Airbnb and like home sharing platforms have been a disruptor for the hotel industry. While hotel performance is strong in the current economic climate, hoteliers are concerned about the impact of home-sharing platforms in the future. However, it isn't home sharing that is a problem, according to experts at ALIS. Rather, the problem is full-time operators that are using home-sharing sites to operate small bed-and-breakfasts or inns.
“Room sharing is not an issue in this industry,” Katherine Lugar, president and CEO of AHLA, said on the Dealing With the new Normal Panel at ALIS this week. “People want to rent a room in their home or even occasionally rent out their home has been going on for decades. That is nothing new. Unfortunately, that is not what we see with companies like Airbnb and others, where increasingly the dominate part of their revenue is from full-time operators renting multiple units 365-days a year. To that, we say welcome; here is what that business looks like.”
In the US, hotel industry leaders are working to hold these operators accountable, and Lugar says that they are making strides. “We are working in cities and states across the country to make sure the government isn't in the business of picking winners and losers,” she explained on the panel. “If you run a small bed and breakfast or a small inn, we want to make sure that you have the same obligations. That goes to zoning, protecting neighborhoods, preserving affordable housing supply and not disrupting that and fair collection of taxation. This is just getting the rules on a level playing field for those that are running full-time businesses.”
Gerald Lawless, Chairman of WTTC, agreed that there needs to be a level playing field. He said that working with the government is important, as is looking to apartment associations to help regulate. However, he also noted that these sites do play an important role in generating tourism. “It must be on a level playing field. What has come into force as well is the homeowners associations in an apartment block have had a lot to say about if apartments can be rented in this way,” Lawless said. “I also see it as a way to facilitate tourism, we have to see that as well.”
The problem is a hot topic in Canada as well. “We ran the most comprehensive study in Canada to look at the problem and how bad is it. To give you an idea, 18% of the supply today in Canada is coming from the short-term rental industry, and the majority of that is coming from these commercial operators,” said Susie Grynol, President of the Hotel Association of Canada.
In Canada, the hotel industry has been successful working with the government to form regulations for home sharing sites. “Hotels aren't feeling the crunch today, but if we fast forward two to three years down the road and we start to see that demand curve soften, and we have a competitor out there that is offering a similar product at half the price, that is a huge problem,” said Grynol. “So, we have been very aggressive on this issue, and we have had some big wins in the last few months.”
In Toronto and Vancouver, the Canadian government has limited use of these sites to the primary resident, essentially eliminating use by apartment communities. “Not only does that wipe out the competition in those cities, it repurposes and brings the true definition of home sharing back to its original space,” added Grynol. “We have a big opportunity over the next 24 to 36 months to target the biggest cities in Canada and get some really strong laws on the books.”
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Kelsi Maree Borland
