British Columbia

Victoria hotelier calls for fair taxation of Airbnb rentals

The manager of a major Victoria hotel is joining the chorus of complaints about the short-term rental site Airbnb.

General manager of Victoria hotel says the short-term rental service has become a threat to the industry

Consultant Jay Wollenberg estimates Airbnb listings take about 300 units out of Victoria's rental housing market. (Airbnb)

Move over renters: at least one member of the Victoria hotel industry is joining the chorus of complaints about the home-sharing website Airbnb.

The general manager of the 200-room Inn at Laurel Point says the short-term rental service has become a threat to the hotel industry in Victoria.

"Five years ago you could have said, 'Oh, whatever,'" Ian Powell told All Points West host Robyn Burns.

Not anymore, he said, now that the competition from Airbnb and other short-term rental services has grown to 1,000 or more units.

It is the equivalent, Powell said, of "five to six Laurel Points" with a financial advantage over conventional hotels.

'They don't contribute' 

"They don't pay the provincial government. They don't pay the city the two — now going up to three per cent — marketing tax," Powell said. "We collectively as an industry market Victoria, which brings economic activity to town, but they don't contribute." 

Powell said he hears similar concerns from other hoteliers around the province in his role with the B.C. Hotel Association. 

As in other Canadian cities, Airbnb's popularity has raised concerns in Victoria about homes diverted from the long-term rental market.

Last month Victoria City Council received a report estimating about 300 suites listed on Airbnb would otherwise be in the long-term rental pool.

Inn at Laurel Point General Manager Ian Powell says the number of Airbnb listings in Victoria equals "five or six Laurel Points". (Google Street View)

Powell said the conversion of long-term rentals to Airbnb listings also affects the hospitality industry's ability to retain employees.

Employees' housing lost

He said a new assistant manager who moved to Victoria was about to move into an apartment when the landlord decided to list it on Airbnb instead. 

The problem is worse in communities such as Tofino where housing formerly rented by hotel and resort employees have been converted to Airbnb listings, Powell said. 

Last week Airbnb chief executive Brian Chesky told the Financial Times the company plans to increase the number of cities where it will collect and remit hotel taxes to 700 cities from the current 200.

"It would be a first step," Powell said. However he said neither Airbnb nor government officials have proposed to tax short-term rentals at anything close to the rates currently paid by the local hotel industry.

"We don't collect a two or five per cent [provincial] tax — we collect a 16 per cent tax," he said. "We pay two-and-a-half times property taxes."

New hotel plans on hold

Powell said the disruptive effect of Airbnb on the industry is leading some developers and investors in the Victoria area to put plans for new hotels on hold.

However, he is encouraged that the City of Victoria is beginning to lobby the provincial government about measures that could be taken in response to the industry's concerns.

"Nobody in our business is concerned with competition," he said. " We've lived with it all our lives. It's the fairness of that competition which is important."

To hear the full interview with Ian Powell on CBC Radio One's All Points West, go to: Victoria hotel industry hurting from Airbnb impact