Is Airbnb headed for trouble?

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One of the biggest changes to travel in the past 30 years has been the incredible spread of the internet. These days, there are online services to cover almost every aspect of travel: e-mail, Skype, travel booking sites, Google Maps, Tripadvisor … But perhaps the most revolutionary of all are the rent-by-owner sites — most famously Airbnb.

These sites offer a whole new class of accommodation: rooms or whole apartments whose owners have decided to rent them out by the day or week to earn a few extra bucks, or euros, or zlotys. They’ve provided another affordable option for travellers, and you could argue they’ve ushered in a whole new era of “citizen commerce” in the travel business. But a good look at some recent events makes you ask one question: is Airbnb headed for trouble?

Many of us were shocked by an eye-opening story from Calgary, Alberta, where an unsuspecting couple rented their House damagehouse to four people for the weekend. The renters moved in on Saturday — and so did a party bus full of people who launched a wild, weekend-long party that left the home a disaster zone.

Police found broken furniture, condiments smeared on the walls, shattered glass, cigarette butts,  garbage strewn on the floor — not to mention the bodily fluids splattered here and there. Damages were pegged somewhere between $50,000 and $75,000.

The same day, Quebec’s tourism minister said he was considering imposing taxes on Airbnb hosts to level the playing field with conventional hotel and B&B owners, who are subject to a list of taxes and regulations Airbnb currently escapes. One longtime B&B owner complained he just couldn’t match the rates offered by the online hosts. (Update: Quebec has since confirmed it will legalize Airbnb hosting while imposing taxes and increasing supervision.)

These are just the most recent dispatches from a longstanding clash between Airbnb and the authorities. New York City has been concerned about the service for years, and finally established a task force to look into illegal renters. It’s against the law to rent a home for less than 30 days in New York unless the owner is present, but an investigation by the state Attorney-General found that three-quarters of the listings in the city are in violation.

That’s not to say Airbnb is a bad thing. In its six-and-a-half years of existence, it’s made travel more affordable for thousands, if not millions, of travellers. I’ve used it myself. And for budget travellers like my colleague Marie-France, it’s abedroom detail welcome alternative to hostels or fleabag hotels (photos at right and at top by Marie-France Roy, bigtravelnut.com). As well, it puts a few dollars in the pockets of homeowners who might be pressed to cover the cost of living in expensive cities.

But Airbnb and the other “for rent by owner” sites like Wimdu and VRBO have always skated a fine line between free market and black market. True, they offer an alternative on the hotel market, but at the same time they’re operating outside the industry mainstream — and often outside government regulations.

And while the majority of them may operate with no problem, there’s no denying that in most cases, people are using their homes for purposes they weren’t meant for, and may not be equipped for. That’s particularly true in the case of apartments and condominiums.

A few years ago my own condo building faced the issue when a few owners began renting out their apartments for short stays. People started arriving at all hours with their luggage, and then showing up at the security desk asking for things like light bulbs and toilet paper. They also abused the common facilities, kicking soccer balls around the rooftop deck and causing damage.

In the end, a court ruling put an end to the practice. But recently a notice came through the door warning owners not to rent their units during the Pan Am Games, scheduled for Toronto this summer. And I was just as happy about it.

Airbnb and the other rent-by-owner services aren’t a unique case — they’re part of a larger trend that includes Uber, the rapidly New York cab expanding ride-sharing service. It does a real service by letting people use their phones to find the nearest taxi to get them to their destination. But at the same time, it allows people to offer rides in their own private cars, sending thousands of unlicensed “cab drivers” out into the streets without any of the usual regulations and controls.

And those regulations and controls are there for a reason. They prevent businesses from exposing the public to dangers like bad sanitation, rooms with no fire exits and bad drivers operating unsafe vehicles. And they protect neighbours and other drivers from nuisances caused by businesses doing things they aren’t supposed to be doing.

Now there are sites like Eatwith, which allow people to have strangers come and eat dinner at their house, for a price — kind of like paid dinner parties for foodies. Again, sounds like fun, but who inspects the kitchen to make sure it’s up to proper sanitary standards?

In the end, I’m still a fan of Airbnb and the other citizen commerce travel services. But I think they’re still a work in progress. Up until now, they’ve been operating in a dark area where there are no specific  laws to govern what they do. That’s not likely to last forever, and when governments get around to addressing them, things will change.

I doubt that the rent-by-owner sites will pull the plug and stop operating. My guess is that they’ll change the way they do business. They’ll impose new standards and regulations on their hosts, maybe demand a bigger damage deposit fromhotel bed renters. And they’ll look for a way to compromise with governments so they can continue to operate without legal problems.

That may make things safer for everyone. It may also raise the price of the services: regulation comes with a cost. And strict regulation keeps some people out of the market completely, potentially cutting down the amount of choice for users.

But the people who started Airbnb, Uber and all the other citizen commerce sites are nothing if not inventive: after all, that’s how they started their businesses. I have no doubt they’ll be able to adapt to whatever challenges they face — and probably come up with new and even more revolutionary services to boot. That’s what creators do.

I’m interested to see how the whole trend evolves. And in the meantime, I’m still open to using Airbnb or other similar sites to save a few dollars on accommodation. But I won’t be throwing any wild parties when I get there.

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About Author

Paul Marshman is a retired journalist who spent 30 years as a writer and editor on Canadian newspapers, while travelling to the ends of the earth. Now he continues to travel while passing on his travel experiences to you.

4 Comments

  1. Having just returned from a few days in Niagara on the Lake, we rented an entire home for much less than a sterile hotel away from town or a bed and breakfast giving us only a small but cozy bedroom. I used airbnb for the first time and was pleased as could be that the home was exactly as described and thereby, the experience was wonderful. I have submit my “rating” and hope for good comments in return.
    Next week, we are off to Nova Scotia and again are using airbnb. I hope it is what it displays and will be sure to let you know if the experience is a negative one.
    So far so great!

    • Good to hear, Pam. I had a good experience with my first Airbnb rental as well, and I’m sure most rentals go well. The problem is that some of them may not be legal, and local governments may decide to take action at some point. I hope they make some kind of accommodation so these deals can continue.

  2. Great article Paul. Here’s hoping Airbnb and the other great innovative sharing ideas you mention are here to stay.
    Recently back from a couple of weeks touring Italy and we could not have been happier with our Airbnb experience, our hosts were amazing, all 3 of them. The money saved on accommodations alone allowed us to do and see more than we probably could have, and we stayed in some very cool places (apartment overlooking a piazza in Rome, a view of Tuscan vineyards from our medieval stay in Montepulciano and our breathtaking seaside view for a week in Porto Santo Stefano).
    I realize it’s a big shock to the hotel industry but maybe it’s time they stop overcharging for what they offer. I particularly like your “citizen commerce” statement, change is coming.

    • Thanks for commenting, Brad. Glad your Airbnb experiences turned out well, as I’m sure most do. In fact, I’ve booked an Airbnb apartment in Montreal for an upcoming trip. I always wonder, though, what the neighbours think about it …

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