Since I was three years old, when my parents took me on the first of many yearly summer trips to Stowe, Vermont, a love of travelling has taken root deep down in my loins. Travel has since become the ultimate dream for me – an escape from reality, a cure to routine, the promise of life-changing experiences – that I have followed from country to country and from paycheck to paycheck.
Unfortunately for globetrotting enthusiasts such as me, the price of fulfilling this dream has risen dramatically since the days of those first summer trips. With flight and hotel costs soaring to unreasonably high levels in recent years, I’ve found myself struggling to juggle my finances when abroad rather than enjoying these experiences to their fullest, and have been coming home from my trips unusually broke, and even more unusually disappointed, as a result.
All that changed in 2011, when, as an admittedly late convert, I embraced the joys of short-term holiday apartment rentals. With companies like Airbnb, HomeAway, and 9flats bringing travel accommodation to the new sharing economy, the outlook for travelers changed dramatically. Rather than booking hotel accommodations in Florence for the price of a Michelin-starred meal, for example, I could now book a fully furnished apartment overlooking the Arno for under $50 a night. That’s not to say that every apartment offered for rent is cheap. In fact, some users offer up palatial villas for thousands of dollars a night; but this represents a niche market within a generally budget-friendly offering. For those of us who have outgrown hostels but still live from paycheck to paycheck the proliferation of these services has made travel much more affordable.
But…
… But there is a flipside to this story – hotels and tourist destinations feel that they are missing out. Take Airbnb, for example: the company has a user community spanning almost 200 countries, and has gone from serving a negligible number of users in 2008 to helping people book over 10,000,000 nights in user apartments to date, a point illustrated by the company’s infographic below. Add to this the fact that Estimize, a reputable crowd-sourced financial information consultant has conservatively valued Airbnb’s hypothetical IPO at $10,000,000,000 and it’s no surprise that cities and hotels are scrambling to minimise the amount of revenue and taxable income they lose to the apartment sharing community.
A New York Story
As this sea-change in the tourist industry finally hits home for hotels and tourism bureaus this year, Airbnb in particular has faced major backlash and desperate attempts to block its progress in cities around the world. In the year’s most publicized example of anti-Airbnb hostility, New York City famously fined user Nigel Warren $2400 for violating its “Illegal Hotels Law”. The 2011 law, which can be viewed here, makes it illegal for anyone in New York to rent out his or her apartment for profit for less than 29 days.
While the city admits that the intent of the legislation was never to criminalize services like Airbnb, it has sparked a heated debate on the issue, and has even inspired Airbnb to piggy-back on Nigel Warren’s case to show solidarity with its user-community. Opponents of the law argue that far from taking money away from hotels, Airbnb actually attracts tourists to neighbourhoods outside traditional tourist centres, where the vast majority of hotels are located, and draws attention to some of New York’s less appreciated boroughs. No matter the arguments for or against the service, Airbnb’s popularity in the city continues to rise steadily. If anything the publicity surrounding the Nigel Warren case has attracted more users than ever for the site.
Quebec (unconvincingly) joins the fight
Hopping on the “Where’s my money?” bandwagon just days after the Nigel Warren story broke in New York, the Quebec government stepped up the enforcement of its own law aimed at curbing private residence rentals throughout the province. The legislation, which has been in effect for years, states that residents of Quebec cannot rent out their apartments for less than 31 days, or advertise their availability online for the same time period on a regular basis, without first registering with the provincial tourist office and paying a $250 fee.
Although organizations like Montreal’s Bed and Breakfast Association have been lobbying the government on the subject for years, Tourisme Quebec has never been as adamant about its support for the law as it became when Airbnb’s high-profile case in America made short-term apartment rentals a global story.
While the business case for protecting the province’s hotel industry is strong, it seems hypocritical for Tourisme Quebec to suddenly begin enforcing a law that, when examined more closely, stops short of doing so. If anything, it seems like a thinly veiled money-grab, a pay-to-play fee for apartment owners – these people, many of whom rely on regular income from short term rentals to supplement their income, will hardly be deterred by a one-off $250 fee, while the price gap between short-term rentals and hotel rooms remains so wide that homeowners will continue to attract a steady flow of tenants.
