By Danny King
Home-based vacation rental service Airbnb
set a date to start paying hotel room occupancy taxes in its home city, San Francisco,
shortly after an investment bank issued a
report estimating that the company’s bookings would reach about $2 billion this year.
Privately held Airbnb, which already collects hotel taxes on behalf of its Portland,
Ore., hosts, will do the same in San Francisco starting next
month, the company revealed in a
Sept. 17 blog post.
For stays starting
Oct. 1, Airbnb will
add a line item on
its receipts to indicate how much each
guest will pay in San
“In the past, it’s
been difficult for individual hosts to pay
taxes that were designed for traditional ho-
tels that operate year-round,” David Owen,
Airbnb’s regional head of public policy,
wrote in the blog post. “This has been a
complicated issue, and we’re happy to be
taking action to help simplify the collec-
Coincidentally, Airbnb announced a
date to begin remitting taxes five days after
Zurich-based UBS released a report esti-
mating that the company, which does not
release financial figures, will generate about
$200 million in revenue from about $2 bil-
lion in bookings this year. Those figures
have jumped by a factor of about seven in
the past three years as Airbnb’s number of
guests and host listings surged to about 8
million and 800,000 a year, respectively.
By comparison, online travel agency
Orbitz last year generated $294.2 million
in revenue from standalone hotel book-
ings. As for hotels,
al generated $743
million in revenue
from its more than
500,000 rooms last
year, while fran-
Hotel Group gener-
ated $1.03 billion in
revenue from about
And those fran-
chisers of moderately priced hotel rooms
are an appropriate comparison because
that sector is most likely to feel the impact
of Airbnb’s continued growth, according to
Last week, San Francisco city officials
discussed potential policies that would “
legalize” Airbnb rentals (short-term home
rentals are technically illegal), though no
policies were finalized.
Meanwhile, earlier this month, a coali-
tion that includes New York hotel own-
ers, city officials and housing advocates
launched a campaign called Share Better.
“Airbnb enables New York City tenants
to break the law and potentially violate
their leases, it exacerbates the affordable
housing crisis in our neighborhoods, and
it poses serious public safety concerns for
Airbnb guests, hosts and their neighbors,”
the coalition asserts on its website.
Such campaigns further illustrate that
while Airbnb says it’s filling a void, many
other entities believe the additional accom-
modations supply amount to a zero-sum
game. For example, UBS estimated that for
every 20% increase in a city’s Airbnb list-
ings, the city’s hotel revenue falls about 1 %.
“We think Airbnb and shared accommodation in general will have an ongoing
negative impact on the lodging industry,”
wrote UBS analyst and report author Jar-rod Castle. He estimated that Airbnb’s
hosts boost room supply in cities such as
San Francisco and New York by 3% to 5%.
Airbnb to pay occupancy taxes in San Francisco starting Oct. 1
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By Danny King
Expedia, which last year started a trial program listing 10,000 HomeAway vacation-rental properties, expanded that number
to more than 115,000 listings on its U.S.
Additionally, vacation-rental owners
will be able to advertise on Expedia under
the expanded agreement. Property owners will pay the same 10% commission to
HomeAway for bookings through Expedia
as they would through bookings through
Expedia, the most popular online travel
agency among Americans, is looking to
benefit further from the rapid growth in
nontraditional accommodations bookings
listed by companies such as publicly traded
HomeAway and privately held Airbnb. Home-
Away’s revenue jumped 24% last year, to
$346.5 million. Airbnb, which doesn’t dis-
close financial figures, has boosted both
listings and guest count by about sevenfold
during the past three years, and its revenue
will reach about $200 million this year, ac-
cording to a recent UBS report.
HomeAway hosts who opt into the company’s expanded distribution network will
have their homes listed under the “private
home” category of lodging styles listed on
Expedia. Additionally, Expedia’s search
functionality will be adjusted so that HomeAway listings will pop up for queries for
larger groups and longer stays.
Expedia started listing 10,000 HomeAway properties on its U.S. site as a pilot
program last October.
A San Francisco property listed on Airbnb. The rental service
will begin paying hotel occupancy taxes in the city next month.