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Growth of 'Sharing Economy' Concerns Local Innkeepers
By Stephen Dravis, iBerkshires Staff
03:17AM / Monday, June 06, 2016
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A screen capture from Airbnb taken Friday, June 3, shows a number of lodging options at private residences in Williamstown.

WILLIAMSTOWN, Mass. — Website Airbnb.com tells travelers, "Don't go there. Live there," in a series of ubiquitous television ads.

But people who live with the rules, regulations and taxes that come with operating a traditional lodging establishment are not sure people who rent their homes in the "sharing economy" are using a level playing field.

"As far as I'm concerned, it's a fad," said Daniel Gangemi, the owner of the Birches at Steep Acres Farm, a bed and breakfast two miles from Williams College.

But it is a fad with serious consequences to small-business operators like Gangemi, he said.

"I've been doing this for 16 years," he said. "Before that, my parents were doing it for 27 years. The last few years, it's cut back tremendously. While this fad is going on, you have businesses like mine that have to keep their rooms.

"In Berkshire County, there is not a lot of tourism in winter. If this fad goes on and these hotels don't get people in the summer, you're going to see these hotels close."

Airbnb, which came online in 2008, exploits an old idea: homeowners renting their houses or apartments to vacationers for brief periods of time. In some resort areas — think the Jersey Shore or Cape Cod — the practice is well established, and real estate agents do a thriving business connecting renters and residents.

The website has become the new middleman and made it even easier for homeowners to get into the lodging game — a weekend, a week or a season at a time.

According to the site, it has served more than 60 million guests in more than 34,000 cities and 191 countries.

A recent search of Airbnb showed dozens of options in Williamstown, ranging from $45 for a room for the night to $700 per night for a three-story home with 10 beds.

Gangemi notes that unlike hotel or B&B owners, the private residences are not subject to regular visits by town inspectors or forced to pay the commonwealth's 5.7 percent room occupancy tax.

"They don't have to do anything," he said. "It's not fair at all.

"It's the same thing as Uber drivers. Taxi drivers are paying permit fee after permit fee, and now they're getting shut down because of the Uber guys."

Gangemi said while he has seen his bookings fall off, he knows of five Airbnb users on his road, and "they had cars at their houses," over the Memorial Day weekend.

At Williamstown's River Bend Farm Bed and Breakfast, innkeeper David Loomis was less passionate in his criticism but shared many of the same concerns. And, like Gangemi, Loomis was quick to make the analogy to ride-sharing service Uber.

"[Airbnb] certainly is affecting me," Loomis said. "I can't complain about it because it's a perfectly legal operation, kind of like Uber. It's the same thing.

"My main concern is many of these places on Airbnb are not inspected and maybe are not as assiduous about collecting the taxes. They're amateurs in a professional ring. We've worked very hard to build a business and a clientele.

"If everyone had to do the inspections and everything, I'd have nothing to say about it."

Williamstown's town manager and director of community development say that unless someone hangs out a shingle declaring themselves as a business, there is not much the town can do.

"Local lodging businesses play by the rules, and they're competing with people doing this largely as a casual sideline a couple of times a year," Town Manager Jason Hoch said. "I have sympathy for the person who says, 'I want to go into the bed and breakfast business, and they're staring at all these regulations in the state building code."

Hoch said there has been discussion in Boston about finding a way to address the tax issue, and Community Development Director Andrew Groff said the upcoming ninth edition of the building code may address this kind of home-based, occasional commerce.

The city of North Adams is also discussing the impact of the so-called "sharing economy" through an ad hoc committee.

As for the local tax implications, Hoch said he would not mind seeing additional revenue for the town, but he does not know whether any of the local Airbnb "hosts" are paying the occupancy tax. The town does not collect the taxes; it receives a check from the Department of Revenue for its portion of the total tax collected in town each year.

Groff said his colleagues in local government around the county also are aware of the issue, but, as in Williamstown, they are not aggressively pursuing enforcement.

The Williamstown officials noted that they also have sympathy for homeowners who might need the extra income that can come from renting their homes.

"I talked with one person who told me that the little bit of extra money helps them stay in their home," Hoch said.

Lenox Chamber of Commerce Director Kameron Spaulding raised the same issue.

"I know a number of people who are renting homes in the summer who are elderly people doing so in order to continue to live in their homes," Spaulding said. "In a town like Lenox, with higher property values and the higher taxes people are paying, that makes it a tough issue."