As if to unintentionally admit the questionable motivation for this law, Tourisme Quebec’s Suzanne Asselin recently revealed in an interview with 98.5FM in Quebec that the province is investigating upwards of 2000 people renting out their homes without a permit, and that government agents have in fact been making fake reservation requests to catch repeat offenders. Asselin went on to say that the goal of this crackdown is to ensure the safety of visitors to Quebec, rather than to protect the interests of the province’s hotel and bed and breakfast owners. How Tourisme Quebec connects the dots between it receiving $250 from homeowners and tourist safety is anyone’s guess.
What now?
So what’s the real story here? What does the proliferation of apartment rental startups like Airbnb mean for the hotel industry? Should cities continue to fight these companies or should they embrace the apartment-rental trend and just regulate its operation from a distance.
The government in Amsterdam seems to favour option number two, with promising results so far. After a highly-publicized investigation into illegal hotels throughout the city, during which some vacationers were actually kicked out of apartments whose owners did not have rental permits, officials finally admitted that Airbnb isn’t illegal in Amsterdam. In fact, after months of heated deliberation the government has actually legalized short-term holiday rentals in the city, giving residents the right to lease out their homes as long as they do not buy up real-estate just to house visitors continuously and remain respectful to neighbours.
Cities that follow Amsterdam’s example have a lot to gain from businesses like Airbnb. By making travel more affordable, apartment rental companies bring more tourists than ever to these places, which translates into a significant bump in commerce for local businesses. Moreover, because most homeowners don’t live near areas with a high concentration of hotels, it’s unlikely that their offerings will attract a significant number of tourists who would otherwise stay in a four-star tower in the city-centre.
Nobody would argue that smaller hotels, as well as bed and breakfasts’, haven’t struggled to keep up in today’s difficult economy and there’s no doubt that short-term apartment rentals have played some role in this unfortunate reality. That being said, the opportunities and value that companies like Airbnb present to cash-strapped travel enthusiasts make them a godsend in an increasingly expensive world. It will be interesting to see how cities and the hotel industry react to the growing popularity of these businesses, but it’s unlikely that they will enact more laws like those adopted by New York and Quebec. In the era of the sharing economy, forward-looking cities will welcome companies like Airbnb, both to stimulate their tourist industries, and to give born travelers like myself another excuse to start booking off holidays.
Since I was three years old, when my parents took me on the first of many yearly summer trips to Stowe, Vermont, a love of travelling has taken root deep down in my loins. Travel has since become the ultimate dream for me - an escape from reality, a cure to routine, the promise of life-changing experiences – that I have followed from country to country and from paycheck to paycheck.
Unfortunately for globetrotting enthusiasts such as me, the price of fulfilling this dream has risen dramatically since the days of those first summer trips. With flight and hotel costs soaring to unreasonably high levels in recent years, I’ve found myself struggling to juggle my finances when abroad rather than enjoying these experiences to their fullest, and have been coming home from my trips unusually broke, and even more unusually disappointed, as a result.
All that changed in 2011, when, as an admittedly late convert, I embraced the joys of short-term holiday apartment rentals. With companies like Airbnb, HomeAway, and 9flats bringing travel accommodation to the new sharing economy, the outlook for travelers changed dramatically. Rather than booking hotel accommodations in Florence for the price of a Michelin-starred meal, for example, I could now book a fully furnished apartment overlooking the Arno for under $50 a night. That’s not to say that every apartment offered for rent is cheap. In fact, some users offer up palatial villas for thousands of dollars a night; but this represents a niche market within a generally budget-friendly offering. For those of us who have outgrown hostels but still live from paycheck to paycheck the proliferation of these services has made travel much more affordable.
But...
... But there is a flipside to this story – hotels and tourist destinations feel that they are missing out. Take Airbnb, for example: the company has a user community spanning almost 200 countries, and has gone from serving a negligible number of users in 2008 to helping people book over 10,000,000 nights in user apartments to date, a point illustrated by the company’s infographic below. Add to this the fact that Estimize, a reputable crowd-sourced financial information consultant has conservatively valued Airbnb’s hypothetical IPO at $10,000,000,000 and it’s no surprise that cities and hotels are scrambling to minimise the amount of revenue and taxable income they lose to the apartment sharing community.
