airbnb

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Went on airbnb  web site the other day to see what was available in our town of 250 thousand population.  There are 25 airbnb operations to the 10 licensed, health and fire inspected, tax paying Bed and Breakfasts.  And we wonder why it has been an extremely quiet winter.  There are 71 airbnb to the 75 Bed and Breakfasts in the whole province of only 1 million folks.   Grrrr.  I sent the tax man a strong letter and have not heard back.  The city doesn't want to do anything.  Any suggestions.? 

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Now our city has 45 airbnb's to 11 legal b and b's.  Wow.  If the powers that be could force the airbnb company to hand over their membership list, something could be done.  They do say at the beginning of the forms that all members when joining need to have  the legal paperwork done---license, inspections, insurance, tax forms, etc.  So I guess they have covered their butt.  Even our local tourism does not request it but our name and address is right out there in the open for anyone to check.    There are 2 airbnb's out in my municipality so I am going to go to the municipal office and see if they have a license and/or report them.

 

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Hi Charlie,

I hope you and your colleagues don't mind me signing on to this forum. I'm writing a story for BBC Capital about the effect that Airbnb is having on small innkeepers. Would you (or anyone else on this forum) be willing to talk to me about this? I'm particularly interested in speaking with people who live outside the U.S. saraeckel@gmail.com.

Thanks,

Sara Eckel

 

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Let's see... tax evasion would be the biggest issue. Outside of Europe and the US they do not issue income tax paperwork, so they help people hide income.

The clearly know that people aren't doing this legally and evolve to help them hide. It's taxable at the federal level, provincial level, city level (tourism), income tax level and finally property tax level. How much taxable income can you hide?

It also puts people at risk, a building's insurance may be invalid because they are running a commercial enterprise in a residential building. Often condominium buildings have a single policy for the entire building, and the actions of one person can affect the insurance of everyone in the building. Not to mention that here is one person handing out keys to bypass the security of the whole building.... and of course disturb the building, etc.

The other matter is that of rental apartments. Putting these apartments for rent illegally takes rental stock out of the marketplace and puts pressure on rents for everyone.

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Thank you, Jon. Have your business (or anyone else's) been personally affected by Airbnb? I'm looking for someone who can speak about their own experience. Best, Sara

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For me, not really. But then they seem to attract those who would have either otherwise stayed in youth hostels or those looking for apartments, no those who want real service, which is what we provide.

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okay, thanks. Sara

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saraeckel wrote:

Hi Charlie,

I hope you and your colleagues don't mind me signing on to this forum. I'm writing a story for BBC Capital about the effect that Airbnb is having on small innkeepers. Would you (or anyone else on this forum) be willing to talk to me about this? I'm particularly interested in speaking with people who live outside the U.S. saraeckel@gmail.com.

Thanks,

Sara Eckel

 

Small innkeepers. I guess I don't qualify. haha

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okay, you got me: People who run small inns and b&bs, as opposed to large chains.

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05/22/2008

Sorry...I forgot about our Canadian friends...The issue for most of us here is all the places in the US and how they get away with so much under the table.

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Hi, 

The only reason I asked to hear from people outside the U.S. is that I'm writing for an international publication so my story has a wider scope. But I am interested in hearing from Americans as well. 

Thanks,

Sara

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saraeckel wrote:

Hi, 

The only reason I asked to hear from people outside the U.S. is that I'm writing for an international publication so my story has a wider scope. But I am interested in hearing from Americans as well. 

Thanks,

Sara

Sara I suppose the real gripe is that they use the word BnB in their name, are they a B&B for goodness sakes? No, they are a rental, not a BnB. They are a fauxBnB according to the name, i guess. cool

Every location is suffering with the lack of tax revenue that a person may have paid if they stayed at an inspected and approved license lodging choice, hotel, motel, lodge, B&B. 

We actually try to get away from the reputation of "renting out a spare room" as people still have this misconception about B&Bs in the USA. We are professional innkeepers, not setting up a guest in suzie's room with her dollys and pink dresser. LOL 

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My impact is financial. I pay a hefty insurance bill. I pay the Health Dept a hefty fee for a permit to serve food. I am required to pass inspection and abide by all the rules and laws my most intelligent Legislators and the Bureaucrats can manage to come up with. I collect sales tax for the State and pay B & B to my City. I pay to keep my yard looking beautiful and inviting (we are too old and decrepit to do it ourselves these days). I invest in good linens, amenities, wifi, and cable for the pleasure of my guests and serve them a fantastically good breakfast (and send them off with a care package of muffins for something a little extra). I am listed on Air with one room - my budget room - as jut another place to list since if you cannot beat them........I do not think they do squat to enhance the B & B image, rather their whole concept is an undermine.

