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Front Page » Opinion » Airbnb can produce pluses via more visitors, hotel profits

Airbnb can produce pluses via more visitors, hotel profits

Written by on September 27, 2016

Miami Beach’s battle against Airbnb looks familiar. Didn’t we just fight that war against Uber and Lyft? If so, let’s make the likely outcome as positive for all as possible.

Internet home-sharing firm Airbnb is doing well on Miami Beach, where the main industry, hotels, is simultaneously taking a huge hit from the Zika scourge. Brick-and-mortar hotels naturally don’t want a company built (as its name says) on air taking their guests.

Hoteliers complain it isn’t a level playing field because Airbnb doesn’t pay the taxes or meet regulatory guidelines that hotels do. That’s the argument taxi owners offered against Uber – which didn’t even pay hundreds of thousands of dollars for each medallion, just as Airbnb doesn’t pay multi-millions to build hotels.

But business is in a new age of competition spurred by disruptive technologies.

In the newspaper industry, websites that didn’t pay for licenses or newsprint or printing presses – or reporters and editors – quickly grabbed eyeballs and advertising by profiting from unpaid-for content that newspapers had produced. No level playing field.

When taxi owners’ representatives a few years ago brought us a notebook listing the evils of unfair competition by a thing we’d never even heard of called Uber, taxis still had a monopoly and a single cab’s operating rights sold for hundreds of thousands. Uber doesn’t own a single cab but grabbed a huge share of the industry after taxi operators paid lawyers and lobbyists millions to try to halt its incursion. No level playing field.

Now it’s the hotels. Miami Beach has levied millions in fines for those who illegally rent short term in their homes or apartments, aided by Airbnb. That’s the same pattern as Uber drivers, who drew big-money fines before the county legalized the service. Airbnb, like Uber, is likely to pay those fines in the short run as it goes for a long-term legal victory.

On its website, Airbnb details taxes it pays in Florida, including a 6% transient rental tax for reservations of a half a year or less and local county surtaxes of a half percent to 1.5%, depending on the county, for those short-term rentals.

The company also pays tourist development taxes in 22 counties that the state administers, plus the tourist development taxes in nine counties, not including Miami-Dade, that administer their own.

A tax deal in Miami-Dade could be tougher. Most of the county has 6% bed taxes, including 3% for convention development, 2% for tourist development and 1% for sports, but Bal Harbour and Surfside administer their own and Miami Beach administers its own taxes for tourist development and sports.

That division of tax powers might require settlements in each community, once cities decide that if they can’t lick Airbnb, the company can at least fund economic growth via taxes on the guests it sends here.

Miami-Dade can’t erect a barrier against a web phenomenon that’s sweeping the globe just as Uber did. Airbnb says it has placed more than 60 million guests in more than 34,000 cities in 191 nations and has more than 2 million listings worldwide. Why should we freeze its clients out?

We need an accommodation of this accommodations firm and its smaller competitors. The longer and harder Miami Beach pushes back, the more painful it will be for our tourist industry.

Industry research surely reveals just how much overlap there is between the guests of high-quality Miami Beach hotels and the users of a service that sends visitors to homes and apartments. The vast majority of Miami Beach hotel guests wouldn’t put up with someone’s spare room for a vacation, convention or business meeting. They expect service that no householder is prepared to give.

That, after all, is the hotel experience. Guests want good dining, entertainment, more comfort than they have at home and some veneer – plus a staff well trained to serve with a smile and ability. Very few apartments and homes can offer that – and even fewer to be found via Airbnb. If homes are that good they’re not listed, because no paid guests are wanted.

We all know adventurous folks who’d take a chance with someone’s spare room on a trip through Europe. We also know folks who couldn’t afford to visit nice resorts at hotels’ rack rates. These are good candidates for Airbnb. But they aren’t most of us, or the vast majority of present Miami Beach guests.

What Airbnb clients do represent is people who now don’t visit Miami Beach but could come here via Airbnb sites, pay bed taxes, go to stores and restaurants and entertainment, and add to our economy. They won’t cannibalize the visitor industry but could expand it, leaving more money than the community now gets.

This competition might also encourage hotels to find efficient ways to place “remainder” space – rooms not otherwise booked – at marginally profitable prices at the last minute. On an average night more than 20% of Miami-Dade hotel rooms don’t get used. If web travel sites aren’t getting them booked now, the industry needs to find another way – those unbooked rooms being their best way to compete, or cooperate, with Airbnb.

In the end, Airbnb might build efficiency: unused rooms in homes and apartments can yield revenue while our hotels also generate more cash with their now-unbooked rooms.

In the newspaper industry we sympathize with hotels – we’re also a business with tangible products affected by competitors who operate on air alone. But rather than spending to maintain legal barriers to keep out competitors, our hotels would do well to find ways to either compete or cooperate with the lower end of the industry.

Moving toward 100% hotel occupancy 100% of the time – even with some lower rates – would be a great start.

10 Responses to Airbnb can produce pluses via more visitors, hotel profits

  1. Michael

    September 28, 2016 at 10:03 am

    Yeah, and tax evasion can increase… taxes.
    AirBnB is operating illegally. Period. End of story. No need to glorify it.

