August 6, 2018
Focus on Hospitality & Tourism

B&Bs vs. Airbnbs

Photo | Matt Wright
Brian Belliveau, the owner of the Howarth House bed and breakfast in Fitchburg, which he says is subject to more standards than Airbnbs.
The Howarth House, adjacent to Fitchburg State University, features common areas and an in-ground pool.

Brian Belliveau found himself with extra time when he retired as a firefighter, and extra space in his home when his two grown children left. So he and his wife, Linda, opened up their Fitchburg home to visitors.

In 2009, they opened Howarth House, a bed and breakfast begun with just a single guestroom and now has three. At the time, Airbnb, the website letting people book a place to stay in someone's home or spare room, was just in its infancy.

Almost 10 years later, Belliveau doesn't mind the competition. But as a former public safety official, he does mind what he says is an uneven playing field, with Airbnb locations not required to do what he did when he renovated his home, such as adding a sprinkler system, installing smoke detectors and emergency exit signs.

"They should be held to the same standard," Belliveau said.

A decade after Airbnb's debut, the website has turned into a behemoth, with a presence in nearly 200 countries and an influence critics say has increased housing prices in places where people buy a unit simply to rent it out on the website.

"What I've seen from short-term rentals is that it's really putting a damper on business for bed and breakfasts," said Paul Sacco, the president and CEO of the Massachusetts Lodging Association. "The people most affected – everyone is affected to some degree – is the B&Bs."

Squeezed by new competitor

Two studies published this year give ammunition to those who say Airbnb hurts both residential and hospitality markets.

One study from three researchers in California found for every 1 percent increase in Airbnb listings, an area had a corresponding 0.018-percent increase in rents and a 0.026-percent increase in house prices – a miniscule-sounding increase that, nationwide, has led to significant increases, the authors said.

Another from researchers at Harvard University and the Massachusetts Institute of Technology found even though many Airbnb bookings – between 42 percent and 63 percent, the authors said – aren't necessarily taking away from hotels, hotel revenues would be 1.5-percent higher without Airbnb.

In the hospitality industry, bed and breakfasts like Howarth House used to be the little guys in the lodging industry, where visitors would choose a place for hospitality and a more home-like feel. They now find themselves squeezed on one end by the Marriotts, Sheratons and Hampton Inns of the world and on the other side by anyone wanting to rent out their home for a night.

Not much empirical evidence exists for the effects of Airbnb, either pro or con, said Muzzo Uysal, a hospitality and tourism management professor at UMass Amherst.

Effects may tend to be greater in larger cities, where people have choices for where to stay in a range of apartments in denser neighborhoods, than in smaller towns where B&Bs pose a different type of appeal, Uysal said.

"Bed and breakfasts have some personality. It reflects more of the local flavor," Uysal said. "It's a matter of what you're looking for as a consumer."

For bed and breakfast operators, there's a sense of bitterness Airbnb listings don't have to go through the same regulations that they do, even if they're not sure how much the website has eaten into their revenue.

"They're not inspected by the board of health like we are, or have to have proper liability insurance, or a fire alarm system," said Deborah Bergeron, who owns and runs the Sleigh Maker Inn in Westborough with her husband, James. "They don't have the expenses that legal businesses have.

"Obviously, Airbnb is hurting legal lodging businesses," Bergeron said. "There are zoning restrictions put in place many years ago, and many Airbnb people are not legal. They never checked with the town to see if it's legal to have people staying at their homes."

The Bergerons bought the Sleigh Maker Inn 14 years ago but have put the home on the market for $714,000. They're looking to retire, having found they're working harder than ever, with reduced rates meant to help compete with cheaper Airbnb listings.

"It's much more complicated than it used to be," Bergeron said. "We got into it because we love people and old houses and taking care of people. All the fun stuff. But all the business part takes away from the fun."

Attempts at regulation

Public officials have been trying for years to wrangle Airbnb, seeing an opportunity to bring in additional tax revenue or respond to neighbors who have complained of unwelcome visitors to their neighborhood.

Airbnb spokeswoman Crystal Davis said the company already collects taxes on rentals in the other five New England states and is supportive of doing so in Massachusetts.

Three Central Massachusetts communities – Framingham, Webster and Worcester – have debated regulating short-term rentals after complaints of noise or illegal use, but none have yet to pass a law.

Three Central Massachusetts communities – Framingham, Webster and Worcester – have debated regulating short-term rentals after complaints of noise or illegal use, but none have yet to pass a law.

In other areas of the state, Cambridge has passed an ordinance requiring Airbnb operators to register their units, which they must occupy as their main residence. Boston finalized regulations in June establishing guidelines on short-term rentals. It will go into effect next Jan. 1, with annual fees starting at $25 and a requirement operators notify their abutters within 30 days of registering. Residents will still largely be able to rent out their places, as long as they don't have outstanding code violations.

In the state legislature, lawmakers reached an agreement in July to create a central statewide registry of home rental units and to tax rentals at up to 17.5 percent in some areas, including Boston. The legislation reached Gov. Charlie Baker's desk at the very end of the legislative session, however, leaving the fate of the bill in some doubt.

Stepping up the hospitality

Photo | Matt Wright
Brian Belliveau, outside of the Howarth House bed in Fitchburg

B&B operators feel they still provide a better offer to guests than Airbnb can.

"Most who use [Airbnb] are looking for deals," said David Ward, the owner and operator of the five-room Jenkins Inn in Barre for 32 years. "They're not really interested in the bed-and-breakfast experience. They want to save money."

Eric Esiason at Laurel Ridge Bed and Breakfast in Warren said his secluded cabin provides an experience most Airbnb listings can't compete with.

"For the area, we are a bit expensive," Esiason said in an email. "But where else can you stay in a custom designed log home, built [mostly] by the owners, off grid, on 60 acres of private woodlands, with goats and chickens, and a fabulous gourmet breakfast in the morning?"

Like other local B&Bs, Laurel Ridge has posted on Airbnb – an if-you-can't-beat-them-join-them type of decision that hasn't boosted the fortunes of bed and breakfasts. Laurel Ridge never sold a single night through the website, Esiason said.

"We had a bunch of inquiries all looking for a lower price – so I pulled the listing," he said. "It seemed that most Airbnb customers were looking for a cheap bed and that's about it. Get in, sleep, get out."


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