Rural Airbnb becoming more popular in Arkansas, hosts earned $1.3 million last year

Airbnb stays in less-populated areas of the state outpaced urban markets last year, according to a report released June 27 by Airbnb.

About 350 active rural Arkansas hosts took in $1.3 million, one of 10 states where Airbnb use grew faster in rural areas than it did in cities, according to the report. In fact, it showed the third-highest year-over-year growth in that realm, with a 267% increase in guest arrivals to rural Airbnb listings, totaling 12,000 in 2016. The company said its designation of rural and urban areas is based on the 2010 U.S. Census.

Rural hosts in Arkansas took in an average of $3,900 last year, and rural properties now make up 40% of the state’s Airbnb listings. In a press release from Airbnb, the company wrote: “While regions known for their resort areas and national parks, such as the Mountain West, Northeast and West Virginia, have the highest percentages of hosts in rural areas, the Midwest and South are seeing the fastest growth.”

Overall in the U.S., rural host income was $494 million during the 2016 fiscal year, which ended Feb. 1. The median annual earnings for a rural host was $6,776, while urban hosts earned a median of $6,674, according to the company.

The report shows that since 2012 active Airbnb hosts have increased in U.S. rural areas by 1,800%. Nearly one in five listings are in rural areas.

Women make up more than 62% of rural Airbnb hosts and more than 56% of overall hosts. Also, hosts in sparsely populated areas are, on average, older than city hosts, according to the report. The average age of Airbnb rural hosts is 48, while the average age hosts in more densely populated areas is 42. In Arkansas, the average age of rural hosts is 51, according to the report.

Senior hosts overall, and particularly senior women, are the fastest-growing host demographic on the Airbnb platform, according to Airbnb.

While Arkansas was one of nine states that showed at least a 200% increase in its rural guest arrivals for 2016, 41 states saw at least 100% year-over-year growth and each state in the U.S. saw at least 60% growth, according to Airbnb.

ROOM FOR EVERYONE?
Reflecting on Airbnb and the data the company shared, Arkansas Hospitality Association Executive Director Montine McNulty said there’s room in the hospitality industry for the tech-driven, home-sharing service alongside traditional hotels.

“I think there’s going to have to be. It’s here to stay,” she said.

For its part, the hotel industry is making changes in order to compete with Airbnb. For example, hotel chains like Wyndham Hotels & Resorts now offer more private property rentals as alternatives to hotel rooms, for guests looking for “a different experience,” McNulty said, who draws a line between what the hotels offer and home-sharing services.

“They’re (the hotels are) paying taxes and doing all the things that you need to do. That’s our only grief about Airbnb and any third-party,” she said. “The tax issue is a big issue, also the fire and safety and things like that — that other businesses have to comply with and get licenses for.”

Airbnb agreed earlier this year to begin collecting the 6.5% Arkansas Gross Receipts Tax, the 2% state tourism tax and local sales and use taxes from its hosts, and it agreed to begin on June 1 collecting and remitting local hospitality taxes in the city of Hot Springs. No other tax deals between cities in Arkansas and Airbnb have been announced.

As to Airbnb’s obligation to meet codes and other safety and legal measures upheld by hotels, Airbnb spokesperson Laura Rillos told Talk Business & Politics in February: “We ask all of our hosts to understand and comply with local laws and regulations when they sign up for Airbnb.” She added, “The vast majority of our hosts in Arkansas are good neighbors who share their homes occasionally to help make ends meet. The typical listing is booked just 25 days per year and the typical host earns $3,800 a year, which makes it possible for many to pay the bills.”

McNulty also pointed to the potential for scams and possible problems with neighbors who might not welcome having unpredictable conditions and a revolving door of “strangers” in residential neighborhoods.

“I think it’s just something we have to keep on talking about. The public likes it,” McNulty said, referring to Airbnb. “I think we just keep working on it.”