Airbnb becomes profitable for the first time

The startup hit the milestone in the second half of last year
January 27, 2017 08:45AM

Airbnb founders Joe Gebbia, Nathan Blecharczyk and Brian Chesky (inset: John Oates)

From the New York website: Despite a concerted effort from hotel lobbyists, affordable housing advocates and governments around the world to shut it down, Airbnb just started to turn a profit.

The short-term rental startup became profitable for the first time in the second half of 2016, Bloomberg reported, citing sources close to the company. Airbnb expects to remain profitable in 2017 before interest, taxes and amortization, according to the publication.

The company takes a commission of between 6 percent and 12 percent from guest fees, and charges hosts a small fee. It has no expenses for cleaning and maintaining properties, and the company’s revenue increased more than 80 percent last year. The company still has nearly all of the $3.1 billion in funding it raised and it is looking for make investments and acquisitions, Bloomberg sources said.

In South Florida, Airbnb has struggled to reach agreements with local governments. The company announced earlier this month that it would start collecting resort tax in Surfside, marking the first municipality to do so.

Meanwhile, the city of Miami Beach has tightened regulations in recent months, increasing fines and protocol for short-term renters. Short-term rentals of less than six months and one day are banned in all single-family home districts in the city, and fines were upped to $20,000 on first offense. In apartments and condos where short-term rentals are not allowed, fines were increased to $1,000 on first offense, then $5,000, $7,500 and $10,000.

In New York City and in other parts of the country, affordable housing advocates have argued Airbnb drives up rents. Analysis from The Real Deal in 2015 found the startup pushed up rents as much as $69 per month in New York neighborhoods such as Williamsburg and Greenpoint. [Bloomberg] – Miriam Hall