Apr182014

Airbnb lobbying to pay hotel tax

Another week and another crop of Airbnb stories popping up around the web. Airbnb is a business advocate of the ‘sharing economy’ with an entire business blog highlighting its efforts to grow this sector worldwide while improving its corporate bottom line.

Airbnb even has a public policy blog. The past four articles focus on New York City and San Francisco legislation. There are also articles about other countries and their rental legislation.

Airbnb NY infographic

Airbnb infographic from public policy blog April 17, 2014.

In New York City, Airbnb says it will remit sufficient taxes to pay for 420,000 textbooks in public schools, but first the state must change the law to allow Airbnb to pay hotel taxes. Airbnb is in a public campaign being waged to legitimize its rental business while city governments and hotel associations challenge Airbnb with arguments that landlords are reducing rental property availability, neighbors of Airbnb rental hosts are subject to increased flow of transient guests in their building, and hotel associations are challenging the concept that Airbnb rentals meet the safety standards for hotel lodging.

Airbnb has its own blog section on Safety and Airbnb. Recent initiatives include Host Guarantee (2011) and Verified ID (2013). Airbnb says it will require every rental to have carbon monoxide detectors installed by the end of 2014. Airbnb has a current give away of 10,000 free detectors to U.S. hosts.

airbnb smoke detector

Host Guarantee developed after a San Francisco host had her place severely vandalized by an Airbnb renter in 2011. In response, Airbnb instituted a $50,000 host guarantee in August 2011. The guarantee coverage is currently listed as $1 million dollars for hosts in many countries. 

What countries does the Host Guarantee cover?

Hosts in Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Malaysia, Netherlands, Norway, Puerto Rico, Singapore, South Korea, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, and United States are currently eligible. We are committed to implementing the Host Guarantee in other countries and are actively working to do so.

https://www.airbnb.com/guarantee

I read a comment from a host in Poland wondering why his country is not covered?

Reading the T&C of the Host Guarantee indicates why the Hotel Association of New York City is lobbying against Airbnb being considered a hotel for tax collection purposes.

If you are a Host, you understand and agree that Airbnb does not act as an insurer or as your contracting agent. If a Guest requests a booking of your Accommodation and stays at your Accommodation, any agreement you enter into with such Guest is between you and the Guest and Airbnb is not a party thereto.

https://www.airbnb.com/terms

Airbnb operates in the ‘sharing economy’ as a matchmaker, while stating it is not part of the contract between a host and guest.

The sharing economy has legal hurdles to overcome. Analysts think Airbnb will eventually go for an IPO and the valuation number currently tossed around is $10 billion for Airbnb. The legal hurdles with cities, states and countries stand in the way.

I do not have a personal stake in this race. I am neither for or against Airbnb. The legislative battle is what interests me in this story.

Airbnb is shaking up the hospitality industry.

*****

Here are some news articles about Airbnb in San Francisco and New York.

Sporadic rentals seem OK, but our S.F. homes are no hotel (April 17, 2014)

Airbnb Offers To Pay Hotel Taxes In NY, Hotel Lobby Says ‘No Thanks’ – Ryan Lawler – Techcrunch.com (April 17, 2014)

Airbnb aims to start taxing renters by July 1 – New York Post (April 14, 2014)

Is AirBnB Friend or Foe to Cash-Strapped New Yorkers? New York Observer (March 28, 2014) – good read on the income opportunities for Airbnb hosts.

Airbnb Finds Little Hospitality in New York Market – Wall Street Journal (Oct. 20, 2013)

Hotels girding for a fight against Airbnb – Crains New York (Aug 19, 2013)

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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Comments

  1. Seems pretty clear that Airbnb wants to be taxed because it can handle the cost and compliance burdens given its size, something that would serve as a barrier to entry for newer sites in their market niche. They’re basically lobbying for government protection / corporate welfare.

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