sequera 2022;Katsinas 2021;Sadowski 2020) and therefore with a decreasing share of peer-to-peer renting. It is also accompanied by the standardisation of the supply which is increasingly designed according to hotel-like standards.…”

Spatio‐Temporal Variation in the Bid–Rent Functions of Long‐Term and Short‐Term Rentals: Evidence from South‐East Queensland, Australia

“…This observation has led to research linking gentrification and Airbnb, in that the conversion of LTRs into STRs prices lower-income residents out of neighbourhoods (Wachsmuth & Weisler 2018). Bosma and van Doorn (2022) claim that this process is accelerated by the algorithmic nature of the platform itself, which encourages rent increases through 'smart pricing', and creates incentives for professional landlords as 'superhosts'. The spectre of higher rents and gentrification have led to both grassroots and government-led campaigns against Airbnb and other platforms, which have materialised in the form of minimum stay requirements, more stringent registration requirements or proposals to ban STRs entirely.…”

“…One observation is that dwellings repurposed as STRs may yield higher rents than long‐term rentals (LTRs), as ‘guests’ paying rent on a shorter time‐horizon will pay a higher rate than tenants whose leases are enumerated in months or years (Shabrina & Morphet 2022). This has led to the proposition that a ‘rent gap’ exists (Smith 1987; Wachsmuth & Weisler 2018) between STR and LTR prices, with potential implications for gentrification – a process that has been observed in diverse contexts around the world (Mermet 2017; Bosma & van Doorn 2022).…”

The (Rent) Gap between simplicity and complexity

“…Beyond that, it has highly granular data that provides insights into what type of listings on the platform could potentially generate higher rents. Such platform-scale rent gaps “exist on an analytical level only accessible to and actionable by Airbnb, and [their] identification and closure is vital for ensuring the continued growth of the company's revenues, profitability, and financial value” (Bosma and van Doorn, 2022: 6). We argued that the case of Airbnb showed that rent gaps can be exploited by others than landlords who own physical land – we found the concept sufficiently flexible to help understand how such gaps may also shape transformations of digital space.…”