Accommodations booked through hosts on Airbnb will soon be charged hotel taxes in both Portland, Oregon, and San Francisco, California.
The announcement comes on the heels of CEO Brian Chesky's overarching sharing manifesto Shared City, published last week on Medium.
The Shared City vision is one of a return to micro-entrepreneurship, one that moves away from "mass produced living" where mom-and-pops are able to flourish once again. Chesky sees this as a return to the cities of yore that acted as the original models of a sharing economy:
The manifesto was released to coincide with a far-reaching partnership with the City of Portland.
Chesky continues in his article:
To honor these commitments, and to realize a more enriched city, today we are announcing Shared City.
Shared City is our initiative to help civic leaders and our community create more shareable, more livable cities through relevant, concrete actions and partnerships.
I am very pleased that our first Shared City is Portland, Oregon.
Airbnb will work with the local tourism organization to promote small businesses alongside other tourism images of the city - and, in order to more fully support the city as a whole, will begin collecting the local hotel tax. This tax will not be a burden on hosts, but will be collected directly from guests, and then remitted by Airbnb to the city government.
Another step towards a more positive impact on local communities is the ability for hosts to donate a portion of their proceeds - to be matched by Airbnb - to local organizations chosen in collaboration with the city.
Chesky also says that they company will pursue corporate property managers who abuse the platform:
We want to make sure all of our hosts represent the best of Airbnb. Corporate property managers who abuse our platform, hurt the city’s housing stock and give guests a bad experience aren’t welcome on Airbnb and we will work with the city to help ensure hosts cannot abuse our platform.
The Shared City initiative continued this week, with Airbnb announcing that the company will collect San Francisco's 14 percent hotel tax on behalf of hosts starting as early as this summer.
This is a huge development, as a persistent criticism of the accommodations platform is that it does not pay city hotel taxes.
Local municipalities will finally reap the benefits of the P2P accommodations economy, bringing in welcome revenues from a currently untapped source as more and more cities are on-boarded by Airbnb.
The taxation will not likely affect host counts, as the burden of collecting and remitting the tax has smartly being taken on at the source of payment by Airbnb, and might actually encourage more hosts to join once the issue of paying hotel tax has been resolved at the local level. The tax is levied on the guest, not the host, so this is a net-positive for the local economy.
Time will only tell if, and how, this impacts demand for Airbnb by guests. Hotel taxes are a reality of the modern tourism industry, and guests will simply have to accept the full and legal reach of the local tax authorities. Ultimately, the taxes benefit the tourist as well, given that most cities use hotel tax proceeds for tourism-related line items.
Airbnb says it is in talks with a half-dozen cities already, and hopes to on-board at least a "handful" by the summer. The road towards complete compliance is long, especially given the company's international reach.
NB 1: Tax tidal wave image courtesy Shutterstock.
NB 2: The author is an Airbnb host.