Illegal Airbnb properties and hosts’ professionalism

Many destinations require Airbnb hosts to obtain permits to legally operate as accommodation providers. However, a significant portion of hosts rent their properties without legally registering their business activities (i.e., illegal suppliers). This study examines the relationship between the likelihood of operating underground and the degree of professionalism among hosts, measured by the number of properties they offer. We analyse a dataset of 3,800 Airbnb listings in Menorca by matching the provided registration numbers with official records from the city council. This allows us to identify listings without a licence and those with cancelled or duplicate licences. We find a U-shaped relationship between the number of properties a host manages and the probability of operating underground. Single-unit hosts are more likely to supply their dwellings illegally than professional hosts with more than twenty units. However, the highest probabilities of illegal activity are found among hosts with four or five listings.