Business

Miami hotels are making money on Airbnb. But for one, it’s parties and prostitutes

A bedroom in a Boutique 18 unit. General manager Tal Alon says the company looks for units in areas zoned for short-term rentals that can be legally listed on Airbnb.
A bedroom in a Boutique 18 unit. General manager Tal Alon says the company looks for units in areas zoned for short-term rentals that can be legally listed on Airbnb. Boutique 18

The hotel industry may be waging war on Airbnb, but that hasn’t stopped hotels in Miami-Dade from sleeping with the enemy.

Of course, to most properties that have chosen to list some of their hotel rooms on the home-sharing platform, Airbnb is anything but an enemy and rather just another site to advertise their product. They’re far removed from the ongoing tension between Airbnb and the American Hotel and Lodging Association, which has devised a detailed plan around the nation to squash the growth of short-term rental platforms.

The intersection of hotels and Airbnb has, naturally, found a home in Miami-Dade, one of the top five short-term rental markets in the country. More than 100 South Florida boutique hotels list some, if not all, of their rooms on Airbnb, the company estimates.

They are part of a growing number of properties in the U.S. that have moved onto the site, particularly since last November when Airbnb started aggressively courting boutique hotels to list on the platform. Since then, 15,000 hotels around the country have become Airbnb hosts, tweeted Airbnb founder Brian Chesky earlier this month.

“Boutique hotels found a home on Airbnb in large part because they see what they can offer and deliver being similar to our core value proposition, which is to allow people to experience cities in a much more authentic way,” said Airbnb spokesman Christopher Nulty in an interview with the Miami Herald. “Certainly it is confusing for us to hear the hotel associations that claim to represent these guys attack Airbnb, considering how many of their members use our platform.”

Boutique hotels found a home on Airbnb in large part because they see what they can offer and deliver being similar to our core value proposition.

Christopher Nulty, Airbnb spokesman

Locally, listing on Airbnb mostly has been a victory for small hotels that welcome another avenue for attracting potential customers. It’s a win for tourists too, who can usually get lower rates for hotels through Airbnb.

But for other hotels, getting into bed with Airbnb has been nothing short of a nightmare.

Airbnb’s allure

Sheldon Klein’s spiritual Zenmotel brand is only two years old and growing, so getting the word out about the property is crucial.

Klein rents out some rooms in his 8-room Zenmotel Inn and 13-room Zenmotel & Residences, both in the Upper East Side, on Airbnb. He calls the short-term rental site “one more piece to the puzzle” to attract clientele, and prefers it to traditional booking engines such as Expedia and Booking.com because of lower commission fees.

Whereas Booking.com and Expedia take about 15 percent of the total sale, Airbnb subtracts only 3 percent, he said.

“With Airbnb our money is guaranteed, the place is insured, we only have to give 3 percent. If you are dealing with a Realtor or any of the other booking engines, you are paying a fortune for that. So we have blended it,” Klein said.

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A Zenmotel Inn property listing on Airbnb. Founder Sheldon Klein said renting on Airbnb saves him the steep listing fees sites like Bookings.com impose. Zenmotel

The ease of communication with guests through Airbnb is another plus for Klein, who said that it helps him get a better understanding of who is coming to stay.

“With the Booking.com. ...you re not really sure when they are coming in or who is coming in, with [Airbnb it’s] a back and forth conversation,” Klein said. “We are small enough right now to be able to handle that.”

With Airbnb our money is guaranteed, the place is insured, we only have to give 3 percent. If you are dealing with a Realtor or any of the other booking engines, you are paying a fortune for that.

Sheldon Klein, founder of Zenmotel

But Klein said potential Airbnb hosts, hotels or residents, should only do so legally. Tal Alon, general manager at Miami Beach’s Boutique 18 hotel, agrees — but for business reasons.

As Miami Beach has cracked down on illegal short-term rentals with $20,000 fines, Alon’s vacation rental company Royal Stays Miami has been building a portfolio of short-term rental units in buildings where the operation is legal. Among them is the 12-room Boutique 18, which lists all of its rooms on Airbnb and other booking engines.

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A bedroom in a Boutique 18 unit that is advertised on Airbnb. All units are apartment-style with kitchens. Boutique 18

Royal Stays, and others, also rent out private residences within condo-hotels, such as the 214-room Mondrian South Beach and the 203-room Conrad Hilton in Brickell.

“For us it would be great if the city continues to fine people and shrink the supply,” Alon said, giving them on a lead on the growing competition.

Only a small percentage of Boutique 18’s bookings come through Airbnb, about five to six a month Alon estimated. but the hotel can make slightly more from each Airbnb booking because of the lower fees.

When the company opens the 81-unit Hotel Belleza in two weeks, it will feature hotel-apartments. Approval came after a three-year process to change the permitting on the building to allow apartment-style accommodation kitchens and eating areas — a set-up that Alon believes will appeal to travelers that seek out accommodations on Airbnb.

If you’re an apartment, you differentiate yourself.

Tal Alon, general manager at Boutique 18 hotel

“Most guys would have blown everything out and added more hotel rooms. But we kept more or less the same layout and kept the kitchens and general structure and then just rent them out as apartments as opposed to making another 36 hotel rooms,” Alon said. “If you’re an apartment, you differentiate yourself.”

An Airbnb nightmare

But Airbnb hasn’t worked for every hotel.

The Harrison Hotel on Miami Beach has tried listing five units connected to the 50-room hotel on the platform for about six months. But that will end on Sept. 30. The extra exposure from Airbnb isn’t worth the trouble, said acting general manager Eloy Ramirez.

He ticks off the challenges the hotel has faced, the grievances get worse and worse.

Each individual Airbnb guest — outside of the one who makes the reservation — don’t register with the hotel, so the Harrison doesn’t know who is staying in each room as it does with traditional guests, who are each expected to leave their information at check-in. Though the Airbnb guests don’t stay in the hotel itself, they often try to take advantage of hotel amenities they did not pay for, he said. Many leave the rooms in disarray.

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A bedroom at a Harrison Hotel unit listed on Airbnb. The Miami Beach hotel has five units listed on Airbnb but said the program has not been profitable, attracting partiers who damage the rooms. Harrison Hotel

In the worst instance, Ramirez recalled, eight men threw a party in an Airbnb room, punching a hole in the wall, and breaking a door and sofabed. The hotel called the police and charged the men $750 for the damage — more than six times the nightly rate.

But the one thing that has really thrown the hotel over the edge is prostitution.

“A lot of prostitution in the rooms — they have kind of escorts. We have camera and security. As soon as we see different people coming through one room, we start monitoring and asking questions,” Ramirez said. “It’s my job, whatever happens here I never talk about it, but you see so many people coming through one room in one day and one night and it makes you keep your alarm on.”

A lot of prostitution in the [Airbnb] rooms. We have camera and security as soon as we see different people coming through one room is when we start monitoring and asking questions.

Eloy Ramirez, acting general manager of the Harrison Hotel

Ultimately, Airbnb was an experiment that didn’t attract the kind of clientele the hotel expected, Ramirez said. It has further turned him off to short-term renting.

“I am so against Airbnb. I used to live in Jefferson [Avenue] and 11 [Street] and it’s the same thing. One week you see one person the next week you see another people and the property owner doesn’t know who is living there,” he said. “It’s unsafe completely.”

Chabeli Herrera: 305-376-3730, @ChabeliH

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