Tourism & Cruises

Airbnb and hoteliers battle over role, regulations for home-sharing in Miami

Airbnb co-founder and CEO Brian Chesky speaks in San Francisco on April 19. In Miami, the service is under scrutiny from hoteliers who feel the business should be regulated in the same way hotels are.
Airbnb co-founder and CEO Brian Chesky speaks in San Francisco on April 19. In Miami, the service is under scrutiny from hoteliers who feel the business should be regulated in the same way hotels are. Miami

Is Airbnb a casual home-sharing service or a commercial rental business posing serious competition for South Florida hotels?

That question is at the heart of a data battle spurred Wednesday by a report released by the American Hotel & Lodging Association. The conflict has all the makings of an Uber-esque fight.

The report claims that the proportion of Airbnb hosts using the platform as a commercial business is increasing — and making up a substantial percentage of Airbnb’s local revenue. Hoteliers argue Airbnb has gone unregulated too long, allowing it to circumvent the rules and taxes enforced on traditional lodging accommodations — similar to the argument waged by taxi companies against Uber.

Not so, says Airbnb, which contends that the majority of South Florida hosts rent their space in the way the platform is traditionally used: occasionally and as an income supplement.

But for some locals, Airbnb is a 365-day-year business that earned more than $47 million last year, rather than an occasional money-generating option.

 

The hotel association report analyzed listings in Miami-Dade, Broward and Palm Beach counties between October 2014 and September 2015 and was based on data from Airdna, which tracks Airbnb data. It was published by Pennsylvania State University’s School of Hospitality Management and funded by the hotel association.

According to the study, about 6 percent of South Florida Airbnb operators list units for rent more than 360 days per year, bringing in 39 percent of Airbnb’s Miami-area revenue — the highest percentage of any of the 14 major metropolitan regions studied.

That’s clearly not sharing your home with someone for extra money on occasion.

Troy Flanagan, vice president of state and local affairs for the American Hotel & Lodging Association

But Airbnb says the methodology is flawed because the study doesn’t distinguish between a room listed as available and a room that is actually booked.

According to data provided to the Miami Herald by Airbnb, the percentage of listings booked for more than 360 days was zero. Only one percent was booked more than 300 days. The average host made $6,400 from sharing his or her space, for an average of 42 nights in 2015.

Still, according to the hotel association report, operators who list properties for more than 180 days per year brought in $93 million, accounting for three-quarters of Airbnb’s South Florida revenue.

The association’s point: “An increasing proportion of revenue is built on the part that is commercial operators, people who are renting our units 365 days a year,” said Troy Flanagan, vice president of state and local affairs for the American Hotel & Lodging Association. “That’s clearly not sharing your home with someone for extra money on occasion.”

Christopher Nulty, a spokesman for Airbnb, called the study “inaccurate” and “the latest example of the industry’s attempt to mislead and manipulate to stifle competition.”

“The AHLA is out of touch with the increasing number of consumers and cities embracing the tremendous benefits of home sharing,” Nulty said. “Vacation rentals have always been a driving force in Miami tourism and now home sharing is broadening that impact and bringing visitors’ dollars to new neighborhoods and small businesses.”

In South Florida, regulations regarding short-term rentals vary by municipality, but the practice is illegal in much of the region. Miami Beach bans short-term rentals in all single-family homes and allows it in multi-family buildings only in specified areas. Fort Lauderdale limits the number of guests. Key West recently cracked down on the practice, requiring licenses for rentals lasting less than 30 days.

It’s not terribly dissimilar to [ride-sharing services] Uber and Lyft. These things come up and regulation is tough to catch up.

William D. Talbert, III, president and CEO of the Greater Miami Convention and Visitors Bureau

But Carol Dover, president and CEO of the Florida Restaurant and Lodging Association, said a growing percentage of hosts take advantage of the home sharing premise to profit from a regulation loophole.

While Airbnb allows hosts to rent a space for an indefinite amount of time, doing so in South Florida without paying city-level regulations and taxes or adhering to zoning requirements is a violation of state law.

The bed taxes paid by commercial lodgings — 6 percent in Miami-Dade County and 5 percent in Broward County — go back to marketing the location to tourists.

Nulty said Airbnb does collect and remit some taxes. The service has been collecting a 6 percent state-wide transient rental tax since Dec. 1, 2015. It also collects the county-level resort tax from 27 Florida counties — though none are in South Florida. Nulty said he expects Miami-Dade to join the list soon.

Miami-Dade County Mayor Carlos Gimenez’s office confirmed it has had a handful of discussions with Airbnb about taxing schemes and regulation of the business in the county.

William D. Talbert III, president and CEO of the Greater Miami Convention and Visitors Bureau, said he is confident Airbnb will reach a tax agreement with the county. The next concern is regulations.

