Airbnb and the largest U.S. hotel association last week
traded barbs over taxes and regulations.
It began with Airbnb sharply criticizing the hotel industry
for taking millions of dollars in taxpayer subsidies amid record industry
profits, while Airbnb was collecting billions of dollars in occupancy taxes.
The American Hotel & Lodging Association responded by
calling Airbnb's claims "shameful" and "pathetic."
Speaking on a conference call with journalists last
Wednesday, Airbnb's head of global policy and communications, Chris Lehane,
took the hotel industry to task for taking what Airbnb estimated was almost $5
billion in taxpayer subsidies during the past decade.
He was apparently alluding to tax benefits that some
communities give developers as a means of persuading them to build hotels in
risky markets or as part of community development projects, such as convention
centers and sports arenas.
During the same decade that it was collecting these
subsidies, Lehane said, the hotel industry was accusing Airbnb and its hosts of
failing to pay their fair share of occupancy taxes.
In its analysis of 10 U.S. destinations -- including Los
Angeles, Chicago and Florida -- Airbnb estimated that its hosts and guests had
generated $148.9 million in tax revenue since Airbnb's 2008 founding. During
the same period, taxpayers have paid $2 billion in subsidies for hotel
developments in those locations, according to Airbnb.
"The [hotel] industry is making record profits and
getting billions in subsidies from taxpayers," Lehane said.
While saying Airbnb is "committed to working with
governments to make sure home sharing is done in a regulated way," Lehane
cited hotel operators' increasing use of automation and robots as well as the
industry's fight against raising the minimum wage as further evidence that
Airbnb is better for communities than hotels.
The hotel association took issue with both Lehane's comments
and the report, estimating that the industry has contributed more than $1
trillion in tax revenue to the U.S. economy since 2008, and asserting that any
subsidies amount to "an unprecedented return on investment" for the
"Airbnb's attack on city officials and the hotel
industry for working together to support local jobs and economic development is
downright shameful and a pathetic attempt to hide from their own lack of
transparency and accountability in their shady 'voluntary' tax deals," the
association said in a statement last Wednesday. "This Airbnb-sponsored
propaganda piece has no validity. It's a sad attempt to deflect the intense
pressure Airbnb has been under from city mayors and jurisdictions across the
U.S. to regulate their illegal commercial hoteling schemes, lack of taxation
and avoidance of common-sense safety measures."
The latest volleys come as privately-held Airbnb continues
to generate record demand but at the same time is showing signs of slowing
growth. The company's third-quarter revenue doubled from a year earlier,
Bloomberg News reported last week, citing a person familiar with the financial
Lehane declined to confirm that figure, though he called the
third quarter the company's "single strongest-performing quarter."
Cornell School of Hotel Administration professor Chris
Anderson said the hospitality industry has failed to keep up with an evolving
"For decades, we've been choosing between a king suite,
a double-double or two rooms because the industry has been slow to realize that
there are more heterogeneous accommodations," Anderson said. "Traditional
hotel suppliers need to realize that Airbnb is part of the ecosystem now."
Still, while boasting more than 4 million listings worldwide
-- more than triple global hotel leader Marriott International's room count --
there are signs that Airbnb's growth is slowing, according to a Nov. 10 report
released by Morgan Stanley.
Citing statistics it compiled with AlphaWise, Morgan Stanley
estimated that 25% of U.S. and European travelers have used Airbnb in the past
12 months, compared with the 28% that Morgan Stanley had forecasted last year.
That number rose three percentage points from 2016 after jumping eight
percentage points the year prior.
In the conference call, Lehane took issue with Morgan Stanley's
findings, arguing that the report failed to take into account emerging global
markets such as Asia and Latin America, where the number of Air-bnb guests
jumped 80%, more than doubling in the past year alone.
As for Airbnb's allegations about hotel subsidies, Cornell's
Anderson questioned if it was appropriate to make such broad claims, since most
new hotels do not receive tax breaks. At the same time, he recognized the
company's need to continue lobbying for itself and its hosts.
"It's a little shady, because it's not like the whole
marketplace is getting access to those subsidies," he said. "Any kind
of big business gets incentives to create jobs. But if you want to play in this
battle, there's obviously lots of stuff you can dig up and bring to light."