Just as the hotels and resorts are now advertising "Enjoy the bed and breakfast experience" or "Enjoy a bed and breakfast special getaway". They can afford to undercut my rates and have a far larger budget for marketing. REAL B & Bs are caught in the middle

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in the UK there are very strict fire regulations which all properties which rent out rooms are required to adhere to - Very rarely do  properties bother at it would make them unviable ie fire door on every door, 2 escape routes out, integrated fire alarm and so on - not a lot of change out of $6000 at least to get started - not worth it for the occasional rent a room brigade.

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We once had a property with a guest house we wanted to rent but were not zoned for it.  Talking to the zoning dept., they said "off the record" just do it, but don't advertise because then they would have to enforce.  Maybe you should print out the list of air bnb's with their addresses and submit it in writing to the various local authorities, zoning, health, etc.  see what happens?  Good Luck..  Saw their CEO on CBS this morning....GRRR.   DH says he thinks a big problem is the fact their name has b&b in it.  They are NOT b&b's, unlicensed they are just a place to crash, pulling down the image of b&b's with every bad review. 

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When someone dies at an airBnB rental, the authorities will get excited. Until someone or multiple someones get sued, no one will want to spend the money or the effort to deal with them.

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muirford wrote:

When someone dies at an airBnB rental, the authorities will get excited. Until someone or multiple someones get sued, no one will want to spend the money or the effort to deal with them.

How bizarre. My father said the same thing about another issue, he said "It is like a 4 way stop, they only put one in after more than one person has died."

I agree. No one is willing to do anything unless they have to. It is way too expensive.

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Warning signs, yellow flashers, traffic lights go in after at least 5 or 6 people have been killed at a location OR a family member of a politician or big shot gets killed. One does not count.

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Quote:
Warning signs, yellow flashers, traffic lights go in after at least 5 or 6 people have been killed at a location OR a family member of a politician or big shot gets killed. One does not count.

Preferably shot, or somehow involving an Airplane.

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Here's my view... Being legal is great, but it can also be very cost-prohibitive for the truly "small guys" on AirBnb.

I got my start in a small one-room B&B, back when we were broke and trying to figure out how to make things work paycheck to paycheck. We had dreamed of owning a B&B or a small hotel, but had no clue how we'd get to the point of being able to afford to buy such a place. I heard about AirBnb and got started on there, eventually also getting listed on other sites like B&B.com, Expedia & Travelocity. In my state at that time, thankfully we did not need a business license since we had less than 3 rooms. I did have a sales tax permit and collected and paid the appropriate taxes. It also all got reported on my federal tax return. However, the costs of health and fire inspections and licensing were huge! We couldn't afford to do something like that, especially considering all of the big-ticket changes they would expect us to make that simply didn't make sense for our primary residence. We took the chance and operated anyway, maintaining our own high standards of sanitation and safety. We never had ANY complaints because we took a lot of care to do things right- the way WE would expect if we were staying somewhere. And now, we're in a much better position- doing what we did helped us survive the hard times and gave us the confidence and knowledge we needed to move ahead. 

Of course, not everyone on AirBnb is going to have as high of standards for themselves, and in those situations, those guests should report unsanitary/unsafe conditions to the Health Dept or Fire Marshal. But I think AirBnb for the most part is a good service. Not everyone is going to be comfortable or willing to stay in someone's private home, and those guests will choose to stay at a more established and more costly B&B. But for travelers on a budget or for those looking for a unique or "homely" experience, AirBnb may be a good fit. I think established b&b's need to stop getting so worked up about the threat of AirBnb- it's apples & oranges in most cases! I could never compete with the local luxurious b&b's- and yes, I did have honeymooners too!

