AirBnB, a Great Idea that Government Will Attempt to Shut Down
Airbnb —which derives its name from the concept of an air mattress bed and breakfast— is an online marketplace where travelers looking to book anything from a couch to an entire home (or even a private island) are connected with renters and homeowners who have extra space to rent out. Having launched less than four years ago, the burgeoning company was valued last summer at over $1 billion when it featured accommodations in a few dozen cities and a handful of countries. Today, airbnb boasts offerings in 19,732 cities in 192 countries.
Here's how it works from a traveler's point of view:
Depending on your own disposition, you'll either find the concept intriguing or creepy. Local governments, on the other hand, see the business as a threat to power and revenues. For one, airbnb allows property owners and leasers to skirt around rent control laws in big cities by renting out (or subletting) rooms at market value. For another, individuals involved in an airbnb transaction completely avoid paying and collecting bed or hotel taxes, thereby depriving the city of a major source of tourist revenue. And actual hoteliers can't be fans of airbnb either — not only are they stuck paying hotel taxes (which are likely to go up as city governments look for ways to cover revenue shortfalls), but growth of airbnb has the potential to drag down demand for actual hotel rooms.
As the company expands, expect more bills like New York's Illegal Hotels Rule which the state legislature passed into law in 2010. Ostensibly created to "protect tenants, tourists and our affordable housing stock," the law makes it much more difficult to rent out rooms for a period less than 30 days.