It’s hard to reconcile the company’s empire with the small scale of many of the rentals.
Last year, almost 70,000 tourists to Bay County ditched the convention of booking a hotel room, opting instead to stay in a spare room, house, condo or even sailboat of a stranger they met on the internet.
Ten years ago, the concept was nearly unheard of, and certainly widely advised against. But it was about that same time that Airbnb founders Brian Chesky and Joe Gebbia were struggling to pay the rent on their San Francisco apartment, and so the story goes, they got the idea to start up a website and rent out an air mattress in their living room.
They cheekily named it the Air Bed and Breakfast, and what they quickly found was people liked the idea. A lot.
So the pair expanded the website to allow anyone to rent out their spare spaces — whether it be an unused bedroom, a tent in the backyard, a beach house, apartment, the list goes on and on — and shortened the name to Airbnb.
Since then, it’s become one of the most successful tech startups, worth an estimated $30 billion, according to Business Insider. And according to platform’s own data, Airbnb hosts in Bay County cleared $12 million in revenues last year.
The platform’s reach is rapidly expanding throughout the county, and tourism officials say it has become an important market.
There’s a lot users of the platform say they like about it — the unique listings, the friendships, the prices — but as critics will point out, the lawlessness of the company’s beginning compared to the empire it has created don’t always mesh.
Particularly, critics say, when it comes to taxes and regulations.
An even playing field
Some local hoteliers say they are being put at an unfair advantage, as they believe many people using Airbnb to rent out their homes are not paying the bed taxes that hotels pay.
Plus, Airbnb rentals aren’t required to have business licenses and meet the same safety requirements as hotels, hoteliers point out.
“All we ask is that there be a level playing field so that whoever else is renting hotel rooms or homes or whatever, they have the same license fees and inspections and standards we at hotels have,” said Julie Hilton, whose family owns five hotels in Bay County including Holiday Inn Resort. “That’s all we ask is a level playing field, and it certainly is frustrating to be subject to the various licenses and rules and regulations and inspections and bed taxes that we collect and others may or may not collect so that they have a very strong competitive edge without incurring those costs.”
Philip “Griff” Griffitts, a county commissioner and Tourist Development Council member, also has concerns about the proliferation of the Airbnb rentals in the county.
“Whether you have one room or 100 rooms, it should be the same playing field,” he said.
Griffitts, whose family has owned hotels on the beach for decades until they recently sold them, is particularly worried about safety.
“When you are dealing with the public, you have to have some public safety requirements, as a public lodging establishment, so safety — whether it’s a fire extinguisher or signs, things like that — if it’s a short term rental,” he said. “Obviously they need to be treated like all the other businesses and pay their fair share of taxes.”
The tax issue
For something that started in an environment as unstructured as an air mattress on the floor — and that can still be a simple as a spare bed or a tent in the backyard — taxes can be a confusing concept.
“Some people honestly don’t know they have to pay them,” said Jennifer Vigil, the president and CEO of Destination Panama City.
But in Panama City and Panama City Beach, Airbnb rentals are not excluded from the bed tax.
Collections, however, have proved difficult.
In addition to some people being unaware, the county and Airbnb have yet to reach an agreement on how to go about paying the tax.
Airbnb wants to collect the tax through their platform and then pay it to the county in a lump sum, like they do in 40 of Florida’s 63 counties, according to Airbnb spokesman Ben Briet. This is how they tell hosts to collect the tax on their help page.
In most places, it works. Airbnb Florida said a recent press release that its vacation rental platform collected and remitted over $45.7 million in tax revenue to Florida state and local governments on behalf of its hosts in 2017, up from $20 million in 2016.
But, Breit said, Bay County was among the 23 counties to reject the company’s offer to remit the bed taxes for Airbnb customers here.
“We reached out to them a few years ago, and they have not expressed much interest,” he said.
According to Charlene Honnen, a tax specialist with the Bay County Clerk of Court’s office, the office doesn’t like the agreement Airbnb put forward because of the lack of information the company provides.
“They refused to identify for us all of the properties they were representing, so they could not tell us, ‘This is how much income (is coming from units),’” Honnen said. “All they would do is give us flat number and we were to accept it as accurate. They would give us absolutely no details. We didn’t even have assurances that they were capturing all properties in the taxing jurisdiction. Bay County requires unit reporting. It means that we want income reported on a unit basis.”
Honnen said Airbnb was not willing to have an open dialogue on the issue.
But Breit said the company is not about to disclose details about the rentals, which it considers personal information of the homeowners. (Some renters, however, do pay the taxes to the county directly.)
As a result, Bay County Clerk of Court Bill Kinsaul said he plans on taking a different approach.
He recently hired a company to help the office collect bed taxes not being paid by Airbnb hosts.
“They are pretty much guaranteeing that they have the methodology to go through and search and find properties that are on mainly Airbnb, and track them down and be able to print us out a report of people who are renting short-term rentals but are not in our database and we’re not collecting (bed taxes) from currently,” Kinsaul said.
Once these people are identified, his office will send them a notice asking whether they are paying the bed taxes. Kinsaul said if the person doesn’t respond, an audit will be done by his office.
“When it gets down to the point where it involves bigger properties and we know they are collecting (rent) and not paying (bed taxes), we can freeze accounts,” he said. “We’ve never gone to the extreme to get the State Attorney’s office involved, but that could definitely be a possibly if someone is collecting and not paying to us.”
Kinsaul said there are Airbnb hosts who are paying the bed tax, but his office doesn’t know exactly how many are not paying.
“We just don’t know the total pool that is out there and that is one reason we are hiring this company, and they are not the only ones that do this,” he said.
Not going away
While the tax issue is still being debated, Airbnb units are unlikely to go away anytime soon.
Catie Feeney, a spokeswoman for the Bay County Tourist Development Council, said Airbnb rentals have a lot to do with the destination still continuing to grow.
Vigil said Airbnbs are bringing in visitors who are spending money in the local economy.
“The non-collection of Airbnb (bed taxes) doesn’t have an impact on our bed tax collections right now because it’s never been collected,” she said. “Now, if it were being collected, we’d obviously have a little bit of a bump (in revenues), but we’re not seeing a decline because it’s not being collected.”
She said the general consensus of hoteliers and Airbnb officials throughout the world is that Airbnb has had very little impact on the hotel occupancy rates.
“A lot more people are traveling,” she said. “It allows a whole new demographic to travel.”
Vigil said in Panama City along there has been a 70 percent growth rate in Airbnbs over the last three years. “And when you look at the map where all of these are, they are all around Hathaway Bridge, St. Andrews, Beach Drive and downtown in the Cove area, because what citizens realize is there is a high demand for people to be close to the water, and they want to be close to the bay,” she said.
Griffitts, however, said that proliferation is a concern for some hoteliers.
“They all watch it very close because it gets into their pocket book as well,” he said.
But Airbnb host Beverly Taylor, who can earn as much as $5,000 a week renting her Gulf front home on Front Beach Road, said she thinks ultimately this is going to be a good thing for the area.
“I think it’s a tremendous help for the area just from the taxes that are being paid because of offering the service,” she said. “I think that it is a change in the demographics and how the younger groups are booking property now. I could not believe how many bookings I’ve gotten through Airbnb on this property.”