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AirBnb is designed for places with 1 room- a guest room, a basement with an air mattress, a treehouse with a cot. It's meant a for "small" places like this! That is what the founders envisioned and that's how it started out. And I see nothing wrong with this at all. I see nothing wrong with such a place operating without all the permits. You've been throwing out at me the costs for all these different things in order to be "legal" in your state. How many rooms do you have? What's your occupancy rate? How much do you charge per night? How much of your income is taken up by those expenses? Obviously, if you're still in business, you can afford it.

My point is, little one room places on AirBnb are not a real threat to B&Bs (and if it's panty parties you're worried about, how often do you actually hear about these happening? And how much of that is an issues with AirBnb vs and issue with a stupid owner that doesn't use good judgement in what kind of business they accept for basically, their "vacation rental". This is different, again, than B&Bs- anyone can make their house into a vacation rental. And this could also happen with places listed on sites like VRBO!)

Anyway, there's really no point in trying to share my point of view, cause  it's not going to change any minds and you're only going to get more upset with me... I'll just bow out now and stand in the little pro-Airbnb corner of the room and hope you don't come running at me with swords. Smiling

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my problem is as well - yes there may be only a very small number of Pantie parties etc but it is what people remember - then when a legitimate BB wants to open they are closed down by the zoning people because this is what people remember happening or have read about in the papers and are terrified of it happening in their area so shut down everything. The number of articles I have read where BB's have been prevented in a residential area as locals are terrified of vagrants, people driving round looking for it or paedophiles (though why rented accommodation should attract them baffles me) Legitimate BB's have it hard enough to get permissions this just makes it worse.

When it is in the paper it is a BB not an air bb that gets the headline and it tars us with the same brush.

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What AirBnB set out to do... I have no problem with. But that isn't what they are doing now. Locally, we know of someone who is using it with shills for $2 million dollars in revenue. That's a lot of undeclared tax.

Even our local government isn't going after the 1 room in a share apartment that does it from time to time. But a whole apartment all the time... that's criminal tax evasion.

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Excuse me. Not coming at you with sword points, just disagreeing with your statement that a 1 room Airb is not a threat to B & Bs. EVERY night of revenue lost truly IS a threat to the existence of legal B &Bs. That is a night of revenue that will not be available to pay my insurance or taxes or marketing. I am NOT  an affluent B & B nor am I personally affluent. Can I afford to pay the licenses and fees required to be legal - hell no, but I find the money because I must to be legal. So we will live on veggie soup and homemade bread for a week or two to make ends meet. Do not assume that because we have a lovely house, decent car, and are active in the community that we are "comfortable". I would go hungry before I would let anyone in this town see that I am broke.

And do not think for one minute things do not happen that could put you in the dumper for lawsuits. I have PERSONALLY been extremely blessed because guests who could have sued did not. One was her own fault - but since when did that stop anyone - and the other one I dropped a casserole in a glass dish that was just out of the oven all over a man's arm. I had to drag him to the sink to run cold water over his arm. Neither of them sued me but they could have. We also had a man miss the last step and land on his knees - so far, so good. Have not heard anything more. Any of these could happen to anyone which is why insurance is such an important thing.

One point you missed - we are not anti Airb, we are anti illegal operators. Airb set itself up in the beginning as an under the radar site and that is why they get flak from us. They truly ARE taking food out of our mouths. I have 3 rooms - if there were 5 illegal operations in my small town I would potentially have no guests as my small town does not get hundreds much less thousands of visitors per year for overnight. However, I am totally on-board with another LEGAL B & B opening in my town - in fact I have been doing everything I can to encourage someone to open one. Willing to help them with marketing and advertising by sharing coats. Everyone on the Forum can attest to that as we have had that discussion over the years.

I offered dinners and routing and many other things to draw guests. I am now doing elopements to increase revenue. When the economy went in the dumper many B &Bs went out of business. Most of us were hurt - when money dries up, travel goes away.

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I am one of those local, luxury B+Bs you talk about.  I also only have 3 accommodations. I am a LEGAL business with inspections, insurance, and license in place, and have been for 25 years.  Our state does not require us to collect the room tax (only those with 4 or more must) but as a full-service B+B we must take and pass the food safety course and pay federal and state tax on our income from the business. We do this knowing full well that it is expensive, but represents the cost of business.