“It’s not terribly dissimilar to [ride-sharing services] Uber and Lyft,” Talbert said. “These things come up and regulation is tough to catch up.”

Hoteliers are concerned Airbnb doesn’t fall under general hotel regulations, leading to safety, noise and zoning concerns in cities such as Miami Beach where Airbnb is most prevalent. Four of the top five ZIP codes for Airbnb revenue were in Miami Beach; the fifth was in downtown/Brickell.

“We want to make sure the guests are entitled to the same safeguards as our hotel guests and that the properties are registered as a business, fully insured, regulated to basic health, safety and cleanliness guidelines, ADA guidelines, and that they are appropriately zoned and that all their taxes and fees are paid in full,” said Wendy Kallergis, president and CEO of the Greater Miami & the Beaches Hotel Association.

$122 million Airbnb’s South Florida revenue, according to a report by Pennsylvania State University’s School of Hospitality Management and funded by the American Hotel & Lodging Association

Several Miami Beach residents, too, have spoken out against Airbnb.

“It is so pervasive,” said Philip Berry, the board president of a 25-unit condo building south of Lincoln Road. “I can point out at least 20 buildings in a secure four-block area where this is occurring.”

Some renters have signed year-long leases only to then run the unit as an Airbnb, Berry said. Many of those who stay are young college students who invite friends; several have been found passed out in the hallways after partying, he said. Bricks are placed in doors to the building to allow guests to enter easily, causing a safety hazard for residents in the building.

In a recent notice sent to building residents ahead of Memorial Day weekend, the management discouraged short-term rentals, reminding tenants that the practice is not permitted.

“If you are considering engaging in this activity, we ask you to seriously reconsider. The board has instructed management to strictly enforce this rental policy. Having unknown people in the building creates a safety issue for the building and residents,” the notice states.

The fine is $20,000 for a first violation and then doubles and triples for subsequent violations.

Nulty said Airbnb believes cities and municipalities should draft rules to address home sharing and is open to working with each city to do so.

“We believe that to be regulated is to be recognized,” Nulty said. “Enforcement is best in the hands of a city and local municipality.”

Matt Kiessling, who heads short-term rental policy for the Travel Technology Association, said the concept of a revolving door hotel next door is not accurate. Airbnb and other short-term rental and online travel companies are members of the association.

Regulation of unruly behavior at short-term rentals should be treated in the same way it is no matter the location, he said.

“If there is some sort of issue with the property next door, the question is how do you deal with it any differently than you deal with a neighbor?” Kiessling said. “If there is a loud party next door, you call the police or you call code enforcement and have them deal with it. There are already embedded solutions at the municipal level to deal with that problem.”

We believe that to be regulated is to be recognized, Enforcement is best in the hands of a city and local municipality.

Christopher Nulty, spokesman for Airbnb

Local Airbnb host Penny McCrea rarely faces that issue.

She lists two rooms in her South Miami home on Airbnb at $65 a night each, to supplement her income as a copy editor. She said she’s had a range of guests stay with her since she joined Airbnb in May 2013. McCrea has earned the distinction of “superhost” based on an abundance of positive reviews for cleanliness, value and communication.

“I look after it and I’ve had people say, ‘I’d pay 500 bucks a night for this,’” McCrea said. “Quite often we will sit outside in my garden with a glass of wine, chatting.”

Airbnb injects authenticity into a traveler’s experience, McCrea said.

But some locals might be abusing the Airbnb platform. McCrea said she was approached by a local resident to sign a lease and rent out an empty apartment or home on Airbnb. The deal would have made her an additional $40,000 to $50,000 a year, she said.

She supports regulations for rentals treated as a business without a host present.

“I’m sure lots of people do it, and it may be legal, but I don’t think it’s ethical,” she said.

THE NUMBERS

A report released Wednesday by the American Hotel & Lodging Association claims that for some Airbnb operators, short-term rentals have become a commercial enterprise. According to the report:

▪ Airbnb revenue in the South Florida region total more than $122 million over the time period studied.

That works out to about 4.3 percent of the $2.8 annual revenue generated by the Miami metro area’s hospitality industry, according to data and analytics specialist Smith Travel Report.

▪ Airbnb operators who offer multiple units on the online service drove 62 percent of Airbnb’s regional revenue — about $76 million. That was the highest percentage of the 14 cities studied, which includes New York City, Los Angeles, Chicago and San Francisco. (Nationally, multi-unit hosts account for nearly 40 percent of Airbnb revenue in the 14 cities, or about $500 million, according to the study.)

Matt Kiessling, who heads short-term rental policy for the Travel Technology Association, said those numbers are misleading because property managers may be listed as the contact person for multiple rentals on Airbnb, when in fact those rentals are owned by different hosts.

▪ Four of the top five ZIP codes for Airbnb revenue were in Miami Beach; the fifth was in downtown/Brickell. Together, they accounted for more than $79 million in revenue.

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