  2. DC Copeland

    September 28, 2016 at 11:34 am

    I agree with your assessment of the situation. I used Airbnb years ago in Manhattan. The room was close to all of the action on Broadway. I could walk in off the street. It was just a place to crash and shower and eat if I wanted to. I spent most of my time seeing shows and eating and drinking my way around the city. That’s exactly what would happen here. The smart traveler on a budget won’t be staying at expensive hotels if he or she can help it. They want to use the money they save by enjoying the city through its restaurants, bars, and clubs and, of course, its beaches. If the mayor and Miami Beach commission just took a deep breath and relaxed instead of overreacting to Airbnb, everyone will benefit– including the citizens who live there and want to make some money off of assets they own. Less is more here. Bureaucrats should stay out of it and get with the program.

  3. Jeff

    September 28, 2016 at 12:01 pm

    The statement that AirBnB clients would not come to Miami at regular rates is patently false. Many corporations don’t care where their employees stay; the liability that residences incur all add up to reputational concerns for the destination. This is not the same as Uber or online newspapers.

  4. John

    September 28, 2016 at 7:55 pm

    If Miami Beach pushes Airbnb out, then guests will end up staying in Airbnbs in Wynwood, Downtown, or other areas that accept that many people prefer Airbnb.

    The same goes for Miami Dade County if they prove to be the one county that wants to resist Airbnb. People just visiting for beaches etc. will end up staying in Broward or some place else if they want a place with a kitchen for a week or two with their friends. Hotels would be unaffordable for this length of time especially if a kitchen is required so people would otherwise not go or go somewhere else.

    I agree with the article 100%. Wake up Miami and join the twenty first century. Emulate Silicon Valley and the tremendous innovation happening there instead of clinging to last century’s industries at the cost of our future.

  5. Rene

    September 30, 2016 at 3:05 pm

    Que el gobierno no se meta más con los dueńos de casa que quieran rentar cortos periodos, AIRBNB es futuro, la gente tiene que tener más opciones, los hoteles son muy caros. AIRBNB es mucho mejor porque los anfitriones dan excelente trato, mucho mejor que los hoteleros y más barato. Los dueńos de casa pagan altos impuestos a la propiedad, además cuando rentan con AIRBNB también abonan más impuestos. Adelante el siglo XXI, bienvenidos AIRBNB y la tecnología

  6. Dean

    September 30, 2016 at 9:11 pm

    AirBnB should operate like hotels do. Why should unfair competition be an ‘ok’ thing? It shouldn’t. And no, AiBnB ‘guest’ won’t stay in other AitBnb spots – they will stay in legit hotels and motels instead of feeding AirBnb middleman.

  7. Olimpia

    October 1, 2016 at 10:44 pm

    Airbnb ha creado una industria maravillosa, el de acomodar huespedes al rededor del mundo, para las personas que no pueden pagar costos muy altos de la industria hotelera, nosotros somos hosts de la tercera edad, disfrutamos lo que hacemos y nos dio la oportunidad de sobrevivir después que mi esposo fuera diagnosticado de cancer, pudimos seguir adelante y resolver nuestra situación financiera, y hasemos sentir a nuestros huespedes en casa fuera de casa.
    Gracias Airbnb!!

  8. John Miami Beach

    October 2, 2016 at 3:20 pm

    Cambien las regulaciones a futuro, la realidad es que si compre una propiedad que se renta a 12 meses no quiero tener vecinos cada semana. Si me dicen cuales son esas no compro y una vez que compre no quiero cambios por negocios de algunos vividores. Creen registros de unidades y que paguen los impuestos como hotel sino es una competencia desleal. Muchas cosas que hacer mientras respeten las leyes y los reglamentos

  9. Ernesto

    October 6, 2016 at 2:51 pm

    Parece mentira que en la nación #1 màs grande del planeta existan tales personas con una mente tan egoista llenas de hipocrecía. Airbnb los hosts no son unos vividores; son personas que trabajan como cualquier otra persona humilde pero en este caso utilizan el cerebro creando y al menos son mejor pagados que muchos “trabajos” que la misma ciudad ofrece. De taxes mejor Pregúntele a Donald Trump que el ,estoy seguro les dará unos consejos.
    To those dont agree…This is the new way for other people thar arent u ok so please mind your bussiness.


  10. Rene

    October 8, 2016 at 2:27 pm

    Quien le dijo a este señor John que los hosts no pagan impuesto, Airbnb le cobra los taxes a los huéspedes y luego Airbnb se los paga al gobierno. Si no le gusta ver caras diferentes cada semana que se mude para el campo, si compró casa en la ciudad tiene que ver carros, gente, y todo lo que se ve en una ciudad. Los huéspedes de Airbnb son filtrados por Airbnb y además los hosts vemos sus fotos y perfil de las redes sociales antes de darle la aprobación, este Señor John si supiera como esto funciona preferiría inquilinos de Airbnb y no los inquilinos que cuando viven permanentemente se creen dueños y hacen lo que ni siquiera hace el dueño de la casa, normalmente los inquilinos fijos hacen fiestas y música hasta tarde, reciben visitas semanales , diarias y a cada momento sin control porque no es prohibido , pero si a John no le gusta ver caras diferentes cada semana, los inquilinos permanentes no se le puede prohibir que traigan visitas cada vez que le de la gana , más bien John no será que necesitas tener una casa para hacer lo mismo y ahora sientes envidia o remordimiento? Ve a la iglesia y limpia uno de los 7 pecados capitales : la envidia
    Dios te de sabiduría hermano, deje la amargura y sea feliz .