DIY B&B with Airbnb

Airbnb has over 2000 listings in Nice but is there a hidden cost for a bargain bed?

As I write, Airbnb Inc – the website that “connects people with rooms to share with people who need a place to stay” – is in front of New York’s Supreme Court defending its right to legally operate. New York State attorney general Eric T. Schneiderman claimed nearly two-thirds of Airbnb’s listings were illegal sublets and was hoping to “recover millions of dollars in unpaid taxes”.

At the same time, the company, which was founded in 2008, has been valued at $10 billion USD, more than well-known chains like Hyatt.

I heard about Airbnb at a dinner party. I couldn’t understand why anyone would opt to spend a night in a stranger’s house (sharing a bathroom!), nor could I see the appeal of renting a room in your home via the internet to someone you’ve never met.

Also, how does a host ensure safety, pay the hotel tax or declare income?

After a little digging, I think that – other than my husband, thankfully – I am alone in raising an eyebrow at this system. “Air mattress B&B” is successful in 17,000 cities in 192 countries.

Guests at Airbnb Home away from home:
Airbnb guests like Joe from Arizona use the site to experience local colour.
Photo: Terry Cooper

Tim MacDonald, VP of a company that runs a business travel and expense system with more than 22 million worldwide users, told CNBC that “Airbnb has an eye-popping rate of growth that is exploding onto expense reports… We’re seeing Airbnb going from zero two years ago to $1 million this quarter.”

In November 2013 a New York Times article quoted three Airbnb hosts, ordinary people looking to supplement their income, who claimed to make $10,000 a year; $90,000 a year; and $2,000 per month.

As a member of this online rental marketplace, you can either be a “host”, or a “guest”. A host lists for free a property – a single room to a suite, a moored yacht to a castle (there are 640 listed) – promoting it with photos, seductive blurbs, languages spoken and price, which is up to a host’s discretion.

Guests can search the Airbnb database using key words. You don’t have to be a member to look, but you do have to be one to “Book it”. All major credit cards are accepted, as is PayPal, and the payment goes directly to Airbnb who then transfers the fees to the host.

There are a few points of concern. Hosts must recognise that although Airbnb provides up to a million dollars protection in damages, their policy does not cover cash, jewellery, pets, collectibles or personal liability. Also, hosts must abide by local laws, such as in New York which prohibits subletting an apartment or room for fewer than 30 days if you aren’t living there. But who enforces these laws when everything is registered online?

This leads us to headlines like in the New York Post in Apri 2014l: “Hookers Turning Airbnb Apartments Into Brothels.”

“It’s more discreet and much cheaper than The Waldorf,” a sex worker told the daily. “[They] probably save $200 to $300 a night … It’s really good for business.”

In Nice, we spoke with Michel Tschann, President of the Hotelier Union for Nice-Côte d’Azur. “Airbnb is a new form of competition and that is healthy: we all need competition,” he said. “The difficulty is that apartment owners do not pay the same taxes as hotels do, and very often they are not even declared. They have no regulations for safety or the handicapped, pay no city tax .... and so the competition becomes unfair.”

Sarah, a full-time Nice resident since 2008, rents her second bedroom on Airbnb. “It’s free to sign up. You create a profile, decide on a rate, and post some pictures – they provide a professional photographer for free.

“I’ve never had any problems but then you get a real feel from the potential renter through email exchanges.

“You have to enjoy people to do this and you’ll meet some wonderful visitors. When I started with Airbnb, it was so easy that I encouraged five friends to come on board but now there are 2000 rentals in Nice and the market is saturated.”

And what about the critics? “I pay 5 per cent of each rental to Airbnb. The vast majority of us are renting extra space to survive. We don’t want to do it but it’s bet-ter than going on the dole, right?”

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