CEOs tackle Airbnb’s role in Miami’s economy

This week’s question: Do you think Airbnb is a valuable disruptor of Miami’s tourist economy? Or a commercial business that needs more government regulation?

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I believe that Airbnb is a perfect example of our free market economy and capitalistic system. Organic supply and demand principals will fine-tune this incredible disruptor. We should avoid making the mistake of allowing government regulation of this space as it will simply drive up costs and create inefficiency just as I have seen happen in my beloved profession of medicine.

Alejandro Badia, orthopedic surgeon and founder, OrthoNOW

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In Miami, there is a significant inventory of short-term rentals that are operated by full-time and multi-unit hosts as opposed to the Airbnb home-sharing concept. Basically, these are businesses operating as unlicensed hotels. The Greater Miami and the Beaches Hotel Association’s position regarding short-term rentals is that their guests must be entitled to the same safeguards as hotel guests and that the properties are registered with a business license, fully insured, regulated as to basic health and cleanliness guidelines, are ADA compliant, appropriately zoned, and that all of their taxes and fees are paid in full. In many areas of Miami Beach, short-term rentals are prohibited by statute. Hosts can run the risk of code violations with escalating fines as well as guests running the risk of immediate eviction.

Peggy Benua, general manager, Dream South Beach

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Consumers, especially tourists, have multiple choices to exercise their purchasing power and, generally, the local economy benefits from that power. Competition and purchasing options can be mutually beneficial. That being said, some type or form of government regulation is needed to protect the interests of the consumer, as well as those of the local municipality and its residents. It’s important that businesses, like those that focus on shared goods and services, abide by regulations set forth and adhered to by other businesses operating a similar and competitive business or enterprise.

Sister Linda Bevilacqua, president, Barry University

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Inherent inefficiencies in an industry open the door to new solutions and opportunities. Why should I drive a car if only one person is in it? Why should my house or apartment in New York City’s lower west side sit empty while I am out of town? The shared economy has created new opportunities to rent an open desk, a bed or seats. Since Miami’s hotels are operating at low vacancy levels and Airbnb is thriving, maybe the marketplace has figured out a balance.

Meg Daly, president and CEO, Friends of The Underline

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Airbnb began in 2008, and it gives travelers, looking for a place to stay, other affordable, non-traditional places to stay. Its operational procedures, related to a community built on sharing, appear to make sharing easy and above all, safe. In my judgment, this non-disrupter, which is only 8 years old, may need something to continue to provide the best experience for its clients, but it certainly is not government regulation.

T. Willard Fair, president and CEO, Urban League of Greater Miami

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I think the user of Airbnb is somewhat different than the typical tourist who takes advantage of our wonderful hotels. When looking at new technology or new services, I always ask what problem is it solving, and Airbnb is finding a niche for both the part-time resident who wants to offset the cost of her second home and also for the more value-oriented visitor. I do think that there needs to be some regulation if the playing field loses its level. And, of course, local economies should not be losing revenue and taxes from Airbnb users should be collected.

Mitch Kaplan, founder, Books & Books

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Today, consumers have more choices and Airbnb represents one of those newer choices. Given Miami’s record-setting tourism numbers, a company like Airbnb certainly has an impact in our community and our local economy. Now that we have identified the sharing economy of which Airbnb is part, it should be regulated in a practical and reasonable manner. If the home-sharing rentals are operating almost all year around as a commercial business would, there should be appropriate oversight to ensure the right insurance, safety and health guidelines are in place and [that they] contribute the taxes and fees that other lodging businesses would pay. Disruption in business is fantastic, but at the same time those who disrupt should play by the same rules, or the rules should be amended for all. I believe that there will be some short-term friction that is always natural when we have an evolution between an old and new system, but am confident that it will be resolved to the benefit of both those who disrupt and the disrupted.

Alan Kleber, managing director, JLL (Jones Lang LaSalle)

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Airbnb represents a fascinating case study for Miami as I think the business model is brilliant and a classic disruptor. On its face, it is easy to compare it to ride-sharing services like Uber and then suggest that we should enable this service to sink or swim on its own in our free market economy. However, in our community, hotel bed taxes are a critical contributor to our economy, so rooms that are booked to the detriment of hotels should be appropriately and fairly taxed. Remember, tourist tax dollars help fund promotion of Miami as a destination. Airbnb would not have a market in Miami if we had not already invested billions of dollars in promoting it to the rest of the world since Flagler built his railroad. And while Airbnb may be a big hit with millennials and others, many of us still prefer the security, service, standards and loyalty programs offered by hotels.

Mario Murgado, president and CEO, Brickell Motors

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Airbnb is among the ranks of revolutionary companies that are changing the way we perceive certain industries, for example, Uber with transportation. Any entity that does business outside of the normal realm will attract certain detractors, deeming the organization as a disruptor. Airbnb has created a market for a specific consumer, just as Miami’s exceptional hotels have a certain clientele and following. I believe with increased options and competition, our city’s local economy will prosper further, while attracting tourists within various demographics.

Steve Perricone, president and owner, Perricone’s Restaurant

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Innovation and competition are necessary if we are going to grow and improve the quality of life and services in our community. Uber, for example, has made Miami much more functional. The taxi service was horrible and the product of an over-regulated controlled industry. In some ways, similarly, Airbnb will force us to improve although we already have great hotel product in Miami and the situation is not identical. Airbnb also caters to a new generation and a different culture. With these new opportunities, individuals become more empowered to earn from assets like cars and homes that previously were only sources of expense. Some regulation would be helpful and the tax structure should be the same for all hospitality units.

Craig Robins, president and CEO, Dacra

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Any service that enhances Miami as a primary and preferred destination for tourism should be welcomed. Just look at Uber and Lyft as examples of positive impacts to residents/visitors with limited government intervention. That said, the business community should look to tourism officials for guidance on what, if any, role government should play in this activity. Innovation and evolution are not always easy transitions, but ultimately what’s best for our citizens and our tourists should carry the day.

David Samson, president, Miami Marlins

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I’m not involved enough with the tourism industry to have an informed opinion. What I can say is that the pace of innovation in today’s society is breathtaking, and it truly impacts nearly every segment of our economy (including heavily regulated industries such as ours). That pace leads to enormous challenges for government leaders and their organizations, who must foster innovation to grow the economy, but also ensure common-sense protections for their constituents. It requires a delicate balance.

Eric Silagy, president and CEO, Florida Power & Light

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I think that Airbnb gives individuals much-needed flexibility to make casual income. It also benefits customers by expanding the choices available to them when they are trying to find a place to stay while traveling. That said, Airbnb can also breed conflicts between neighbors — when, for example, guests come for a weekend of partying in an otherwise quiet neighborhood, or when a string of short-term strangers are careless with public spaces, noise, litter, driving, or safety. While there is accountability within the Airbnb community via rating systems, there’s little accountability for renters’ bad behavior with those who live near Airbnb properties, and who bear some of the cost of the service with little reward. I’m not sure that the answer is more government regulation, however. Perhaps a standard for neighborhoods or greater accountability on the part of the property owner to ensure respectful renters can be employed when a home or apartment is rented on Airbnb. On the whole, I do think that these forms of decentralized, disruptive business models (like Uber) are good for the economy, because they push the whole industry forward and force what may otherwise be a staid monopoly to respond directly to consumer needs and demands.

Rachel Silverstein, executive director, Miami Waterkeeper

This story was originally published July 31, 2016 at 7:00 PM with the headline "CEOs tackle Airbnb’s role in Miami’s economy."