Spaulding said the Lenox Chamber has taken no position on the Airbnb debate, which has several sides.

"Over $2 million in tax revenue in Lenox comes from the rooms and meals tax," he said. "So on one hand, we definitely want to protect that industry. On the other hand, there are so many other industries that need those tourists. The idea of bringing even more visitors is appealing to them."

In 2013, The Berkshire Eagle reported that the owner of a Lenox inn pushed town officials to crack down on "illegal rentals."

"Nothing ever came of it," Spaulding said.

The Williamstown Chamber of Commerce, like its counterpart in South County, has not taken a position against Airbnb, and chamber does not see private rentals as a threat to traditional lodging establishments, according to Chamber President Jason Dohaney.

"When the chamber thinks of our visitors we consider how to provide them with a total experience from quality stay, to quality fare, to quality entertainment here in Williamstown," Dohenay wrote in an email seeking comment for this story. "A big part of that experience is clean, convenient and safe conditions when staying in the area. Currently, we believe our lodging options do a wonderful job of meeting that need.

"With that said, we understand business landscapes tend to change and consequently, we need to react to those changes. As it relates to our community, and as long as they are providing the same safe and clean experiences, we don't think short-term stay options are harmful to traditional full-service stay options, rather we see them as being good partners by providing additional rooms at peak times of the year; attracting additional visitors that may not come to the area otherwise; and offering kitchen/condo style options, something we have little of in the area."

The vice president and chief marketing officer for Pittsfield-based 1Berkshire also pointed to the need for rooms during "peak times," as did Hoch in Williamstown, which has two of those peak events in back-to-back weeks: Williams' graduation this weekend and its Alumni Weekend a few days later.

1Berkshire's Lauri Klefos noted that Massachusetts Museum of Contemporary Art directed visitors to Airbnb as an option during last year's Solid Sound Festival. And she said 1Berkshire, a joint effort of the Berkshire Chamber of Commerce and Berkshire Visitors Bureau, has no position on the shared economy website.

"This hasn't been an issue that anyone has brought to me," Klefos said. "I don't think it's prevalent here yet."

The managers of some of the region's best-known hotels declined to comment for this story through its Manhattan public relations firm.

"Main Street must pass on this opportunity," said Katherine Henry of Red Point Marketing, which represents the Main Street Hospitality Group, the manager of North Adams' Porches Inn, Williamstown's Williams Inn, Pittsfield's Hotel on North and Stockbridge's Red Lion Inn.

At North Adams' Blackinton Manor Bed and Breakfast, innkeeper Lesa Bennett has mixed feelings about services like Airbnb.

"My kids have used Airbnb," she said. "I think more people are using it, especially overseas. But I've used TripAdvisor [an Airbnb competitor]. And I know people use TripAdvisor to look for rooms in my industry."

That said, she has concerns about whether the guests staying at homes found through Airbnb are having the same experience they can find in an established lodging establishment.

"I have to pass inspections," Bennett said. "That's pretty intense when they come over and look at everything and make sure my emergency equipment is working. I hope people realize those things might need to be looked at when they rent their house out.

"If I was ever to get out of this business, I think I'd be cautious of making sure I had things in place and things were ready for guests to come into my home."

And as a traveler, she would take extra care to make sure she was staying some place safe when she was a paying "guest" in the private residence of a stranger.

"It's an interesting concept," Bennett said. "The advertisements are amazing. I just hope that people are safe."

River Bend's Loomis said that he could sign up his own business on Airbnb, but that would simply lower his return per night after the website takes out its commission.

Gangemi said poor returns to the homeowners are one reason he thinks the site is a fad.

"I called Airbnb and said let's see what they say about a room that I rent for $125," Gangemi said. "They said, 'How does $39 sound?' I've been renting that home for $125 for years. I've talked to people who walked away with $19 at at the end of a night's stay."

While the "fad" plays out, Airbnb is taking away business that small inns like Gangemi's desperately need, he said.

"How long is the state going to take to do something?" he asked. "In the meantime, it's a slow death. It's sad for people who invested their lives in hotels and motels and can't make a living because of something that's a fad.

"After Alumni Weekend, it's touch and go for me. After that, there are a few regulars who come back every year, but I don't see a lot of new business coming in."

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