It’s not business; it’s personal

Airbnb's original ideal supersedes regulatory dispute

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Airbnb enthusiast Cecile Helene is a radiant, British-born editor and translator married to an American anthropology professor she met in West Africa. She and her husband, Kenneth Kelly, are world travelers who maintain homes in the United States and France. It’s only natural that the affable, bohemian couple both patronizes and hosts on Airbnb.

“I started hosting at our place in France on a whim, really,” Cecile recalled. “We renovated a small apartment that I had created for my younger brother, and when he got his own place, I put it on Airbnb just to see what the response was like. I got a booking immediately. That was pretty exciting, so we kept on doing it.”

Cecile and Ken have resided part-time in Columbia since 1998, when Ken landed a tenure-track position at the University of South Carolina. Their tranquil European retreat is nestled in the tiny French village of Petit-Bersac. Their quaint stonework farm house has a spacious family garden, where the couple grows herbs and vegetables.

“This is our guest cottage, which we use for family and friends. It is a part of our home, and we welcome you to share the space with us,” their online Airbnb profile states. “Our guests can expect a relaxed experience. We provide information, a tree to sit under, and a bottle of wine to greet you.”

Founded in 2008, Airbnb was conceived as a way for pleasure travelers to become culturally immersed in the local communities they visit. It was less about the affordable accommodations as it was about the entire trip experience – a refreshing departure from conventional tourism. In the years since, business travelers have embraced Airbnb as well.

April Jones began using Airbnb for business travel about two years ago. The Midlands-based educator travels to countries like Norway and the Czech Republic to teach English. She also uses Airbnb for vacations.

“One of the things I love about Airbnb is you get to really meet people who live there,” April said. “They share things about their lifestyle and views. I like that you are in someone’s home. I have kind of been all over and really had a fabulous experience with it.”

Business travel on Airbnb has tripled this year, with an estimated 10 percent of all bookings for business. To support that continued growth, Airbnb in June launched a new tool that allows employees, such as executive assistants, to book travel on behalf of their colleagues, something they were not able to do before.

“Ken uses Airbnb for business more than I do,” Cecile noted, “but it’s just super convenient to have your own space while working, and the accommodations generally are much roomier than they would be in a hotel.”

Airbnb claims that companies using its platform for business save an average of 30 percent over traditional accommodations. Transactions are handled using Airbnb’s secure online platform, so it’s never an issue to find documentation and receipts. Airbnb collects up to 15 percent of bookings jointly from guests and hosts. Since its inception, Airbnb has led the new “sharing economy,” with more than 2 million listings in 191 countries and 34,000 cities.

Airbnb and short-term rental companies like it caught on so quickly that their full impact on the hospitality marketplace was not immediately apparent. Now large industry trade groups are pushing legislation in several states and municipalities to regulate Airbnb. They say Airbnb should have to play by the same rules they do, including payment of occupancy taxes and compliance with industry safety and sanitary regulations. They assert that Airbnb enables its hosts, in many cases, to make Airbnb a full-time enterprise, basically to operate illegal hotels.

Like typical bed-and-breakfasts operating out of private homes, the presumption with Airbnb is that guests rent spare rooms that are part of an owner-occupied property. As guests in the owners’ homes, they receive the added benefit of living like the locals, of having firsthand exposure to the native culture and color, of breaking bread and engaging in meaningful conversation.

Dozens of bills are targeting those who purchase and list on Airbnb one or more unoccupied homes, essentially removing those properties from the rental housing market. Detractors say that opportunistic entrepreneurs who operate “illegal hotels” on websites like Airbnb should be subject to industry regulation and fees. Laws designed to discourage and restrict illegal operations already have passed in a handful of states.

John Warner, CEO of Concepts to Companies, a Greenville-based entrepreneurial start-up development firm, is unsympathetic toward big hospitality and its efforts to undermine Airbnb.

“It’s an example of industry using regulators to snuff out the competition,” he said. “It doesn’t look like a hotel. It doesn’t smell like a hotel. People in the hospitality industry say it’s not fair, but what they really are concerned about is competition.”

The current debate over Airbnb reminds Warner of a time when South Carolina Educational Television (SCETV), having converted from analog to digital signal, proposed to use the resulting excess capacity to create an affordable, wireless broadband network (WiMax) providing access to underserved communities across the state, especially rural schools. The proposal got mired in legislative counterproposals for SCETV to lease capacity to one or more for-profit telecommunications companies. “The bigger issue is innovation,” Warner said. “Ideas often get frustrated in this way.” Ultimately, SCETV’s pioneering WiMax concept never reached fruition in South Carolina, largely because “the telecommunications industry shut it down, making all the similar arguments.”

“It’s tough to bring forth something new and innovative like that,” Warner said. “Whenever an incumbent market leader is threatened, it’s by a model that they will have a very difficult time replicating, and Airbnb is a very difficult thing for the hotel industry to replicate.”

Cecile’s and Ken’s motivation to host has never been profit; they sincerely enjoy visiting with guests in their garden and telling them about the local history, medieval churches, and quaint eateries of their town.

“Mostly I enjoy the interactions, and sometimes I make lasting friends,” Cecile said. “We don’t run it as a business. The money pays for improvements and some expenses.”

Asked how she feels about the regulatory politics churning around Airbnb, Cecile was resolute.

“I support people renting out their spare room or second home that they aren’t using right now,” she said, “but not the people who have piggy-backed on the concept and made businesses out of buying apartments in large cities to rent through Airbnb and changing the demography and access to residential rental property.”

Overall, South Carolina has 4,000 listings on Airbnb. Of the state’s major metropolitan hubs, Columbia has 167 Airbnb listings, Greenville has 297, and Charleston an impressive 735. According to Airbnb, South Carolina has experienced approximately 170 percent annual growth. Between April 2015 and March 2016, 101,000 people visited the state via Airbnb, and some 81,000 South Carolinians traveled via Airbnb. A typical listing is booked about 42 nights out of the year, with hosts earning up to $6,000.

Still a relatively young company, Airbnb has made good-faith adjustments over the years to appease its challengers. The company insists it takes swift action against hosts who abuse its platform and operate outside established parameters. This summer, the company released data showing that it has collected $85 million in tax revenue for cities worldwide since 2008. And in June, Airbnb announced that it is voluntarily collecting and remitting hotel and tourism taxes on behalf of its hosts and guests in South Carolina and several other states.

And while most who host on Airbnb say it’s not about the money, there are some who depend on Airbnb income to stay afloat in harsh economic times.

“For thousands of South Carolinians, Airbnb is making it possible to make ends meet, pay the bills, and stay in their homes,” Jillian Irvin, Regional Director of Public Policy for Airbnb, said in a release. “Thanks to the leadership of South Carolina officials, our community can now contribute millions to their communities in tax dollars annually and continue to bring new revenue and visitors to hundreds of South Carolina local businesses.”

Regardless of its size, Airbnb is and most likely will remain a niche business that is helping reinvent our hospitality culture. However, John Warner understands the political challenges with which Airbnb likely will continue to contend.

“At the end of the day, they (industry lobbyists) will appeal to the Legislature. They will have a huge influence on how this goes down. It’s going to come down to a political decision,” he said. Unfortunately, “the consumer isn’t really in the conversation.”

“On the whole, hosting has been a pleasant and enriching experience,” Cecile said. “It’s easy for us to do because we are sociable, hospitable, and curious. I love to tell people about my part of France, and I like to be able stay in a big city for an affordable price.”

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