Hosts with(out) the most
Airbnb has revolutionised the accommodation industry, but who is it really benefiting?
Ihave finally succumbed to signing up to Airbnb – not for any reason besides research, you understand. And it has been an education: as a “host” (Airbnb’s term for someone who lets out their house or rooms) I’m expected to be an upright citizen who offers great experiences in my home.
Having completed the registration process, I come to the exciting part. A room in my London house can go for anywhere between £60 and £85 a night and, at peak demand time, a handsome £245. For that amount, you’d think I was annexed to the Dorchester.
The website is very persuasive and I feel as if I am joining a world of like-minded individuals. I am encouraged to not only accommodate my guests, but also to think up “experiences” I might share with them. Commission rates are not too bad for the host; Airbnb generally charges 3 per cent for accommodation and 20 per cent for any activities that the host sells to a guest. But Airbnb takes a further commission of up to 20 per cent from the guest for the room.
I’m wondering what my wife will make of all this as she entertain our first lodgers with a pottery class in the garden while I wash the sheets, change the towels and clean the bedroom. Never let it be said that we are not an equal opportunity household. A quick calculation suggests that in some cases Airbnb is taking close to a quarter of the total charge a guest has to pay, just for providing a website platform.
AIRBNB FOR BUSINESS
Building on what seems to be a runaway gravy train, Airbnb has created a new feature for companies arranging business travel. Any enterprise may now nominate a responsible person to book, pay, amend or cancel corporate travel. This advance has helped to widen the market for Airbnb, but it is a case of caveat emptor (buyer beware).
The legal responsibilities for health and safety during an employee’s stay depends upon the landlord of a property taking the risk. Airbnb does insure its hosts for accidental damage but there are no guarantees for the traveller. The only precaution a consumer can take is to read the reviews.
Where infringements to what is advertised occur, or where there are flagrant disparities between what is offered and what is experienced, Airbnb undertakes to look at complaints, but not to fight your case in the courts. “Hosts” are presumed to be good citizens and to adhere to the local law. So if, say, a traveller visits an Airbnb in a country that’s off the beaten track and subsequently finds pictures of themselves relaxing in the spa bath online, it can be difficult to resolve. Airbnb expects hosts to declare if they have hidden cameras, but has no teeth to take action beyond offering a refund and blacklisting the landlord. For a company that books its employees into problematic
Airbnb accommodation, that may mean its personnel seeks redress from them.
While the number of Airbnb travellers grows, it is the hotels in prime Airbnb locations that miss out. They have to conform to a whole set of different rules and government legislation to offer accommodation. Kitchens are health checked, rooms are graded and insurances all in place. Security is always on hand and staff are there to help. For the guests, the legal position is much clearer. They are assured of what they are going to get, with no need to worry about who last slept in the sheets or where a spare toilet roll is at a critical moment.
Those with a sense of the common good will also be alarmed to know that, while they paid their fair share of tax, Airbnb paid less than £200,000 in UK corporation tax in the 2016-17 tax year, despite collecting £657 million of rental payments for property owners. The commissions the company earns in the UK are booked by its Irish subsidiary, but it also has two UK subsidiaries. One unit made a pre-tax profit, but the other did not incur UK corporation tax because deductions resulted in a loss.
The good news is that the governments of France, Germany and Spain have taken some action to tighten the legislation for Airbnb and landlords, which has been partly emulated in the UK. Hosts are no longer allowed to claim tax relief where they are not resident in their premises at the time of letting.
Meanwhile, I’ve spruced up my spare room, had an extra set of keys made and locked up the silver. Not because of Airbnb guests; we’ve got family members coming to stay and you can’t be too careful.
In some cases Airbnb is taking close to a quarter of the total charge a guest has to pay