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Canada Airbnb a disrupter in small Saskatchewan towns, lake communities

18:20  20 september  2019
18:20  20 september  2019 Source:   leaderpost.com

Airbnb regulations coming as hospitality revenue declines

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a man standing in front of a building: Brian Baraniski outside the Shorebird Inn, located at Tobin Lake. Photo by Susan McNeill/Nipawin Journal Brian Baraniski outside the Shorebird Inn, located at Tobin Lake. Photo by Susan McNeill/Nipawin Journal

Russell Wittke remembers the first time Airbnb affected his Humboldt hotel.

A curling competition was taking place in town, and a team had booked two or three double rooms at The Pioneer Hotel & Motel, a family-run business built by Wittke’s father in 1966 and passed down to him. The brick building has the stylings of a classic Saskatchewan hotel from decades past, but provides a nostalgic sense of comfort.

The curling team cancelled the day before its members were supposed to check in. The reason, Wittke later found out, was that the team had opted for an Airbnb.

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a bedroom with a bed in a room:  A bedroom available for rent on Airbnb in Humboldt that costs $49 a night. A bedroom available for rent on Airbnb in Humboldt that costs $49 a night.

‘That can take a big bite out of what you typically depend on’

Hotel owners in Humboldt will tell you that it’s a community people visit typically only when they have a specific reason to be there.

It’s not like a bigger city, where road traffic off major highways provides a steady flow of customers. Sporting events are one of the few ways hotels are filled in the community located off Highway 5. A room cancelled at the last minute is lost revenue, unlikely to be recouped that weekend by someone who happens to be passing through town.

“It’s tough. There’s times that you’re busy. There’s a lot of times when there’s not enough going on to support all the hotels,” Wittke says.

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Plenty of hotel owners view Airbnb not as fair competition, but rather as a competitor that plays by different rules.

The San Francisco-based company, with its wide-reaching digital presence, allows anyone to offer short-term property rentals and is not known to be actively regulated by any of Saskatchewan’s major municipalities. Airbnb hosts are not required to have a business licence, and are not taxed provincially or federally on their rentals.

Municipal regulation has been implemented in some Canadian cities. Vancouver, for instance, introduced a bylaw in September 2018 under which all short-term rental operators — many of whom use not just Airbnb but also digital rental sites such as VRBO, TripAdvisor and Booking.com — require a business licence. Under the bylaw, short-term rentals are also restricted to a person’s principal residence.

Wittke struggles with the lack of regulation in Saskatchewan.

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“I don’t know all the particulars, but they’re not bound by all the same laws and criteria and tax implications as we are,” Wittke says.

Discussion around regulating Airbnb in Saskatchewan moves at a crawl, while the service’s popularity increases at light speed.

On Sept. 5, Airbnb announced its top trending destinations based on the percentage growth in bookings from last year. Regina saw the biggest jump in the world at 328 per cent, topping second-place Beatenberg, Switzerland.

For years, hotel owners in the province have been lobbying governments about the lack of regulation around Airbnb and other similar sites. Airbnb is no longer just a big-city issue. The company’s reach has extended into smaller Saskatchewan cities and towns, as well as resort communities on the province’s scenic lakes.

a man wearing a suit and tie walking down the street:  Jim Bence, the president and CEO of the Saskatchewan Hotel and Hospitality Association © Liam Richards Jim Bence, the president and CEO of the Saskatchewan Hotel and Hospitality Association

Owners of bed and breakfasts, small-town hotels and fishing resorts are nervous about competing with a growing number of Airbnbs. Meanwhile, local governments have yet to take any concrete action, and the province has been unable to get Airbnb to follow provincial tax laws.

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Four years ago, the CEO of the Saskatchewan Hotel and Hospitality Association (SHHA) began contacting his members to ask if they were feeling the effects of Airbnb. At the time, says CEO Jim Bence, members in smaller communities suspected Airbnb offerings were starting to appear, but they didn’t give it much thought.

Fast-forward a few years and those owners are definitely taking notice. While the numbers aren’t overwhelming, Bence insists even a few rentals in smaller communities can have a big impact on the area’s hotels.

“If you’ve got a little place that’s got 10 rooms or 20 rooms, well, that can take a big bite out of what you typically depend on,” Bence says.

Airbnb provided general information on rental locations in Saskatchewan but declined to provide a breakdown contrasting the number of rentals in cities to rentals in smaller centres. According to the company, there were 800 Airbnb listings and 21,000 guest arrivals in the province in 2018. Last January, the company told the Saskatoon StarPhoenix that Airbnb hosts had made $5 million in the province in 2018.

