A hotel industry study is claiming that online home rental site Airbnb is running illegal properties.
On Wednesday, Jan. 20, the American Hotel & Lodging Association or AH&LA released a study which alleges that many of Airbnb's hosts are illegally doing their bookings through the site, reported Travel Weekly. The association is hoping that there would be stricter laws regarding home rental after this revelation.
AH&LA funded the analysis bookings of Airbnb conducted by the Penn State University's School of Hospitality Management. Interestingly, this certain trade group is a direct competition of the popular home rental site, said Fortune.
Based on the study, around 40 percent of Airbnb's profit in the country's 12 biggest cities comes from homeowners who list no less than two units. The funded research also revealed that almost 30 percent of profits comes from "full time hosts" who have their place rented out no less than 360 days in every year.
The data used by Penn State in the study was collected from Airdna Company, which gathers data on vacation rental investors and tycoons. The hosts in the 12 biggest U.S. cities reportedly earned a cumulative amount of $1.3 billion in 13 months ending in September 2015.
AH&LA President Katherine Lugar said that these vacation rentals are essentially operating like illegal hotels. If this practice continues, the legitimate hotels will be at a disadvantage especially because they are operating with utmost compliance to the law at all times, she stated.
Lugar added that many of the hosts described by the study are not paying taxes and are even able to dodge health and safety standards by using Airbnb as their platform.
On the other hand, the study was released following the recent survey that revealed Airbnb as the fastest-growing online travel site.
Nick Papas, the Airbnb spokesperson, said, "The Penn State study shows that the hotel industry gets what it pays for, which in this case is a specious study intended to mislead and manipulate."
Papas reiterated that the travel site is succeeding mainly because their hosts, mostly middle-class citizens who wanted to have an alternative income, provide guests with the most reliable and transformative vacation experiences.