Airbnb In The Sunshine Economy

Jan 31, 2017

With record tourism comes big business, but you won’t find a front desk at one of the largest lodging groups in the state - Airbnb.

The home-sharing network has almost 33,000 hosts in Florida, generating millions of dollars for it and the hosts, basically property owners who rent a room, home or a condo for a few days to a visitor. The company calls it a short-term rental and insists it is not in competition with the hotel business.

The traditional hotel business is growing in South Florida. Here's what 2016 looked like for hotels in Miami-Dade and Broward counties:

SUPPLY

While hotel occupancy was down in both Miami-Dade and Broward, there were more hotel rooms for guests to choose from. In Miami-Dade, the supply of hotel rooms jumped more than 4 percent last year to over 54,000.

Over the same time, Airbnb's Florida business doubled, according to Tom Martinelli, the company's public policy director in Florida. He estimates about a third of Airbnb's listings in the state are concentrated in the four counties making up South Florida. 

"We are cordial with them [the hotels]," said Martinelli. "The data that is coming out shows that they're seeing incredible growth and so are we. There's enough room for everybody because the pie is getting bigger."

The data Martinelli is referring to is a study by travel research firm STR examining the impact Airbnb has had on 13 global hotel markets. Through the end of July 2016, the analysis found Airbnb's market share of supply of accommodations in Miami was the highest in the United States and second only to London. 

"There are folks that are looking for an experience versus folks that are looking for something established, traditional and institutional," said Martinelli. "We are catering to a new audience that is showing up and wanting an experience in Florida."

DEMAND

Demand for accommodations in South Florida generated $273 million in Airbnb host revenues in 2016, according to the company. Property owners listing rooms, apartments, condominiums and homes saw the biggest share of those sales. Miami-Dade County was host to the most.

"I think we're seeing a behavior shift from institutions to people," said Martinelli.

TAXES

That revenue is subject to state and local tourists taxes. In 2015, Airbnb began collecting the state tax for its hosts and local tourist taxes in 34 counties. It does not collect the local bed taxes in the four South Florida counties. The county resort taxes are:

• 5 percent in Broward

• 6 percent in Miami-Dade, Palm Beach and Monroe

"We've been at the table for over a year," said Airbnb's Florida public policy director Martinelli. "When it comes down to remitting tourist development taxes, most folks would probably have to go through an accountant or a tax attorney. We facilitate that process for them and that's what we want to do."

Several local municipalities have their own tourist taxes. Surfside forged its own deal with Airbnb to collect that town's 4 percent bed tax on short-term rentals. It is the first-of-its-kind agreement with a local government in Miami-Dade. It begins March 1.

RULES

Martinelli thinks addressing the tax collection issue is "one of the easier things to do." Perhaps more difficult is working with local governments and regulations. The company has been at odds with Miami Beach officials for more than a year.

Tom Martinelli is the public policy director for Airbnb in Florida. There are almost 33,000 Airbnb hosts in the state according to the company.
Credit courtesy: Airbnb

Since March, city inspectors have been able to issue $20,000 fines for property owners violating the city's rules governing short-term rentals in certain neighborhoods.  More than $4 million in fines have been levied for violating the ordinance.

"I think they have valid quality of life concerns and they're very understand. They're solvable, but it requires an appetite to come to the table," said Martinelli.

In December, the city tightened regulations requiring property owners listing accommodations on Airbnb and similar short-term rental websites to file an affidavit that the listed property is zoned for short-term rentals. They also have to have a business tax receipt and have a resort tax account with Miami Beach. If the listed property is a condominium, owners must show proof that their condo association allows such short-term use.

"We want to help Miami Beach reform its short-term rental code," said Martinelli.