Profits and Losses from the Sharing Economy Mary Talk November 14, 2018 Kashef Majid University of Mary Washington College of Business kmajid@umw.edu A copy of this presentation is available from http:www.kashefmajid.com

https://youtu.be/-XSAqfK_UwY

The Sharing Economy “There are 80 million power drills in America that are used an average of 13 minutes... Does everyone really need their own drill?” (Brian Chesky – Co-Founder of Airbnb)

Size of the sharing economy Estimated at $26 billion dollars in 2014 Since its inception in 2008 Airbnb hosts have earned more than $40 billion dollars through an estimated 300 million bookings worldwide Airbnb hosted over 4 million listings in over 80,000 cities in 2017 By comparison, the Marriott Group, Hilton Hotels Worldwide, and the Intercontinental Hotel Chain had less than two million hotel rooms available worldwide in 2014

Humble Beginnings

The D.C market of Airbnb rentals There were over 20,000 Airbnb listings in DC between 2008 and 2017, some properties are listed for a few months others are listed for a few years At least 21 properties made over $100,000 Entire homes/ apartments were in the highest demand

Properties that earned the most between 2016 - 2017

Issues arising form Airbnb Rentals https://youtu.be/N332Xe3Euc4

Commercial Operators

Airbnb findings Commercial operators price their properties at $8 less than non-commercial (equivalent) properties Commercial operators achieve higher occupancy rates Commercial operators can charge lower prices for higher priced properties Lower priced properties in higher-end areas attract the greatest demand, this puts commercial operators in the best position

Airbnb and Regulation In 2017, the General Assembly passed SB 1578 and added a new section, 15.2-983, to the Code of Virginia, which authorizes localities to adopt an ordinance to establish a short-term residential rental registry requiring the registration of operators offering short-term rentals of spaces in residential properties within the locality. 

University of Mary Washington Thank You/ Questions? Kashef Majid University of Mary Washington College of Business kmajid@umw.edu A copy of this presentation is available from http:www.kashefmajid.com