AIRBNB AS AN INCOME SUBSTITUTION IN SLOVAKIA

InGRID WINTER SCHOOL FROM UBER TO AMAZON MECHANICAL TURK: NONTRADITIONAL

LABOUR MARKETS DRIVEN BY TECHNOLOGICAL ORGANISATIONAL CHANGE

SILVIA HUDÁČKOVÁ

Introduction • More than 307 000 people are actively searching

employment in Slovakia.• Only 803 people in Slovakia rent through Airbnb• In 2014, 90,4% of Slovak households owned the

property they lived in.• Most Slovak households are able to use their real

estate as asset. Renting a room through Airbnb could help households to improve their income, e.g. during times of unemployment.

• + wide regional disparities in income

Research questions

• How many nights of renting a whole piece of real estate/single room/shared room is needed for a person with the median income during a period of unemployment to earn enough to maintain their standard of living?

• In how many days is it possible to substitute the median income with Airbnb altogether in each of 8 regions with each type of rentals – whole piece of real estate/single room/shared room?

Methods

In order to compute days needed to substitute the income gap and median income in each region• I need to obtain:

– median income in each region – social benefits from median income during unemployment for

each region– compute the income gap – Airbnb terms and conditions/fees– Data from Airbnb

• price per day and the type of rented place (whole piece of real estatet/single room/shared room) for each region

• compute average for each region

– average price/day of house or apartment/room/shared room in each region.

Data 

Median monthly

wage

Monthly welfare benefits during unemployment assuming a previous job with the median income (first 6

months of unemployment)

Gap between previous income while employed

and social benefits (EUR)

Bratislava region 898 442.8 455.2Trnava region 715 352.7 362.3Trenčín region 684 337.4 346.6Nitra region 655 323.1 331.9Žilina region 698 344.3 353.7Banská Bystrica region 676 333.4 342.6Prešov region 617 304.3 312.7Košice region 719 354.6 364.4Slovak republic 718 375.8 342.2

Source : Statistical office of the Slovak republic 2013, author.

Table 2 Median wage in Slovak regions, social benefits and gap between median income and social benefits (2013, in EU)

Data

Source: AirbnB, author

Average price of whole place in each region

Price per day (EUR)

Average price minus 3 % Airbnb fee

Number of cases

Bratislava 62,64 60,76 231

Trnava 92,85 90,06 26

Zilina 80,25 77,84 118

Nitra 45,17 43,81 18

Kosice 62,42 60,55 33

Presov 70,51 68,39 96

Banska Bystrica 64,83 62,89 41

Trencin 50,2 48,69 15

Slovakia 68,18 66,13 578

Table 3A Average price of renting of all types of real estate in each region through Airbnb

Average prices range from 35,77 EUR in Nitra to 72,21 EUR in Trnava.

• Airbnb charges the host by 3% host service fee according to its terms and conditions that needs to be deduced from the rental price.

Data

Average price of whole place in each region

Price per day (EUR)

Average price minus 3 % Airbnb

fee

Number of cases

Bratislava 62,64 60,76 231

Trnava 92,85 90,06 26

Zilina 80,25 77,84 118

Nitra 45,17 43,81 18

Kosice 62,42 60,55 33

Presov 70,51 68,39 96

Banska Bystrica 64,83 62,89 41

Trencin 50,2 48,69 15

Slovakia 68,18 66,13 578

Source: Airbnb, author.

Table 3B Average price of renting a whole place in each region through Airbnb

We can rent a place in Trenčín almost two times cheaper than in Trnava.

Data

Average price of single room in each region

Price per day (EUR)

Average price minus 3 % Airbnb

fee

Number of cases

Bratislava 28,91 28,04 64

Trnava 30,2 29,29 10

Zilina 38,47 37,32 34

Nitra 23,92 23,20 12

Kosice 40,33 39,12 15

Presov 39,42 38,24 43

Banska Bystrica 25,42 24,66 25

Trencin 20 19,40 5

Slovakia 32,64 31,66 208Source: Airbnb, author.

Table 3C Average price of renting a single room in each region through Airbnb

Prices regionally vary from 20 EUR to 40,33 EUR.

ResultsTable 4 Days needed to substitute the unemployment benefits to full median wage by renting. A. whole place, B. single room

4A 4B

Source: Airbnb, author.

Results

Income gap relatively easy to substitute• 4.02 to 7.58 days of renting a whole place

in all regions• Still realistic - 8.18 – 17.87 days of renting

a single room

ResultsTable 5 Days needed to substitute full median wage by renting. A whole place, B. single room.

Source: Aibnb, author

5A 5B

Results

• On average, it takes 10.84 days to substitute the median Slovak income, with the regional range of 7.94-14.95 days.

• To substitute the median income with a single rented room is more difficult- 22.68 days (Prešov, Košice, Žilina), and seems too difficult in Bratislava and Trenčín (more than 30 days).

Conclusions

• Airbnb brings a great opportunity for income security to Slovak home owners.

• Relatively easy for a host to rent a place for 4.02 - 7.58 days in all regions to earn the wage gap caused by unemployment

• 7.94-14.95 days to earn the median income by renting the whole house or apartment (Prešov, Trnava, Žilina- on average 9 days or less)

Limitations and discussion

• Only offer side of Airbnb examined.

• Returns depend on other variables, too, such as competition on

the market, demand in each region or capability of the host to

advertise well, as well as their ability to leave home for some time

• How many hosts in Slovakia make renting a piece of real estate

through Airbnb their primary source of income.

• Slovaks do not exploit this opportunity on a large scale. A brief

look at neighboring Czech Republic that has twice the number of

inhabitants shows a very different scale of Airbnb business

• Why Airbnb in Czech Republic is thriving much more than it does

in Slovakia?

Thank you for your attention!

Silvia Hudáčková