The one other house on our historic street lists on airbnb.  They have the same fabulous location but are not legal. so based on what you are saying, do you think it would be OK for me to just list on airbnb and forget about paying to be a legal business?   And perhaps some friends of mine who want to be doctors could set up a medical practice on airmd to avoid all those nasty fees.  And the sharing economy could have a nice site for lawyers, air law, teachers, aired, and plumbers too, airdrip!   Great...we could all cash in by operating under the local radar.

Sorry....your arguments do not wash with me.

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Around here, people who do it aren't paying their income tax on the money. The money we use to pay for education, welfare, retirement, social programs to help the homeless, single parents, children. They aren't paying their proper share of the property tax. The money we use to pay for the parks, the buses, the street cleaning, the water, the garbage and recycling. They aren't paying their share of the room tax. The money we use to promote the city so people visit here.

So, if you are asking me to not get upset at people who are using more than their share and then not paying their share... yup, I'm upset about it. And worse, because they aren't paying their share, the government needs to get that money from someone else... us, the people who legally pay their taxes. It's theft on the grandest scale, it's theft from everyone else!

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MountainMystery wrote:

I think established b&b's need to stop getting so worked up about the threat of AirBnb- it's apples & oranges in most cases! I could never compete with the local luxurious b&b's- and yes, I did have honeymooners too!

I don't think we are getting worked up, we are sharing news articles where lawbreakers are being brought into the light by local authorities. Some small business owners do not appreciate homes in their neighborhoods hosting people illegally.

All of this comes into play also when someone wants to open a legally licensed B&B, with fire and health inspections and above board. They go before their town or city asking for a variance in zoning, and those there recall the illegal activity in the news of panty parties, trashing homes and more from airBnB which has the letters BnB in it BTW, and so they associate it with us.

There are actually many layers to this this issue. Some apply to diff locations, of course.

If you are here to learn innkeeping from this group, then you should be aware that we do not approve of those who skirt the law in an effort to make money. Most here have worked hard to get where they are today, making many sacrifices, and most work really hard at what they do. Some work two jobs as well as owning and operating a bed and breakfast.

Your viewpoint is valid, I am not saying it is not. But this is an innkeeping forum, so expect most of us to not be pleased with fly-by-night illegal lodgings in their town or city.

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MountainMystery wrote:

Here's my view... Being legal is great, but it can also be very cost-prohibitive for the truly "small guys" on AirBnb.

I got my start in a small one-room B&B, back when we were broke and trying to figure out how to make things work paycheck to paycheck... I heard about AirBnb and got started on there, ... In my state at that time, thankfully we did not need a business license since we had less than 3 rooms. I did have a sales tax permit and collected and paid the appropriate taxes. It also all got reported on my federal tax return. However, the costs of health and fire inspections and licensing were huge! We couldn't afford to do something like that, especially considering all of the big-ticket changes they would expect us to make that simply didn't make sense for our primary residence. We took the chance and operated anyway, ...

Mtn M, I get your need for additional income ALL of us with B&B's were/are out for the same.  You bring up the point you did not need a business license but did have a sales tax permit.  I can not fathom how a state/county/local gov. would provide someone with a tax permit without a business to have reason to collect the tax!  (My area is opposite, 1 -2 room B&B's do not need to collect tax, but they must be licensed)

UNFORTUNATELY being in business comes at a price.  I agree that cost of inspections are high and maybe gov. could cut some of the costs for small business BUT it is what it takes to be LEGAL!  Those of us that PAID feel ripped off because the likes of those that are SKIRTING the law.  

Just where should they draw the line?  I consider my 5 room B&B a 'small-guy' business.  I still went through the hurdles to become LEGAL because that is what someone who really wants to be in business does! 

Having a legal business tells potential customers "Hey, you can feel comfortable booking with us, we will be here when you arrive"  What the likes of the non-licensed (like Airbnb listings) have done is make some hesitant to book with any of us.  Lots more skeptical people now.  

And then let's talk about your homeowner's insurance.  Did you know that IF one of your paying guests gets injured while on your property your regular homeowner's insurance will NOT cover their injury!  This is a FACT!

Seeing as how you were 'broke' just how would you have covered their bills?  Pay for a lawyer to defend you? Your mortgage company could call in your loan by not having adequate insurance or if there are rental clauses, how would you handle that?   

These are the things that Airbnb do not tell you!
 

