My AirBnB conundrum


Every few weeks another AirBnB story surfaces raising questions about the appeal of the product to various market segments and how it fits in with local regulations. This time around a combination of personal and third party stories has me thinking about the company and the product – AGAIN – and wondering if it really is a good thing and what the long tail looks like as markets shift. I remain very, very skeptical.

https://twitter.com/hunterwalk/status/940080058303094785

I had eight stays in AirBnB properties in 2017 spanning 30ish nights. That’s about 20% of my time away from home this year. With one exception – a cold night in Hamburg where the heat wasn’t working – they were all great stays.

Even the one where I had to help the hosts fix the toilet that wasn’t flushing properly.

My guess is that only two of my stays were what the building owner would consider illegal. And those really are not all that hard to discern. There are usually code words in the listing, like “just say you are friends of the owner,” to make it clear. Some are even more obvious.



And that’s where things get tough for me. The stays I’ve had at what are obviously “hotels” are the better ones. They are often run by professionals who manage multiple properties (or third party services that do the same, for a cut of the revenue). And, generally speaking, they’re really good at their job. It is almost as if renting out accommodations as a business requires specialized skills and knowledge, the sort of thing that a hotelier would excel at.

And, all the while, the AirBnB PR machine keeps churning out the tale that most members manage only one property and most are just using it to make a little extra money with a spare room. That is not my experience at all, at least not among active bookings that are making money. They are the properties that are in demand in densely populated cities and neighborhoods and that are being run as hotels rather than as homes. They are trashing (or contributing to such) the residential real estate market in urban areas.

In New York it is as much about tax revenue as it is about zoning and other challenges. Hotel room taxes are significant and are a significant contribution to the local economy. That sucks for visitors, I suppose. Paying 10% extra just to help fund my trash collection or police or whatever is an expensive proposition. But it is part of the deal for getting a hotel room. And, quite frankly, if someone is running an apartment as a hotel they should pay that tax. As a consumer who uses the service I’d much prefer to pay the appropriate tax than to see regulatory or legal challenges to the operations (like NYC experienced).



Read More: Is AirBnB worth potential jail time?

San Francisco managed to arrange to collect the taxes correctly on behalf of its hosts. Various cities in Europe have done the same. Sometimes a host takes a copy of my passport ID page because as a lodging provider that’s required by local authorities. They may not be formally running a hotel but they are definitely operating a lodging establishment.

I also have to face my hypocrisy with these bookings. I know the stay is against the rules. I do it anyways. I’m a good neighbor, quiet and mostly out of the way. But that’s not the same as not being there at all. I’m part of the problem. In Singapore the penalty (for the property owner) can be SGD$200,000 or jail time. That is a ridiculous risk for a host to take, but they do it anyways.

In the meantime, I’ve got another one booked in Thailand in February. Just like when I was there 18 months ago, it is a perfect location and half the price of the mediocre hotels nearby. And still not legal per Thai law, best I can figure. Oops.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.

14 Comments

  1. In many US cities – San Diego is one of them – the hotel tax is used at least in part to pay for football/baseball/soccer stadiums for millionaire team owners. The public referendums pass because the voters of the city and/or county are told that there would be no additional cost to them. In the meantime, the team owners keep raking in the profits, and the NFL made more than 13 BILLION dollars in 2016. And, by the way, the NFL is registered as a non-profit, so they pay no tax on that income.

  2. On my most recent stay in Bangkok, I was made REALLY uncomfortable by the signage in the Airbnb. There were signs EVERYWHERE, in the lobby, in the elevator, on every floor, warning that this was not a Hotel and if you were not registered the police would be called on you. It made me very uncomfortable.

    I’ve decided to scale back my Airbnb usage to only cities where you really can’t find a hotel anywhere near where you’d want to stay, the prices of hotels are exorbitant (eg TLV), or its a typical vacation rental destination already (eg Mexico).

    I’m not really interested in continuing to support the gray market if I don’t have to.

  3. I can buy unlicensed and illegal things all you want, but at some point it collapses the legal economy. Sure there are taxes on hotel rooms, but staying somewhere that makes housing even more expensive for those that need it isn’t registering your complaint, its actually raising costs in that city.

