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Rental laws limit Airbnb's rapid growth

Geoff Riley

3rd January 2017

Here is a really good contextual example of how regulatory interventions affect revenues, profits and the rate of growth of a business.

Rules limiting home rentals to 90 nights per year are to be enforced by AirBNB (previously, they left it up to the home-owner). This is expected to cut forecast revenue by more than £300m a year.

The hotel industry claims that AirBNB is gifted a competitive advantage because homeowners who rent out rooms can earn up to £7,500 tax-free whereas hotels are subject to value added tax.

You will find more statistics at Statista

Airbnb is a privately owned accommodation rental website which enables hosts to rent out their properties or rooms to guests who use the website to find somewhere to stay.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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