Getting rid of competition

[jaquo]

In our area - and I mean immediate area - I have seen plenty of hosts come and go. It seems that the world and his wife want to ‘give Airbnb a try’.

And they are doing it for the money. Don’t get me wrong, so am I, but I also am very keen to ensure that guests have a great stay and I actively enjoy getting the place ready for them (with all the unexpected extras) and, although I’m not a particularly sociable person, I enjoy meeting guests. I also love where I live and love to share it with others.

But, as most hosts know, it’s bloody hard work. If you’re onsite, it’s not just the preparation, the cleaning, the internet work, the accounts, the laundry, the shopping for supplies … it’s also dealing with guests during their stay. This is especially the case if like all humans, the guests have traits that you’d rather not have on your premises.

For me anyway, I have to truly love this job to be able to do it. Judging by the posts I read here, and I’m not saying by any means that I have perfected this, I consider myself to be a stress-free host. I doubt that the ‘let’s give Airbnb a try’ hosts aren’t like that.

Soon they’ll learn that they stress over reviews, stress about empty days in their calendar, stress about what reviews to write, stress about just about every aspect of hosting. They are bombarded with messages from Airbnb telling them to reduce their prices. This is even worse if they also have to stress about the fact that their listing is in some way against the rules of their city, HOA or condo association.

They have to tell guests that if a neighbour asks, they are friends. They have to ask their guests to lie - surely not a great basis for a guest/host relationship?

Eventually, they think ‘who needs this?’

[konacoconutz]

You could come to my neighborhood in Hawaii right now with that 300k and buy an ocean view house!

[GutHend]

Sounds wonderful !
But would you have me as a neighbor ?

[HumptyDumpty]

If you are good at what you do the competition will not be a problem. I started a B&B 9yrs ago from scratch and with hard work surpassed all my competition within 2yrs. Becoming 5 star gold rated by the tourist board and the best on tripadviser for a county with 900 B&Bs.
The biggest problem with being the top of the game is every guest thinks they are the hotel inspector, drove me potty and I sold it 3yrs ago, If I ever did it again I would go for no more than 4 stars. My life is much simpler with self catering accommodation and a caravan site.

I voted yes because everybody allowing folks to stay in there home should be working to the same guidelines that ensure the safety of your guests and a level playing field, I opened 3 letting rooms & was required to inform the local authority before opening.
Have you had a fire safety inspection, food hygene inspection, electrical certification, gas certification, do you pay for playing the TV or radio to the guests (PPL & PRS licence), do you pay business rates, have you got the correct insurance to cover your guests, do you pay for card terminals for payment from guests and if so do you take the necessary courses to comply with card acceptance every year, are you vat registered paying 20% of your profit to the government and are you paying personal tax, etc etc etc. A B&B has a lot of costs but can be very lucrative.

Every room an air guest is staying in. is taking a customer from a legitimate business unless you are a
legitimate business and comply with relevant regulations.
I will now go and hide in a corner

[konacoconutz]

As long as you don’t undercut me!!!

[PHX]

I wouldn’t do it because it’s just bad karma.

[azreala]

In Barcelona you are actually encouraged, by the Mayor’s office and mailers (in English!!), to rat out non permitted ABBs. However, you can not do it annon, so there’s that. People in our building did it, to curb on illegal operator, we didn’t take part. However, we thought about it bc what if those people’s guests cause issues (they always did) and we were blamed for it, we could potentially lose our permit. Luckily, the illegals stopped bc the risk (30k Euro if caught) was too much for them.

We also have an illegal in our building in SF. I thought about reporting, bc of how much SHT the HOA gave us, and clearly are not giving them, but decided against it, bc Karma. Also, I don’t see them as competition at all, space is thrown together, no real decor, inferior location in the complex, etc. They also charge roughly 1/2 our price, and if they want to bust their bums to make the same amount we are making with 1/2 the amount of reservations, go for it!

[azreala]

Let me tell you a little story… of how someone (ahem,me and DH) bought a house in a town that didn’t allow STR, but tended to ‘look the other way’. Well, that lasted for a year, and then we were fined a few thousand dollars. Lucky for us we knew we could always LTR it, not ideal but an option. I wasn’t super keen on this bc I want to use my house every now and then, so I listed 30 night min across all platform, and viola we are booked through Oct. Yes, less money, but also WAY less headache, way less driving 90 mins to and from, etc. Moral of the story, have a back up plan in case the wind changes directions.

[faheem]

@EllenN

I would think long and hard before reporting people to the government. One of the things that all totalitarian governments do is encourage/require citizens to tattle on each other (Communist China, Fascist Germany, East Germany).

Well said. And governments are supposed to take care of their citizens, not tell them what to do. Though they don’t necessarily see it that way.

