Airbnb growing in SA
CAPE TOWN HOTTER THAN JOBURG
Short-term rental service Airbnb is gaining popularity in South Africa on the back of healthy tourist inflows, with Cape Town the most popular destination for would-be Airbnb hosts.
This is according to figures compiled by Airbnb data collectors and analyst AirDNA.
The data shows that in Cape Town Airbnb listings increased by 92% between August 2015 and August 2016, with 5 454 “entire properties” available. By October the figure had increased to 10 715 properties available – a 100% jump in 14 months.
This excludes other categories of accommodation available, such as single rooms within a house.
The positive upward trend correlates to an increase in demand.
AirDNA CEO Scott Shatford said the figures could be affected and influenced by a number of factors. These include the knowledge/popularity of Airbnb in the area, popularity of the area with tourists, changes in regulation, city marketing campaign successes, the success of Airbnb marketing campaigns or simply the house prices or cost and availability of hotels.
The figures for Cape Town are exponentially high compared with Johannesburg.
However, supply and demand are two different things and at this stage supply far outstrips demand, in both Johannesburg and Cape Town.
In Johannesburg, however, the demand for an “entire place” is lower compared to Cape Town. Of the 436 available listings in August 2015, only 160 were booked; but fast forward to October this year and of the 2 071 available listings for an entire place, 1 054 are booked.
The City of Joburg is, however, looking at ways to boost Airbnbs through technology and by investing more into smaller communities and small tourism entrepreneurs.
Statistics from Airbnb itself show that Johannesburg welcomed 51 500 guests from September last year to September 2017, injecting R197 million into the economy. Most hosts earn an average of R14 900 a year.
“These budding entrepreneurs springing up in markets where Airbnb is most popular are often employing teams of people, encouraging tourism to underdeveloped areas and boosting the economy,” said Shatford.
Investing in Airbnb seems a good idea as the figures indicate, but finding the right location, considering associated costs and regulations are key. In comparison to the US, South Africa’s market is still growing, and for those willing to invest in a property for an Airbnb, research must be conducted, because of the various listings that are available.
Shatford said regulation and enforcement of short-term rentals around the world has threatened the growth of Airbnb.
“Each city has taken its own approach towards Airbnb regulation – some have decided to fine hosts, others have placed caps on how many days hosts can rent out their homes – to varying effect.”
In South Africa, Airbnbs are located principally in the Johannesburg and Cape Town metros, while Ethekwini makes small appearances.
This is according to AirDNA Market Minder, an interactive website which allows potential investors the opportunity to conduct their own research based on AirDNA’s findings.