Local bed-and-breakfast owners competing with Airbnb

Published 12:15 am Monday, May 23, 2016

NATCHEZ — Amateur bed-and-breakfast locations in Natchez are popping up online, and some Natchez business owners are taking note.

Local bed-and-breakfasts are competing with online accommodations website Airbnb.com, which allows local residents to host visitors in their houses or other properties around town for a charge.

Hosts can advertise rooms for free on Airbnb, and guests can compare prices to other accommodations in town.

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Airbnb lists 48 rentals in Natchez, which include registered bed-and-breakfast operations as well as amateur listings.

The latter, some bed-and-breakfast owners say, are becoming a problem.

Starling’s Rest Bed and Breakfast owner Paul Wade said he takes issue with what he calls “illegitimate” operations.

Wade came before the Natchez Planning Commission Thursday to ask the city to begin monitoring the site to enforce the tax ordinance.

The commission did not take action Thursday, but Interim City Planner Riccardo Giani said he would begin researching the city’s options.

Wade said the website damages his business.

“Legitimate B&Bs, they pay taxes,” Wade said. “Airbnb can undermine all the hotels by getting a bunch of suckers to sell their rooms, and Airbnb doesn’t bring up taxation. They’re part of this disruptive technology cheat.”

Amateurs are able to collect revenue from renting out their guestrooms, Wade said, and can offer lower prices because they don’t contribute sales or tourism taxes.

Wade and other professional bed-and-breakfast owners use Airbnb for free advertisement, he said, but are sure to charge taxes on top of their usual price.

When Wade first opened, he used Airbnb to reach customers and said he did not know at the time he was breaking the law.

“Airbnb helped me ramp up very quickly as a B&B, but after a couple months, I realized I was one of those people that was going to get in trouble because I wasn’t paying my taxes,” Wade said. “So I had to go through an onerous process of figuring out how to pay the taxes I owed and getting a license.”

Wade said unlicensed bed-and-breakfasts who do not pay taxes are at risk of being audited. The answer, he said, is adopting a standard policy to make sure everyone contributes taxes.

In order to compete for Airbnb customers, Wade advertises his base price only online and charges tax when customers arrive. A note on his Airbnb listing warns customers of the extra charges.

He has tried to encourage his colleagues to do the same, and has shared his strategy with the Bed and Breakfast Association of Mississippi.

“It levels the playing field because everyone is charging tax,” he said. “It helps the city; it helps everyone. They can collect taxes, not get audited and chip into the system they’re supposed to be chipping into.”

Though Wade approached local bed and breakfasts with the idea, it has not caught on locally, he said.

For Natchez Bed and Breakfast Association President Christine Tims, Airbnb is not a serious threat.

Tims, who owns Bisland House Bed and Breakfast, is listed on Airbnb, but rarely hosts guests through the website. She said many of the 28 members of the B&B Association also list on Airbnb.

“A lot of us are on Airbnb because it doesn’t cost anything,” she said. “Serious B&B owners, we will put (a low) price up there to be competitive, and most of us will eat the tax and still pay it. So just because we’re on there, it doesn’t mean we’re not paying the tax.”

Tims said Airbnb charges her guests an extra $15 as a service fee when they book Bisland House rooms through the website, so the prices turn out the same, even if she pays the tax herself.

The service fee varies from property to property.

For Tims, the problem with Airbnb is less about competition and more about the lack of contribution to local tourism-related taxes.

Bed-and-breakfasts in the Natchez city limits collect a $2 per night tax and a 3-percent occupancy tax, which goes to city marketing efforts and other tourism-related city expenses.

The State of Mississippi also collects a 7-percent sales tax.

Tims said hotels, which pay the same taxes, are a greater source of competition to her bed-and-breakfast.

“We don’t like it, the fact that some (on Airbnb) are flying under the radar,” Tims said. “That bothers us more than the price. We figure they should pay their fair share to the city for the sales tax or their guests should. But there’s nothing you can do about it.”

As president of the bed-and-breakfast association, Tims said, she can do nothing to enforce the law.

“The state would have to monitor that and enforce it,” she said. “The city could certainly enforce it, but that’s up to the City of Natchez. That’s not our place to enforce it, and you know, who wants to get into the thing of turning people in? That’s not nice. It makes for bad blood between the owners.”