Editor’s Note: Airbnb has gone from a two-person start-up to a $2.6-billion company in a decade. A boon to tourists, bane to renters, Airbnb now has governments considering them. What’s all the fuss about? This is the second instalment in a three-part series looking into the Airbnb experience.
SYDNEY — After taking the rental accommodation market by storm, Airbnb is sending shockwaves through the more traditional lodging establishment, globally and across Atlantic Canada.
Founded just 10 years ago by a pair of 20-something San Francisco roommates, Airbnb is essentially a brokerage service that connects people looking for short-term accommodation with those offering it. In 2017, the private company reported revenues of $2.6 billion, operating income of $450 million and a net income of $93 million. The service, with listings in some 65 countries worldwide, is said to have 150 million users and more than 640,000 hosts.
But while the online-based innovative service has opened new options for travellers, it’s also captured the attention of competitors — namely bed and breakfasts, and hotels — while throwing a wrench into local rental housing in places such as Charlottetown, Halifax and St. John’s.
“It’s definitely had a major impact, specifically in Charlottetown, because there are so many Airbnbs now,” said Sharyn Dalrymple, vice-president of the Bed and Breakfast and Country Inns Association of Prince Edward Island and longtime owner of the Duchess of Kent Inn in downtown Charlottetown.
“I think that when the average visitor sees B&B and Airbnb, they basically don’t know there is a very strong difference — it’s a very blurred line between our traditional B&Bs and Airbnbs.”
Dalrymple said while many of her island’s B&Bs still flourish, she’s concerned about the lack of a level playing field in the always competitive industry.
“It’s a hard pill to swallow when you hear people picking an Airbnb because it’s a few dollars less, whereas for, say, five dollars extra they could be staying at an established bed and breakfast,” she said.
“Tourism is a major industry on my island and I do not want anything to screw it up — God forbid if someone has a bad experience at an Airbnb because all the B&Bs will be tarnished by the same bad experience brush. I’m very protective of my segment of the industry and tourism is very important to this island and we really need to maintain a high level of good accommodation.”
To that end, Dalrymple is just one of many traditional lodging operators calling for more strict regulations to be placed on the Airbnb-type of service.
John Steele, president of Newfoundland’s Steele Hotels, has also spoken up about Airbnbs impact on the industry.
“First off, we’re not against Airbnb — it’s here to stay and we realize that it’s a great platform and we’re not knocking that at all,” said Steele, who is also a member of the Hoteliers of Canada and Hospitality N.L.
“The issue is not that some guy is renting out an extra bedroom for a few bucks, the issue is that there are a lot of people with multiple properties, it’s a real estate play and it’s big business — (Airbnb hosts) are able to be in the industry without regulation and without paying taxes and fees, so all we’re saying is that they should be licensed and they should pay taxes and fees.”
The hotelier, who operates half a dozen establishments across Newfoundland, including the JAG in downtown St. John’s, estimates the provincial capital is losing out on an estimated $250,000 annually in taxes. He said the city is missing out on its four per cent accommodations tax.
“In St. John’s, that fee goes toward the convention centre and the marketing of the city, which benefits Airbnb operators, so we’re saying they should kick in some money because they are reaping the benefit that is paid for by licensed operators,” he said.
“If you are licensed you’re going to be inspected, so there are going to be standards and you’ll know what you’re getting — there are a lot of great Airbnb properties, but if we have to be regulated and we’re selling multiple rooms, multiple nights of the year at our property, to me the logic just goes that if somebody owns four or five houses they should be regulated the same because people have to know what they’re getting, there has to be standards and they have to pay their fees and taxes.”
Concerns have also been raised that the dramatic increase in Airbnb listings is having an effect on rental housing markets as more and more landlords are seeing the Airbnb as a better option than long-term renting. Although yet to be quantified, the result appears to be a decrease in the number of available and affordable rental units.
And that’s not good news for students seeking off-campus accommodation in university cities such as Halifax.
Saint Mary’s University students union president Ossama Nasrallah said adequate and appropriate housing continues to be an issue for students living off campus.
“The good thing about Saint Mary’s is that it is in a part of the city where there are plenty of houses and apartments relatively close to the university,” said Nasrallah, who acknowledged the school’s residences are full and have waiting lists of students desiring on-campus housing.
“Housing is an issue for our students, but I think it is still too early to assess the effect of Airbnbs, but we have been continuing to assist our students in many ways to support them finding apartments or places to live.”