 

 

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you are not getting our side of the argument - we could be cheaper but have to pay out for all the things ie

I have to pay for my fire alarm to be serviced every year $500

Fire extinguishers to be services and replaced $300

Liability insurance - $1600

Fire door on every door - $5000 - doors and man to fit (at least)

Fire safety level beds - about $200 more expensive than standard

Pat testing - I am lucky as my dad is an electrical engineer but this would cost me $300 a year

Im due for an upgrade on my fire alarm that's another $6000 at least

So you tell me you wouldn't resent paying all that out to operate safely and legally to have someone undercut you that doesn't?

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To me, this all illegal thing is not really air's fault. They propose a fabulous service and, contrary to most operators (Booking.com first), they try mostly to use real world respectful and human methods, first of all by showing that their service have a cost that has to be paid by visitors. This is so much better than Booking and others "no booking fees".

We are also on air but do not suffer from this yet. I agree that there seems to be a lot of tax evasion there, but this is the mostly the problem of dishonest citizens and of the big failure of the legal/political systems who are unable to create a simple easy to understand/apply/enforce legal framework.

Just another sign that times/technologies are changing too fast and institutions fail to adjust as fast as needed. Air is growing fast and will likely surpass the likes of Booking, Expedia, is a short time. Get ready.

Booking is already listing them as their 3rd biggest competitor, just after Expedia & TripA.

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Really? So when the government asks them for the names and addresses of the businesses listed and they refuse, it's who's fault? When the people paid don't pay their income taxes because AirBnB doesn't send them out the required legal tax forms when they aren't incorporated, it's who's fault?

When you register your property, you give AirBnB the location. They could ask if you are registered with the local authorities. If you mark "breakfast" they could ask if you have a licence to serve food.

We have 75 legal properties in this city and over 2000 illegal properties. Most of which not only don't have their licence but also aren't paying their fair share of income taxes, property taxes, VAT and such. AirBnB could make it easier for the legal businesses that need to collect VAT but instead make it easier for those who are illegal to not collect it.

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I guess my view is biaised by the fact that I am In France and do not know much about your legal system. Note also that I also fully declare all my business and pay all taxes. As such, I also suffer from all those acting illegally and am also concerned.

It seems that it was the courts that ordered air to give NY guests records, not the Government nor any laws. Not sure there was any law that required air to give them away. If that is the case, why would they have to give data that their clients (hosts) did not agree to give away...

I feel that the responsability to declare its business & profits lies on the business owner, not on the plateform distributing it. Should the classified or all the directories on which we are listed check if we follow the law ? Should law enforcement be performed by businesses you deal with ?

All other directories must be worried at seeing air collecting taxes. Even Bookin.com is not collecting taxes on our behalf. Are we going to a situation where taxes have to be paid differently depending on the booking provider ? When booking direct, I pay myself to the tax office, when airb, through airb,... Crazy.

Official law enforcement need to adjust to this new environment. Checking air owners is not difficult. Just place a booking and you'll get the details. Bookings can be cancelled. Make appropriate & simple regulations, arrange for painful fines and use medias to communicate. At the moment, laws/law enforcement are mostly letting it happen. At the moment, when you loose business, they also loose taxes. This enforcement should be profitable.

On the other side, I agree that air could do a little more to inform owners. But regulations are such a mess! Cities, states, countries,...

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to be fair to air - if they roll out all over to collect the relevant taxes and pay them - it will motivate people to join and be legitimate ie people who couldn't face that accounting or hate doing it now - won't have to.

For me in the UK the only tax I have to pay in that way would be VAT which we pay as 10% of turnover but its only over a certain limit (I think its £78,000) so how would air know when you had reached the limit and start collecting the tax? tricky that one. You do have to register for VAT ie when you know you will be over the limit so perhaps they could add that to the questions ie do you have a VAT registration number, This is also key for business travellers as they can claim the VAT back at %20 which is a big saving on their bills.

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Our minimum is $30K, for the VAT but $0 for the room tax, so they have to collect and pay that. But if they aren't incorporated, they need to declare the income on their income tax. It also can change the legal status of the home, including the deductibility of the capital gains. (Not to mention that their mortgage and home insurance are in default.)

The government around here is discussing the requirement to post your registration number for your establishment on all lists, so if you don't, the presumption is that you aren't registered.