[cabinhost]

@GutHend

Suppose we are able to buy a small house or a small lot that most of the investors deem worthless. We would have to invest extra, but we could work legally. What we wouldn’t be able to do, is maintain the ridiculous low prices of illegal competitors. In that case what would I do? Since I am totally in doubt I wanted to know the opinions on this forum .

(BTW: Yes, we ourselves are breaching the law at the moment. I am aware of this, you don’t have to call me out on it. This is our BnB trial period that required little investment and was just to see if we like it. The moment someone reports us, we can shut down within half an hour.)

OK…this whole idea all around sounds so risky if you are relying on Air to market your property. What happens if they were to change the law and allow people to rent a room in their apartment? And now everyone was allowed to rent to guests after you have invested all this money to be one of the few legal places?

What exactly is the fine for what 97% of you are doing illegally? And do you sense that anyone actually cares and is trying to rat each other out? If the law is outdated, would they be willing to change it?

[Eberhard_Blocher]

@GutHend

if one abides by the law and another one doesn’t, this might create a non-level playing field

Good point. For example, several other Airbnb hosts have sprung up in my neighbourhood in recent months, and they all seem to get lots of bookings, while my own booking rate has declined, somewhat.

Now I know that I do collect city tax from guests and pass it on to the local government, while many of my host competitors do not. This is not a level playing field! One way to level this would be for Airbnb to collect city tax automatically, from guests, at the time of booking. However, they are dragging their feet in my home town, while they are doing this in lots of places around the world. It simply ain’t fair!

Having said this, I am not disinclined to perhaps report competition to the relevant authorities.

[faheem]

Hi @GutHend,

@GutHend

Today we learned that the, very touristy, district we are living in does not allow any short term hospitality service in an apartment.

So you are saying that STR is not allowed in an apartment but is allowed inside a free-standing structure? That seems odd - what is the rationale?

[GutHend]

@faheem

So you are saying that STR is not allowed in an apartment but is allowed inside a free-standing structure? That seems odd - what is the rationale?

Although the district is all apartments, they will only allow it in a separate building. Does not have to be free-standing. Which makes totally no sense, since it’s almost all apartments here. Even if I buy a terrain and apply for building apartments with a B&B in the penthouse, they will not allow. Why: STR and apartments in one building are not allowed. There is no rationale to it whatsoever…

We are going to study the actual legislation, and we might well end up going for a chat with the mayor, to explain him about the 21th century.

[GutHend]

It was just a string of events that led me to an idea and a hypothetical ethical dilemma, that I found interesting to talk about .

It’s not that I would just jump into a crazy adventure, thinking that I can kill the competition and win the lottery . All your concerns (and lots more) have already crossed my mind. And without a doubt if I start doing the numbers, things will just not add up. Regardless of competition. But we still have many options to consider.

About the fines… For the moment, if you close down your rental at first warning, you will not be fined.
The problem in apartment buildings is the neighbors. You only need one who doesn’t like you making money and you’ll be in trouble.
The law clearly needs an update.

[Zandra]

How are you able to collect and pay taxes on behalf of your guests and yet STRs aren’t legal in your building because of zoning. I’m confused as surely you have to declare the source of the tax?

[GutHend]

For the specifics I will have to consult my hubby later in the day.

Please don’t think that taxes and legality of things are related. My father has a small lot of land in Belgium with a caravan on it as a vacation home (something he inherited from his parents). For years he had to pay taxes for it being considered a “second home = vacation home”, and then all of a sudden the government said it was illegally there. Part of our defense was that they had been collecting taxes on it for years, but to them that was perfectly reconcilable. In the end we did win the entire lawsuit based on other elements…
Correct me if I’m wrong, but aren’t there a lot of “illegal” immigrants in the USA, that have paid income taxes for years, but are still considered illegal and might get expelled by that weird hairdo?

[Zandra]

Hehehe! Weird hairdo

I can’t speak for the situation in the states to be honest. It couldn’t happen here.

You shouldn’t be able to pay taxes on something you are doing illegally but I suppose if the right hand and the left hand aren’t on the same body who knows what can happen. Now I’m wondering if you can pay taxes on drug money.

[jaquo]

@GutHend

Correct me if I’m wrong, but aren’t there a lot of “illegal” immigrants in the USA, that have paid income taxes for years, but are still considered illega

Yes. Been there, done that.

[EllenN]

In the U.S., you are required to report and pay taxes on all income, legally or illegally obtained. The gangster, Al Capone, was convicted not of bootlegging or murder, but of tax evasion. To me, saying that you don’t have to pay taxes on illegal activities is like saying that it’s okay to break traffic laws if you are on the way to perform an illegal activity.

http://www.findingdulcinea.com/news/on-this-day/September-October-08/On-this-Day--Al-Capone-Is-Convicted-of-Income-Tax-Evasion.html

[Zandra]

To be honest why not? In for a penny in for a pound. Speeding is the last of your worries when you’re about to rob a bank.