NEW MINAS – A local hotel operator would like to see regulations in place to level the playing field between commercial taxpayers and multi-unit Airbnb hosts.
“Individual families renting a portion of their house as a shared economy, that’s not a problem at all – it’s just the commercial operators running multi-units and not having to pay the same amount of taxes that hotels do,” said Jaison Sandhu, owner of the Slumber Inn in New Minas.
“That makes it unfair competition. Competition is always good; it sort of keeps you on your toes and it also keeps the quality of product up and gives more options to the consumer. But unfair competition is not good.”
Airbnb usage within the Annapolis Valley has directly impacted the bottom line at the 76-room Slumber Inn, he said.
“There has been quite a significant impact that you can feel, especially in your occupancy.”
Calling for consistency
With Airbnb hosts more abundant in the summer, Sandhu said he’s noted as many as 70 to 80 short-term rental units advertised online within the Slumber Inn’s typical catchment area at one time.
“That’s like having another hotel in the area,” he said.
“We’ve definitely seen our occupancy going down as it’s gaining more popularity.”
He’d like to see Airbnb hosts subjected to taxation and safety regulations that are on par with the rules in place for hotel operators.
“The concerning part is the commercial operators, so bigger apartment buildings renting out multiple floors… (or) one individual purchasing five other properties, and then it sort of becomes a multi-unit operator,” he said.
“There are accommodation industry regulations that they should be abiding by and they should be absolutely sharing their data.”
Established hotels and motels are still the preferred choice for guests wanting an added sense of security, Sandhu said.
“Your safety and security is definitely one of the main things that you get when you stay in a hotel. We have to follow a lot of building codes and fire codes, and we get inspected quite regularly,” he said.
“There needs to be a formality or consistency throughout the country.”
Advocating for change
Sandhu is not alone in expressing his desire to see a uniform method of regulation introduced in response to the increasing presence of accommodation-sharing platforms, such as Airbnb.
The Hotel Association of Canada’s website says the number of Airbnb units for rent throughout the county has nearly doubled in a two-year span.
“What started as true home sharing – where the owner is present during the guest’s stay – has expanded into a growing trend: people using these platforms to become commercial operators. This means that multiple units or whole homes are being rented out on a consistent basis. Effectively, these operators are running illegal hotels within existing residential housing,” states an article published on the hotel association website entitled “Fair Rules for the Short-Term Rental Industry.”
The same article lists the potential loss of affordable and long-term housing rentals in areas where properties are converted into short-term rental units, lost tax revenues and the potential for nuisance or disruption in local communities as areas of concern.
“We are calling on the federal government to amend the Excise Tax Act to create a more level playing field for hotels, in relation to the short-term rental industry. Airbnb and similar online platforms should be required to charge and remit HST on the service fee charged to hosts and guests, and pay income tax on their profits,” the article reads.
“We also recommend a focused review of the overall rules for all players involved in the temporary accommodation sector, with a view to achieve fairness.”
‘Here to stay’
Tourism Nova Scotia spokesman Alex Handley said the accommodations sector accounts for about 15 per cent of the annual tourism revenues in Nova Scotia.
“A growing supply of affordable accommodations is key to the continued attraction of visitors and the extended stays that generate higher revenues for restaurants, retailers, transportation companies, and experience providers, which make up the remaining 85 per cent of tourism revenues,” added Handley, responding to questions via e-mail June 14.
She said about 60 per cent of the Airbnb listings are located outside of Halifax Regional Municipality, meaning rural communities are more apt to benefit from the new revenue brought in by tourists.
“These listings enable visitors to stay in communities that they may otherwise have driven through. Airbnb listings—and short-term rental listings available on other sharing economy platforms, like Booking.com and VRBO—are creating opportunities for smaller communities to attract more visitors to their areas,” said Handley, who noted that Nova Scotia’s tourism industry welcomed a record-setting 2.4 million visitors in 2017.
“Short-term rentals are an entirely new market segment in the accommodations sector and they are here to stay.”
Minister of Business Geoff MacLellan established a provincial working group on short-term rentals. Consisting of industry, community and government representatives, the group is tasked with reviewing best practices in other jurisdictions and developing a set of recommendations for Nova Scotia.
“A Tourist Accommodation Needs Assessment conducted for Nova Scotia in 2017 identifies a sharp need for more accommodations supply, particularly in rural areas. The report also indicates that Nova Scotia needs more availability of quality accommodations if it is to reach $4 billion in tourism revenues in 2024, the goal identified for the tourism industry by the Ivany Report in 2014,” said Handley.
Airbnb open to ‘constructive debate’
Alex Dagg, director of public policy for Airbnb, said the company is open to engaging in conversations about regulations.
“Airbnb is committed to working with jurisdictions across Canada to develop smart, easy-to-follow regulations that support home sharing – including regulations around taxation. We have agreements in more than 350 jurisdictions globally to collect and remit hotel taxes on behalf of our hosts and guests, including in the province of Quebec and the City of Ottawa,” she said in a prepared statement June 14.
“We have been working with the province to provide information about our platform and encourage them to undertake an informed and thoughtful consultative process as they consider this issue – one where the public and policymakers get to know the full picture, which we believe is core aspect of constructive debate.”
The majority of Airbnb hosts in Nova Scotia are everyday residents renting out space in their homes to earn some extra cash, Dagg said.
“Hosts keep 97 per cent of their listing price - so that means that money is staying in hosts' pockets to spend in their local communities.”