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Our government (I am also in the US) has been legally persuing the problem and going after the tax cheaters. While AirBnB tries to make it seem like this is little guys, they have found that there are major companies using AirBnB to hide money from the tax authorities here and they use employees as shills for the rentals. In other words, it's not really a sharing economy, per se, it's big shady business hiding as if it is the sharing economy. And AirBnB not only refuses to provide government with the information, they keep on changing their web page to help people hide. They used to tell you how many listings, now they hide that as well... because they want to hide it from the government here that is looking to get their tax money.

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I think that's the main problem - ie if you are on bookin in g etc you give your full address and its there for the world to see - easy for authorities to check up any time

Air - doesn't and doesn't even give it up when asked - all they would have to do to get rid of most of their problems is to put in the terms and conditions "we will give your location to tax authorities or council inspectors if asked in relevant situations" - problem solved

the others don't check squat - but the info is there for councils etc to do so

 

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People stay at our B&B because they want a special experience.  Can you imagine anyone staying at an airB&B to celebrate an anniversary?

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Higgins House wrote:

People stay at our B&B because they want a special experience.  Can you imagine anyone staying at an airB&B to celebrate an anniversary?

Absolutely. We have many high end locations here on Airbnb starting at $200 a night and they give their guests free wine (illegal without an ABC license) and rent them their card, and organize cocktail parties for them (I'm sure that's illegal since I can't do it with my license) etc etc etc.

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You are making the mistake of thinking its all the couch surfing crowd - some of the complete apartments are really lush!

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Joey Camb wrote:

You are making the mistake of thinking its all the couch surfing crowd - some of the complete apartments are really lush!

I agree. I have seen amazing places on AirBnB that I wanted to visit!

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Hello Charlie May

I am guessing you live in Regina????

We agree with everything you said.   We also hate airbnb and we also had a slower than normal off season.   I think all the licensed, insured b and b's in your city should ban together and go to the next city council meeting.  There seem to be just as many listed on kijiji (they don't have to pay the commission) as on airbnb.

 

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Hi Mini      I am near Saskatoon about 10 miles out.  I can't get the town B and B's motivated to do anything yet we meet periodically for lunch and have fun.  And you can imagine what we talk about----from great guests to unbelievable guests.!.  How late we will stay up and wait or what we serve etc.......     Where are you?

 

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Hi Charley

email me offline if you like.

We are in your province.   

Como Depot's picture
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06/25/2008

http://www.theguardian.com/world/2014/apr/21/airbnb-new-york-attorney-ge...

I can not help but think that NY would not be making all this fuss unless there were political donors in the background wanting it so.

I am in the US and quite a few things mentioned I do not have to do. And there may be things I do have to do that others do not.

I also do not think bnb bit is appropriate.

When it comes to it they are no different to say Expedia, they are a booking service. Does anybody expect Expedia to be conversant with all the local requirements through out the world that its Hotels etc have to comply with. Or Craiglist, Or...

As the properties and contact details are on the Airbnb site, looks to me that NY is just being lazy.

Joey Camb's picture
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04/02/2010

the argument is on boo king expe dia etc the give an exact street address - officials where I am could print out a list and go check

There is now 1 room in my town which is probably illegal - so have tried to find out the address - it gives me a vague location - not an address unless I book, I could probably find it if I walked round the area as there Is an outside shot but it would take quite a bit of doing and not all properties put on an outside shot either.

Generic's picture
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02/24/2011

Google Streetview is your friend Smiling No walking needed. 

Joey Camb's picture
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My point being it would take me probably about 2 hours to find this specific house - if it was a flat in a block of 40 what would you do? or one without an outside photo?

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11/27/2010

You may as well search in Ggle image the picture of the host. Just drag & drop the host picture in the search field of google image. Using Chrome might be better (Ggle will like it as well).

Joey Camb's picture
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we are a bit lucky in the UK - anyone saying they are a BB I can report to the fire people and they don't mess about

Arks's picture
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05/22/2010

Joey Camb wrote:

we are a bit lucky in the UK - anyone saying they are a BB...

Just curious, do most people listed with airbb serve breakfast? ARE they a b&B, or just bed?

__________________

All saints can do miracles, but few of them can keep hotel. ~ Mark Twain

 

Joey Camb's picture
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04/02/2010

where I am its B&B as only B&B's are using it - same for the next town over I think

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