This is the final in a three-part series exploring ways communities are playing a greater role in planning and developing their tourism industries. Guest blogger Joe Bly is a former documentary producer and writer, going beyond film and television to tell stories of social and urban progress.
Platforms like Airbnb that facilitate short term rental (STR) can make any property owner a proprietor in their local tourism industry. City governments across the country are responding largely with regulations and restrictions on private, short term rentals.
Is there a municipality doing the opposite – embracing, supporting, or even helping coordinate short term rental as part of economic and tourism development or community tourism planning?
I know a couple that lives in Cambridge, MA, just across the river from Boston. But they are not there right now. They are driving in a minivan with their four, yes four, children under the age of ten, and they’ve been travelling all summer. They can take the time because they are both public school teachers, off for the summer. But they can’t go home – they rented it out by days and weeks for the entire summer on Airbnb.
Each year they pack away their household to move out and convert their home into a rental. Their freewheeling, vagabond season is half vacation, half job. The longer they can stay out of their home, the more money they can salt away in savings. It’s not about a greater vision of building community-based lodging capacity in Cambridge, nor upending chain hotels; just the gumption of one family to pay for their four, yes four, children to go to college.
The vast majority of hosts on Airbnb, VRBO, or any of the sites that facilitate short-term rental are doing so as individuals, trying to turn extra rooming space into income. This is why there has been such a groundswell, seen all over the world – 640,000 Airbnb hosts in 57,000 cities - precisely because its driven by individual entrepreneurism.
But there are collateral benefits of STR, beyond the individual host. Airbnb has recently been making great strides in public relations to research and publish figures articulating in several ways the local economic benefit that Airbnb facilitates. Their findings claim that Airbnb generates hundreds of millions of dollars in rental and tourism spending in major cities, Airbnb guests stay longer on average than hotel guests, and therefore end up spending more money locally. Additionally, and most interestingly, Airbnb brings guests and spending to neighborhoods off the beaten path that normally don’t benefit from tourism.
That sounds great! Town planners everywhere must be leaping to figure out how to support this boon. Cambridge Office of Tourism must be trying to figure out how to coordinate with my friends? Well, much more independent research will be needed to verify the accuracy of Airbnb’s calculations, as well as to understand the impact on the entire lodging and tourism sector. And it gets more complicated from there – certain Airbnb activity bumps up against existing commercial regulation and town codes.
So the STR PR effort has gone into industry wide advocacy. In 2013, Airbnb, HomeAway, and TripAdvisor together set up and funded their own advocacy group, The Short Term Rental Advocacy Center. Their mission seems to be to promote favorable research and publicity like above, and also to stay abreast of the avalanche of state laws and municipal codes that are being altered every day as each town and jurisdiction reacts to the surge in short term rental trends.
|The Short Term Rental Advocacy Center Website|
The STRAC website and any stroll through the public minutes of town planning meetings reveals that most locales are scrambling to beef up regulations and restrictions to private and short term rental in an attempt to stave off the most rampant abuses of unregulated commerce and the worst side effects of pocking neighborhoods with crash-pads and party houses. Therefore, STRAC will also trumpet legislative victories, and examples of city and court decisions that protect owners’ rights. I asked STRAC is they knew of any towns that were somehow incorporating Airbnb activity into their economic development strategies. A spokesperson, pointed me to Galveston, TX one of their favorite STR-friendly cities. Why? The official tourism website lets you search vacation rentals and one of the only city regulations is that hosts must provide a card to guests about noise ordinances.
Hands off, yes, but more laissez faire than coordinated.
There is another model, the closest thing I could find to local government facilitating Airbnb activity and doing so in a way that can direct some of the benefit towards shared community resources.
In June of this year, Tompkins County, home to the town of Ithaca and Cornell University, became the first in the state to strike a very interesting arrangement with Airbnb – the collection and payment of the local room tax. Tompkins county has for many years required the estimated 170 Airbnb hosts to pay a 3% occupancy tax on the rental fee, the same as hotels and bed and breakfasts. However, this created a huge compliance headache. Individuals, far more often than businesses, were not aware of the requirements or how to charge the fee, and even less equipped to calculate their personal tax implications and how much they owed the county. Then it fell on the county government to try to collect owed taxes from residents. In the new deal, Airbnb will automatically add the tax to any rental in Tompkins County, and will be responsible for remitting it directly to the County.
Tompkins County Planning Department, Tourism Program Director Tom Knight, emphasizes that the agreement was in essence about solving a compliance issue in a way that now guarantees 100% payment. A 2014 report estimated that Airbnb rentals in the county that year amounted to perhaps 1 million dollars in revenue –possibly representing approximately $30,000 in room tax. A majority of the total occupancy taxes will continue to be put towards promoting tourism to the region and investing in tourism infrastructure. Knipe is careful to point out that the program is new and will need to be studied to assess if more coordination with Airbnb or its hosts will become part of the long range strategic plan. http://www.ithaca.com/news/county-get-airbnb-to-pay-percent-room-tax/article_15ebf396-38a4-11e6-afea-63e5811cd9d7.html
Related Tompkins County tourism statistics:
- Over 900,000 visitors annually, one of the highest in upstate New York
- Over $2 million per year collected in occupancy taxes and invested in tourism
- Estimated 10,000 annual room nights through Airbnb
- Airbnb room tax represents roughly 1 – 1.5% to that budget
- More cities upstate are looking into similar arrangements
Are Tompkins County’s 10,000 Airbnb room nights actually adding net tourists, or siphoning 10,000 nights from the local hotels and BnBs? That’s the subject of another blog. What’s interesting to this series’ theme of community tourism planning is the role that Airbnb and similar platforms could play.
Already there is the power to bring more residents into participatory roles in their tourism industry. They become more involved. And they are easily connected. We describe the peer-to-peer structures in terms like “members” and “communities”. Particularly for locales with little lodging industry, Airbnb could be an essential part of tapping existing lodging capacity that is closer to the community and can be utilized quickly and with little investment. With input from the community, city codes supportive of STR could be updated.
Tourist attractions and events could coordinate with Airbnb hosts – for example, if there were an upcoming festival, promotion efforts could be shared with Airbnb hosts, so that they are abreast of every opportunity and can adapt their own marketing.
Airbnb guests as a community could coordinate with the business community so that information on local restaurants, retail, and attractions could be provided to Airbnb guests the way that is standard at hotels and motels.
Airbnb can cooperate in a tax programs similar to that in Tompkins County
The Tompkins County model serves as a starting point for town and tourism planners, especially cities of lesser means, to regulate yes, but also coordinate with and harness that energy and revenue in ways that involve more of the community in the planning, and create more shared benefit.