A local rise in popularity for the homestay network Airbnb has some of Mobile’s more traditional bed-and-breakfast owners concerned over the fairness of competition.
Wendy James, owner of the Kate Shepard House in Midtown, said Airbnb has had a negative impact on her bookings as the site’s popularity continues to grow. She said her B&B has maybe 10 reservations for November.
“It’s phenomenal how it has affected our business,” she said. “We’ve never seen anything like it. Bookings are down bigtime.”
The site currently has 125 rentals listed in Mobile County. Fifty-six of the listings are for entire homes, with prices ranging from $60 to $125 per night. The number of rentals alone is up from last year, James said.
The Kate Shepard House and other B&Bs struggle to compete with Airbnb prices, James said. For instance, at her place one room will cost you $150 per night.
“Why would you come here for $125 per night when you can get an entire house for $160 a few streets down?” she asked.
James said she loves the website and uses it to draw people to her business. She added, though, that the while Airbnb pays taxes to the state, local lodging taxes are not paid.
“We get wonderful guests from Airbnb,” she said. “I’m not against Airbnb. It’s a wonderful platform where we can all get international guests.”
The problem, James said, is that Airbnb is not treated like a business locally and is given an unfair advantage.
“This issue is not just about an unfair advantage over existing law-abiding small businesses. It is a problem that is coming to a house near you,” James wrote in an email.
Mobile’s Executive Director of Finance Paul Wesch said the city can compel those who offer up their homes on Airbnb to pay taxes, but they’re not always easy to find. Right now, Wesch said, people can pay the tax voluntarily.
Mobile County does collect a 2-percent lodging tax on local Airbnb hosts, as well as a state business license fee, Deputy License Commissioner Adam Bourne said. For Airbnb hosts with less than five beds, the license fee is $22.50 per year, he said. A portion of the 2 percent tax is distributed to the city, he said.
Bourne said the fees and taxes are hard to enforce right now. He said the office does actively search for Airbnb hosts, but they don’t have many currently participating in the tax and fee collection.
Mobile County Commission President Jerry Carl added that since addresses aren’t accessible until after a room is booked, it is almost impossible to track.
Stephen Flasaerud, owner of the Berney/Fly Bed and Breakfast on Government Street, agrees, although he said he doesn’t mind the competition.
“I do believe Airbnb hosts should have a business license and the council should put ordinances in place like they did for Uber,” he said.
The city amended its vehicle-for-hire ordinance July 2015 to allow the ride-hailing application Uber to operate on city streets. Much like Airbnb does for private residences, Uber allows drivers to use their personal cars as a taxi service.
The vote in favor of the amendment came after weeks of back-and-forth between representatives of Uber and Mobile Bay Transportation. In the end, the ordinance tightened regulations on Uber and loosened some on the taxi service to give both the same level of scrutiny. For instance, instead of regulating the fare cab drivers can charge, the amended ordinance allowed them to change their rates, similar to the way Uber does it, as long as the passenger knows about the pricing change up front. Uber drivers in Mobile also must use decals to differentiate them from shuttle services.
The city also streamlined the safety requirements for both types of entities.
Kelly Baker, a DeTonti Square resident and former Airbnb host, said she rented out part of her home when she needed extra money, but doesn’t anymore.
“It was really good for me while I did it,” she said. “It was extra income when I needed it.”
Baker doesn’t believe more regulation would help anyone.
“I don’t want the city to get involved in it,” she said. “It would ruin it for everybody.”
The site, Baker said, gives visitors a more personal view of the city than staying in a hotel would. It offers something hotels can’t.
“I don’t think it’s unfair,” Baker said. “There are still a lot of people who stay in hotels. It doesn’t affect them.”
She said the site offered great benefits for visitors staying in her home. For instance, visitors could stay in a historic part of town and still be able to walk to the entertainment district.
Kent Blackinton, president of the Mobile Area Lodging Association, admitted Airbnb is not a big concern yet for hoteliers in the area, but it’s an issue that is on their radar.
“There have been no meaningful discussions on it,” Blackinton said. “We’ll look at it more closely in 2017.”
He said he isn’t sure Airbnb is popular enough in the area yet to negatively impact hotels.
Regardless of the site’s impact on hotels, Councilman Levon Manzie has heard enough complaints from B&B owners that he and Mayor Sandy Stimpson’s administration are looking at possibly introducing ordinances on Airbnb in the near future. The ordinances would allow Airbnb to operate but ensure they don’t have an unfair advantage, Manzie said.
“I’m sensitive to the concerns because the bulk of the bed-and-breakfast businesses are in District 2,” he said, noting other cities have regulated Airbnb and Mobile would hopefully be able to “replicate their success.”