Airbnb commercial operators skirting taxes: hotel group

TORONTO • Most of Airbnb’s revenue comes from people renting entire homes they don’t live in, according to a study, which suggested “hosts” are getting a tax break compared with the traditional lodging industry.

A study released Wednesday by real estate company CBRE, and commissioned by Ottawa-based Hotel Association of Canada, which represents more than 8,000 hotels, motels and resorts, says 83 per cent of Airbnb’s total revenue comes from hosts renting entire homes where the owner is not present.

“That’s people who are renting multiple homes or multiple units across the city. They are really running a business and because they are running it through a platform they are able to skirt the rules,” said Susie Grynol, president of the association.

The study looked at a 12-month period from April, 2016, to March, 2017, and found there about 70,000 Airbnb host owners with more than 100,500 listings in Canada that generated $500 million in revenue. The number of Airbnb hosts, units and revenue has nearly doubled over the past year.

About 70 per cent of units listed on the Airbnb platform in Canada are entire home rentals — guests have complete and sole access to the entire unit during their stay, according to the researchers. Hosts renting out two or more entire-home units generated more than $238 million in revenue in the past two years. Based on the past 12-month period, multi-unit hosts make up seven per cent of all Airbnb hosts in Canada and account for 19 per cent of units and more than 30 per cent of the revenue generated.

“What we are shining a light on here is the increase and the dramatic growth in commercial activity and calling on the government at all levels to level the playing field,” Grynol said.

Airbnb cast doubt on some of the data in the report. “The big corporate hotels are at it again, peddling lies about home-sharing to protect their ability to pricegouge consumers, and preserve antiquated business models,” said Lindsey Scully, spokesperson for Airbnb.

“Vacation rentals have always been an important part of Canada’s tourism economy. Today, regular people in communities large and small are making some extra money sharing their space, too — but the hotels have made it clear they won’t back down until they eliminate their competition.”

The CBRE data was created from the analytics platform AirDNA which scrapes data from the Airbnb website. Airbnb’s Scully said AirDNA is “known for faulty data.”

At the core of the dispute is a complaint about an uneven tax structure. One of major tax disadvantages the hotel industry faces is the harmonized sales tax, which is not applied to Airbnb rentals.