Bence says the majority of listings are in bigger cities like Regina and Saskatoon. Areas where Airbnb is increasingly becoming a factor are resort communities where people rent out their cabins, he says. At Christopher Lake, located near Prince Albert, 10 rentals were recently available on Airbnb, he notes.

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Bence is confident the tax issue is being addressed by the province’s decision last year to tweak the wording of PST regulations. The government confirmed it has reached out to online accommodation sharing services about collecting PST, but Airbnb has yet to comply.

Bence would also like municipalities to require Airbnb operators to get business licences, and rentals to be restricted to primary residences.

“The narrative out of Airbnb is, ‘Oh it’s mom and dad trying to make ends meet and they rent out one room.’ These are commercial operations and they don’t pay taxation, PST, nothing. Like, what a great racket,” Bence says.

“It’s not just a market disrupter — it is now really a big part of the market.”

The province’s bed and breakfast industry has many of the same concerns as hotels. If anything, the idea of an unregulated bed and breakfast is even more irksome, since Airbnb hosts operate a similar service without any required certification.

Bryan Tudor, executive director of the Saskatchewan Bed and Breakfast Association, says traditional B&B owners don’t want a free-for-all.

“We’re not the Wild West here. The municipalities have the authority to impose regulations, and if they impose them for legitimate bed and breakfasts, then they should make it fair so that it covers all places that are offering short-term accommodations,” Tudor says.

a man smiling for the camera:  Bryan Tudor, executive director of the Saskatchewan Bed and Breakfast Association © TROY FLEECE Bryan Tudor, executive director of the Saskatchewan Bed and Breakfast Association  

The plight of the small-town Saskatchewan hotel

Airbnb is coming to small-town Saskatchewan at a time when hotels are already struggling.

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Humboldt, a city of just under 6,000 people, has three hotels. A search on Airbnb shows three rental locations, one of which offers a room and single bed for $49 per night.

“We’re all crying for business,” says Judy Plag, co-owner of Humboldt’s Bella Vista Inn.

Plag says slowdowns in local construction, as well as fewer farmers coming into the city to hold events or weddings, has put a damper on the hotel’s catering business and restaurant. Plag also has concerns about Airbnbs popping up during sporting events, given that Humboldt doesn’t see much highway traffic.

According to Bence, other pressures facing small-town hotel owners include rising insurance costs, Workers Compensation Board premiums and high commission rates put in place by travel aggregator websites.

“We’re losing members hand over fist, and they just can’t keep their doors open,” Bence says.

Plag, who started working at the Bella Vista Inn right out of high school and became a co-owner in the late 1990s, puts her feelings on Airbnb bluntly.

“Airbnb in Humboldt is a nuisance,” she says.

The local hotels and their owners have shown a long-term commitment to the community, donating money to non-profits and sports teams, she notes. She questions whether Airbnb renters are doing the same thing, saying “(none) of that happens to the people who are just randomly renting their houses out, because they can take them on and off the market.”

Plag sits on a marketing committee put in place by the City of Humboldt and has brought up the issue. That’s as far as the discussion has gone, according to Humboldt communications manager Penny Lee. Although the city is implementing a new business licence system next year, nothing regarding Airbnb has been formally brought before city council.

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Tobin Lake is just one community in which Airbnb has caused friction between resort and cabin owners.

The resort village located northwest of Nipawin is a renowned fishing destination, especially for people seeking walleye or northern pike. The Shorebird Inn, founded 13 years ago by Brian Baraniski, is one of several resorts on the lake that now have competition from local cabin owners.

A search on Airbnb reveals five rental cabins on the lake. Resort owners have felt the impact, Baraniski says.

a dining room table:  The inside of a cabin on Tobin Lake that can be rented for $159 a night on Airbnb. The cabin has two bedrooms with three beds, and one bathroom. The inside of a cabin on Tobin Lake that can be rented for $159 a night on Airbnb. The cabin has two bedrooms with three beds, and one bathroom.

“We’re the secondary phone call for accommodations with a lot of these people because they go to Airbnb because it’s way cheaper, way less rules, a whole bunch of other stuff that goes with it.”

An entire three-bedroom Airbnb cabin on Tobin Lake can be rented for as little as $150 per night — a price Baraniski can’t match. A double room at the Shorebird Inn goes for $134. The Shorebird also rents cabins, but Baraniski says he can’t match Airbnb prices.

“I can’t compete. There’s no way I can rent any of my cabins out for $158 a night,” says Baraniski, who tried unsuccessfully to address the issue when sitting on town council a few years ago.

The prospect of more rentals is what worries him most. Right now, the tourism industry in the area is strong and his business has remained viable despite the rentals on the lake. Plus, The Shorebird’s restaurant and lounge often attracts the Airbnb guests.

But, he says, his “concern is what happens if there’s 10 Airbnbs here.”