  4. From a “market” standpoint, we’ve decided that AirBnB is just not worth it unless their are no hotels we’d like nearby, or the cost is *extremely* low compared to a decent hotel. The “who knows if it’s a dump or it’s great” coin flip isn’t worth it to us after a long flight and a late night arrival; we’ve gone back to just booking a hotel for the most part. We’ll give it a try as a test expat run in the future, but in the meantime we’re back in the hotel corporations’ pockets.

  5. I’m surprised that you would choose AirBnB in Bangkok over a hotel – you can get a new 4*/5* hotel for fraction of what you’d pay for a really mediocre old one in the US. I personally don’t get the risks of using AirBnB when traveling, especially abroad and would only seriously consider AirBnB if there were no hotels, hotels were sold out or insanely priced due to event/convention, or if I were traveling in a large group and traveling to a non-urban area (i.e. a mountain retreat).

    Things you get with a hotel:
    -Consistency
    -24/7 help
    -Security (underrated IMO)
    -Amenities (pool, gym, restaurant, lounge, bar)
    -In a foreign country, usually English-speaking staff
    -As a tourist or on business, a place that is usually centrally-located to where you want to go
    -Ease of cancellation
    -Ease of room change
    -Return on the price you pay in form of points

    I find AirBnB is really hostile to guests (i.e. much more pro-host) – cancellation policies are usually very strict.

    1. In this particular case I’m going to a conference. The conference hotel is ~$120/night. The luxury apartment 4 minutes away is <$50. I'm not worried about the language barrier. I had a nice email conversation with the host before booking. And access to the pool/gym is included as well. The cancellation policy is set by the host, not AirBnB. In this case it is fully refundable until a few days prior to arrival. And there is absolutely no way a few hundred points is worth that nightly rate difference.

  6. I’ve had the same feelings Seth describes. I have used Airbnb, usually have been happy with it as a customer and am generally glad it’s in the marketplace. However, I think an important difference between Uber and Airbnb is that Uber is facilitating something that is, fundamentally, generally legal (operating a limousine service using your car) whereas Airbnb is facilitating something that is (well beyond tax issues and so forth) very often fundamentally illegal and/or against condo association or co-op board rules – and in cities, a large percentage of properties are governed by these rules. Of the four Airbnbs in our DC neighborhood where people visiting us during the past year have stayed, three are probably illegal (one has already been shut down by its building’s board). And whereas almost everybody fighting against Uber simply doesn’t want to compete against Uber (i.e., taxi medallion holders), the condo associations and co-op boards really just don’t want neighbors renting out their homes, by the night, to strangers. Of course the hotel industry opponents are just like the taxi medallion holders – that part of the analogy holds. But I don’t know how to get around the fact that in the most desirable locations with lots of density and thus multi-family housing, a lot of Airbnbs are (even from the perspective of people with only a quality-of-life stake, not a financial stake in opposing the service) against the rules and unwelcome in a way that’s not true of Uber.

  7. I have only had reasonably good to excellent results staying in airbnb. Last week I paid $23 a night for a room in a single family home in a perfect location, where hotels are all well over $100. Wonderful host family. And some kinds of stays would be very difficult to arrange apart from this platform (a yacht in a marina in Spain, for example), or prohibitively expensive. In principle I enjoy meeting local people and getting local knowledge on things to see and do. I do understand the concerns; if it’s illegal, I don’t want to be part of that. The concept is still young and evolving. I have also noticed increasing cross listing between airbnb and booking.com, for example. Same room, same location, frequently same price.

  8. I became an airbnb host recently because I needed income upon moving to a new (well, new after 7 yrs away) city. This article makes me feel *slightly* better because I am in a properly zoned area- there’s a Days’ Inn, a Hampton Inn, and a Sheraton on my block- and I only run the one property, which after initial “accept all the peoples to get some reviews” it will basically be only for when I travel, and for the biggest events (it’s across from a convention center). That being said it’s on the edge of the last affordable area near the middle of my city, a neighborhood I really like- I really don’t want to contribute to its gentrification. But it’s going to happen anyway so I might as well preserve a little bit of the flavor? NB: My city made it legal to do airbnb, they take the taxes out for you.

    1. The fact that there are hotels on your block does not mean your property is zoned for such activities. That said, if the city is processing the taxes and you live in a single-family home you’re probably okay.

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