The Innkeeping Blog

Nearly three years ago, I first noticed AirBnB.com and questioned many professional innkeepers about the site.  Did they feel threatened by it?  Did they feel we should expose them for the obvious issues of supporting and promoting businesses that did not pay taxes and that had no concern for safety?  I sent an email to the owners, questioning them on some of this, and of course never received a reply.  Plus, I was ticked off that they co-opted our industry’s brand in their name – “BnB”.

Since then, the site has skyrocketed to internet fame, rounding up major funding and moving on the fast path to IPO (I suppose the brass ring for most internet start-ups).  All the while, I’m wondering when…just when will something terrible happen at one of these apartments that are advertised on the site?  When will someone question the sustainability of a web site that supports illegal businesses?  When will someone cry foul on the tax evasion?  Many cities have rules against property owners renting out rooms by the night or week without being either a licensed hotel or B&B of some kind.   Looking back, I suppose I should have cried foul a lot louder and a lot earlier.

I have been talking about AirBnB at meetings of innkeepers all across the country for two years.  My reference to them had to do with how ridiculously easy it now is for anyone to rent out a room in their pad to travelers, and we should pay attention to them as a new competitor.  Many innkeepers would dismiss it and tell me that this really isn’t our competition; travelers looking to stay in someone’s apartment are not interested in staying in a bonafide, professionally-run B&B.  I will concede that the typical AirBnB customer is not likely a perfect demographic match of the typical B&B customer.  But, I have also told innkeepers that they need to do a better job to capture the Gen X and Y generations, or they will bypass us for something like AirBnB.  If you go to their web site, you’ll see some pretty darn attractive places.  Very seductive, although I wonder if they only showcase the nicest of the nicest properties on their homepage.  Are many of the rest average apartments or worse?

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Anyone paying attention to the travel industry these days knows about the rise and success of the vacation rental as a popular lodging option.  Sites like VRBO, HomeAway, FlipKey and others have skyrockted in popularity.  Many cities around the world are concerned with the increased use of houses, apartments, and condos as vacation rentals, possibly altering the culture of buildings and neighborhoods.  Everyone in our industry knows that HomeAway bought BedandBreakfast.com last year, so it brought the vacation rental question into the forefront for our industry.  But how are innkeepers supposed to see the vacation rental market?  Friend or foe?  Of course, it’s not so black and white.

Activities undertaken by the vacation rental industry and its major players may end up benefiting the B&B industry.  For two years now, HomeAway has run commercials during the Super Bowl promoting the hotel alternative.  Since B&Bs compete with hotels (and we do, for those who say we don’t compete with hotels), I like this advertising.  It gets people thinking about alternatives to what can be the “cookie-cutter” experience.  HomeAway received a big infusion of capital from Google Ventures not long ago, and they recently filed to become a publicly-traded company.  The escalating scale and scope of this company will hopefully mean more propaganda to get travelers moving in the direction away from hotels.

Popular vacation rental web sites also provide another distribution channel for innkeepers to market their rooms, cottages, or cabins.  Not all rental opportunities on these web sites are condos and entire houses – some property owners rent rooms as well.  Many innkeepers have months during which occupancy drops to single digits.  Vacation rental web sites may be a great place to experiment with renting the entire B&B out to groups for days or weeks at a time.  I know several innkeepers who are having great success renting rooms on sites like HomeAway.  Think about it this way – there could be some kind of corporate sales training or other group-type function happening near you, and people booking blocks of rooms may not be thinking “B&B” when doing their homework.  But I’ll bet many are looking at vacation rental web sites.

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This past week I was glad to lend a hand to a PAII member asking for help.  Vinessa Milando, owner of Ivy Terrace B&B in New York, NY, informed me about a bill (click here for bill’s full text) that had just made it through the New York State Senate that would essentially make illegal all short-term lodging facilities that were not bona fide hotels, i.e. B&Bs and vacation rentals.  The law, if signed by Governor David Paterson, would make it illegal for a property owner of an apartment, condo, B&B, etc., to take money from guests who stay less than 30 days.  But the issue brings up a touchy subject – the lack of laws, regulations and/or ordinances that properly define B&Bs.

In New York City, it seems that those who have been running B&Bs out of residential buildings have been able to do so because the language that described their type of dwelling was vague enough to allow for it.   Since 2003, according to Milando, innkeepers came forward and began paying the city’s occupancy taxes – just like hotels.  Supporters of the bill argue that loud, obnoxious, dirty tourists don’t mix well with “permanent” residents in the city, where permanent housing is apparently scarce.  And, they’re saying that some property owners are scamming tourists into unsafe places.  With the quick rise of the vacation rental market and sites like Craigslist, where it’s easy to advertise a couch or room for rent, there is no doubt going to be scammers and irresponsible purveyors out there.  But I would imagine that the lion share of travelers and those who operate B&Bs and vacation rentals are legitimate people wanting to do the right thing.  A law like this should not pass on account of the rotten apples, because the law would essentially kill ALL the apples – the proverbial baby AND bath water.

Property owners (innkeepers among them) quickly rallied this past week and certainly got their message out.  Check out www.protect-vacation-rentals.com to see what they were able to do, including rallying 500 folks at City Hall.  I wrote a letter to Governor Paterson urging him to veto the bill (he’s mentioned an intent to veto, but you never know) and to Mayor Michael Bloomberg, who supports the bill, maybe due to heavy ear-bending by the hotel lobby.  TripAdvisor CEO, Steve Kaufer, also submitted a letter to the Governor.  Several main stream press have been covering the story, such as USA Today, New York Times, Budget Travel and more.

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