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Airbnb attracts more hosts in Philly area even as hotels expand

More people want to earn extra money sharing rooms, apartments, and homes as part of Airbnb's online-booking network.

Airbnb host Carrie Borgenicht (on top step) gives directions to her guests Isabelle Jeanson (front) and Catherine Bretin, on left. Jeanson and Bretin had just arrived at Borgenicht's S. Phila. home on Nov. 1, 2017. Carrie Borgenicht has been an Airbnb host for nearly five years. She said the income helped her start an urban gardening business.
Airbnb host Carrie Borgenicht (on top step) gives directions to her guests Isabelle Jeanson (front) and Catherine Bretin, on left. Jeanson and Bretin had just arrived at Borgenicht's S. Phila. home on Nov. 1, 2017. Carrie Borgenicht has been an Airbnb host for nearly five years. She said the income helped her start an urban gardening business.Read moreELIZABETH ROBERTSON / Staff Photographer

Carrie Borgenicht is single, lives alone, and wanted to share her home when someone suggested that she look into Airbnb, the online marketplace where people offer rooms, apartments, and houses as short-term rentals.

Nearly five years later, she is booked for an average of 20 to 25 nights a month as an Airbnb host. She charges $65 a night and requires a two-night minimum for one bedroom and bath in her historic rowhouse near Third Street and Washington Avenue in South Philadelphia. Borgenicht figures she earns $12,000 to $15,000 a year, and nets $8,000 to $9,000 after taxes and expenses, such as breakfast for guests.

The extra income gave Borgenicht the confidence to leave her day job three years ago and start an urban gardening business specializing in city courtyards and window boxes.

"It's been a really good experience for me, and it's been interesting and fun," she said. "And I like telling people about Philly, so it's worked."

Airbnb is growing in Philadelphia and other major cities. In the Philadelphia metropolitan area, about 3,000 Airbnb listings are available on any given day, up from 700 at the end of 2014, said Tony Biddle of CBRE Hotels, which provides consulting and research services to the lodging industry.

Airbnb listings account for 14 percent of the guest-room supply in central Philadelphia, he said.

At the same time Airbnb is expanding, so are hotels. Four new hotels with 600 rooms have opened in Center City and University City this year, and three or four more are scheduled to open next year and in 2019, adding a total of 2,350 rooms, Biddle said.

"We are going to have to stay on top of our game to make sure the market stays strong," said Ed Grose, executive director of the Greater Philadelphia Hotel Association.

Is the rise of Airbnb, with more than 3 million listings in 65,000 cities and nearly 200 countries, hurting hotels?

"We are seeing an impact from Airbnb, but we don't know exactly how much," Grose said.

Noted Biddle: "A portion of Airbnb customers represent new lodging demand. They might not have otherwise traveled to Philadelphia if they could not get a very good rate on Airbnb. It remains largely confined within the leisure segment."

Airbnb is expanding in all big U.S. cities, equating to 10.1 percent of the hotel-room supply in Chicago, 24.8 percent in Los Angeles, 22.1 percent in Miami, and 15 percent in Seattle, CBRE said.

"It's fair to say five years ago these numbers were virtually zero in all these cities," Biddle said. "In many cases, Airbnb properties are priced lower than their hotel counterparts, and in a lot of cases, especially for an extended stay, when you have amenities like a full kitchen, that's very attractive."

In the Philadelphia area, Airbnb counts 8,200 "active" rental listings, which include occasional home stays and full-time bed and breakfasts.

"Our definition of 'active' is if someone has booked once in the past year," said Airbnb spokesman Peter Schottenfels.  "CBRE is saying that Airbnb has 14 percent of all the apples in Philadelphia. We're saying we might have a number of apples, but we also have some oranges, lemons, and bananas. People come on and come off the platform all the time."

Jan Freitag, senior vice president at STR, which tracks supply-and-demand data for the global hotel industry, said, "Airbnb is here to stay. They are a competitor for lodging demand, the impact of which is still to be determined.

"The average occupancy of an Airbnb unit is roughly 50 percent — so half the units are empty every night," Freitag said. "Airbnb is trying very hard to collect more corporate travelers, and they now have systems in place — Airbnb for business — where they make units business-ready and target them at business travelers."

With the growth in home-sharing rentals, "there's a lot more competition," said Borgenicht. "I think it's probably affected me. I'm sure I could charge more if there wasn't so much competition. But I haven't lowered my rates so much as I have probably not raised them as I could have otherwise."

Her guests are mostly tourists: international travelers in the summer, more American business travelers in the winter, and college students during school breaks. Occasionally, people stay several weeks or a month, but most stay only a few days.

Last week, Isabelle Jeanson and Catherine Bretin from France spent four nights with Borgenicht during a sightseeing trip that included Washington and New York.

"It's been really interesting for me," Borgenicht said. "I don't get to travel a whole lot, and I've met people from all over the world."