Reykjavík world's 14th most expensive city, slightly more affordable than New York
At the same time as the growth in the number of overnight hotel stays is leveled off, stays at Airbnbs has continued to grow. According to analysis by economists at Landsbankinn bank more than 40% of foreign visitors in Reykjavík stay at Airbnbs, far more than previously believed.
The report shows that without the increase in Airbnbs Reykjavík hotels would not have been able to handle the growing numbers of foreign visitors to Reykjavík.
Equal numbers at Airbnbs and hotels
The analysis by Landsbankinn suggests that previous attempts at estimating the number of overnight stays at Airbnb's have undersetimated the number by as much as 50%. Statistics Iceland had previously put the figure of overnight stays at Airbnb's and other similar forms of apartment sharing and unregistered guesthouses or tourist rentals at 670,000 in 2016. Landsbankinn estimates that this figure is at least 1,100,000, and as high as 1,400,000 if the entire Metropolitan area is included.
The report also argues that a significant portion of the reveneue from stays at Airbnbs is never reported to the tax authorities. It is unclear, however, whether Airbnb, which collected as much as 900 million ISK (8.4 million USD/7.1 million EUR) in commissions in 2016, pays any taxes in Iceland.
Hotels booked to capacity, resulting in growth at Airbnbs
The Landsbankinn report argues that while the increase in overnight stays at hotels has been slowing or leveling off, the number of overnight stays in Airbnbs has continued to grow. Landsbankinn estimates that the number grew by 152% in 2016, and that the growth during the first eight months of 2017 was 43%, compared to the first eight months of 2016.
Landsbankinn explains that the reason is that hotels in Reykjavík are have been booked to capacity, and therefore very little room for increase. Foreign visitors have therefore increasingly turned to Airbnbs, while the increase in stays at hotels has leveled off.
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