An equal number of tourists in the Reykjavík capital area may be staying in homestays such as Airbnb as in hotels, RÚV reports. The estimate comes from a report published today by the Economic Research Department of Landsbankinn bank.
Earnings through Airbnb accommodation and similar services totalled ISK 6 billion (US 55.6 million/EUR 47.2 million) last year. Of that amount, ISK 900 million (US 8.3 million/EUR 7.1 million) will go directly to Airbnb. It is unclear whether the company pays taxes on these earnings in Iceland.
The report figures are based on data from Airdna, which collects information from Airbnb’s website. They indicate that Airbnb has about a 40 percent share in tourist accommodation in Reykjavík. Home-based accommodation as a whole could therefore be claiming up 50 percent of the market.
Statistics Iceland estimates that almost 670,000 overnight stays were unregistered last year, but the Economic Research division of Landsbankinn estimates this number to be far higher: over 1.1 million in Reykjavík and 1.4 in the entire capital area. There are few indications that taxes on these earnings are being paid. The report states that Airbnb has virtually free reign of the market and points to the government’s responsibility to level the playing field between hotels and homestays.
Though it is difficult to estimate the number of homestays outside the capital area, there are strong indications that the situation is similar throughout Southwest Iceland.
The analysis indicates that the accommodation market is at a turning point in Iceland. The market has been strained by the rapid growth in the number of tourists and certainly would not have been able to accommodate them through hotels alone. Homestays have likely had a large impact on expansion in the housing market and rising housing costs. It is therefore necessary to invest in hotel accommodation and establish a regulatory framework for homestays in order to prepare for continued growth.