A New York Story
As this sea-change in the tourist industry finally hits home for hotels and tourism bureaus this year, Airbnb in particular has faced major backlash and desperate attempts to block its progress in cities around the world. In the year’s most publicized example of anti-Airbnb hostility, New York City famously fined user Nigel Warren $2400 for violating its “Illegal Hotels Law”. The 2011 law, which can be viewed here, makes it illegal for anyone in New York to rent out his or her apartment for profit for less than 29 days.
While the city admits that the intent of the legislation was never to criminalize services like Airbnb, it has sparked a heated debate on the issue, and has even inspired Airbnb to piggy-back on Nigel Warren’s case to show solidarity with its user-community. Opponents of the law argue that far from taking money away from hotels, Airbnb actually attracts tourists to neighbourhoods outside traditional tourist centres, where the vast majority of hotels are located, and draws attention to some of New York’s less appreciated boroughs. No matter the arguments for or against the service, Airbnb’s popularity in the city continues to rise steadily. If anything the publicity surrounding the Nigel Warren case has attracted more users than ever for the site.
Quebec (unconvincingly) joins the fight
Hopping on the “Where’s my money?” bandwagon just days after the Nigel Warren story broke in New York, the Quebec government stepped up the enforcement of its own law aimed at curbing private residence rentals throughout the province. The legislation, which has been in effect for years, states that residents of Quebec cannot rent out their apartments for less than 31 days, or advertise their availability online for the same time period on a regular basis, without first registering with the provincial tourist office and paying a $250 fee.
Although organizations like Montreal’s Bed and Breakfast Association have been lobbying the government on the subject for years, Tourisme Quebec has never been as adamant about its support for the law as it became when Airbnb’s high-profile case in America made short-term apartment rentals a global story.
While the business case for protecting the province’s hotel industry is strong, it seems hypocritical for Tourisme Quebec to suddenly begin enforcing a law that, when examined more closely, stops short of doing so. If anything, it seems like a thinly veiled money-grab, a pay-to-play fee for apartment owners – these people, many of whom rely on regular income from short term rentals to supplement their income, will hardly be deterred by a one-off $250 fee, while the price gap between short-term rentals and hotel rooms remains so wide that homeowners will continue to attract a steady flow of tenants.
As if to unintentionally admit the questionable motivation for this law, Tourisme Quebec’s Suzanne Asselin recently revealed in an interview with 98.5FM in Quebec that the province is investigating upwards of 2000 people renting out their homes without a permit, and that government agents have in fact been making fake reservation requests to catch repeat offenders. Asselin went on to say that the goal of this crackdown is to ensure the safety of visitors to Quebec, rather than to protect the interests of the province’s hotel and bed and breakfast owners. How Tourisme Quebec connects the dots between it receiving $250 from homeowners and tourist safety is anyone’s guess.
What now?
So what’s the real story here? What does the proliferation of apartment rental startups like Airbnb mean for the hotel industry? Should cities continue to fight these companies or should they embrace the apartment-rental trend and just regulate its operation from a distance.
The government in Amsterdam seems to favour option number two, with promising results so far. After a highly-publicized investigation into illegal hotels throughout the city, during which some vacationers were actually kicked out of apartments whose owners did not have rental permits, officials finally admitted that Airbnb isn’t illegal in Amsterdam. In fact, after months of heated deliberation the government has actually legalized short-term holiday rentals in the city, giving residents the right to lease out their homes as long as they do not buy up real-estate just to house visitors continuously and remain respectful to neighbours.
Cities that follow Amsterdam’s example have a lot to gain from businesses like Airbnb. By making travel more affordable, apartment rental companies bring more tourists than ever to these places, which translates into a significant bump in commerce for local businesses. Moreover, because most homeowners don’t live near areas with a high concentration of hotels, it’s unlikely that their offerings will attract a significant number of tourists who would otherwise stay in a four-star tower in the city-centre.
Nobody would argue that smaller hotels, as well as bed and breakfasts’, haven’t struggled to keep up in today’s difficult economy and there’s no doubt that short-term apartment rentals have played some role in this unfortunate reality. That being said, the opportunities and value that companies like Airbnb present to cash-strapped travel enthusiasts make them a godsend in an increasingly expensive world. It will be interesting to see how cities and the hotel industry react to the growing popularity of these businesses, but it’s unlikely that they will enact more laws like those adopted by New York and Quebec. In the era of the sharing economy, forward-looking cities will welcome companies like Airbnb, both to stimulate their tourist industries, and to give born travelers like myself another excuse to start booking off holidays.