Lori Prince-LeBlanc and her husband Maurice LeBlanc never intended to rent out their cabin at Tobin Lake.

The Saskatoon couple initially bought the cabin intending to use it with their daughter and future grandchildren as a family getaway. Unexpected financial challenges made turning it into a rental a necessity.

One year after purchasing the cabin, Maurice lost his job. The home renovation business he worked for was shutting down. Health issues at the time prevented Lori from working. To cover the mortgage payments on the cabin, they had to start renting it out.

a couple of people posing for the camera:  Lori Prince-LeBlanc and her husband Maurice LeBlanc. The couple owns a cabin at Tobin Lake, which they rent out on Airbnb. Lori Prince-LeBlanc and her husband Maurice LeBlanc. The couple owns a cabin at Tobin Lake, which they rent out on Airbnb.

Airbnb has helped the couple keep the cabin, but they’ve drawn the ire of some local business owners.

“Honestly, at the beginning when they were really in our face, we thought, ‘Is this even worth it?'” Lori says.

She and her husband have both been confronted by business owners and accused of taking away dollars from the local tourism industry, she says. The criticism stung because she knows where the owners are coming from.

After her husband lost his job, they started their own kitchen renovation company.

“I can understand their concerns too because they have bills to pay as a business owner, as well. You don’t want business taken away from you, so I understand their point of view as well, but we still need to survive too,” she says.

Lori doesn’t believe she and her husband are doing anything wrong. She says Airbnb renters are still spending money at local resorts and businesses.

Baraniski, for his part, says he has nothing personal against people renting out through Airbnb.

“They’re playing within the rules, right? It’s just the rules aren’t fair is what I’m saying.”

Lori says they asked their neighbours if they had concerns about making the cabin available for rent, and to let them know about any bad renters. Lori also checks reviews on the sites of prospective renters and has declined customers if they give her a bad feeling.

Airbnb is meant to be a temporary financial remedy for the couple. Any money generated that doesn’t go toward the mortgage is put into improvements on the cabin, which they still want their future grandchildren to one day enjoy.

“Our plan is, once I’m healthy enough, to go there and use it ourselves, for sure. That’s why we keep it, because we love it there,” she says.

Tobin Lake Mayor Robert Taylor heard from business owners when Airbnb rentals were first popping up in his community, but the number of complaints has tapered off, he says. Cabin owners are not violating any bylaws by using Airbnb, so long as the renters abide by local rules, he adds.

“Who is the municipality to tell them what they can do with that piece of ground, as long as they’re adhering to everything that every other property owner in a community has to?”

Taylor says he understands the concerns of business owners, but points out that the idea behind Airbnb isn’t a new one. Property rentals were available long before the website existed.

“You’re going to get those kind of complaints when people are renting out their personal properties and there’s other people trying to make a living in the business sector, and their places are empty,” Taylor says. “So to me, it sort of looks like a little bit of a cycle.”

It’s not about the competition, hotel owners say

Airbnb has little sympathy for hotel owners.

“Home sharing and vacation rentals have always been an important part of Canada’s tourism economy,” said Alex Dagg, Airbnb’s public policy manager for Canada, in an emailed statement.

“Today, regular people in communities large and small are making extra money sharing their space — but hotels have made it clear they want to eliminate any competition.”

Dagg says Airbnb is aware that each community has different needs. He says the company is willing to work with them. 

Bence is aware of the perception of the “big bad hotel industry” that wants to squash its competitors. He insists that’s not the case. Rather, the industry just wants Airbnb to play by the same rules, he says.

“Airbnb is here to stay. And for mom and pop, if they want to rent out a room, knock yourself out. But as soon as you turn it into a ghost hotel, then we got a problem with that.”

Running a hotel in Humboldt can be a struggle, but Plag says he has no problem competing with Airbnb.

“There’s nothing wrong with competition. Competition makes all of us better, right? But they don’t have to follow the same rules we have, so that’s not a level playing field, right? So if they had to follow our rules, then I have no problem with them existing.” 

On Hamer Bay, boat tragedy involving Kevin O'Leary illuminates a clash of different worlds .
Seguin Township, Ontario — On a rainy Thursday in late September, Neil Hamer, the last of the Hamers on Hamer Bay, stood in the gravel parking lot outside the family store and spoke into the window of a car parked in his open and otherwise empty lot. Hamer, who is 67, wore an old green golf shirt open at the neck. He had a prickly white moustache cut short over weathered skin. He couldn’t say much, he said, not about that night. But he wanted to say this: “It was wealthy people who squealed on me.” Hamer’s family goes back more than a century on the bay, a wooded cove at the north end of Lake Joseph in the Muskoka area north of Toronto.

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