B&B Blog

News and updates from the Bed & Breakfast Association

Thursday 30 January 2014

Spare room "sharing" websites: a ticking time bomb?

The website Airbnb, which allows home-owners to sell their spare bedrooms to paying guests on a B&B basis, boasted this week to be contributing £502 million to the UK economy, and to have "supported nearly 12,000 jobs" in the UK last year. Really? If much of this £502m was taken from 'bona fide' B&Bs and hotels, then there would have been a net loss in livelihoods "supported". And that is before mentioning the very serious questions about insurance, fire safety, and tax that hang over this subject unanswered. 

Members tell us they are concerned about unfair competition from home-owners selling their spare bedrooms on a "B&B" basis to paying guests through websites such as Airbnb, Wimdu, One Fine Stay and others.

What many see is that there is one rule for us, and one for Airbnb users (ie, no rules).

These websites are like those music and film "file-sharing" sites that may have kept within the letter of the law themselves, but only existed (and grew lucratively) because 99% of their users broke the law. The "file sharing" sites came close to crippling the music industry, costing it billions. Is the hospitality industry next?

Airbnb hosts are almost all (it seems) without public liability insurance, and non-compliant with fire reguations, food hygiene laws, planning regulations etc. - which even our smallest members, as bona fide B&Bs, must comply with, sometimes at disproportionate expense.

That is not even to mention whether the hosts pay tax. And while we are on that subject, could Airbnb explain how much corporation tax they themselves pay in the UK on that £502m of sales they say they make here? Our research so far seems to indicate that the answer is "none", because sales are booked to US parent company Airbnb Inc., rather than Airbnb UK Ltd. which - it seems - is loss-making (though full accounts are not available to the public).

These websites (like the file-sharers) are companies that only exist because law and enforcement have not kept up with technology.

We are only asking for a level playing-field: either these regulations should not apply to ANY very small B&B (for example, by exempting properties with up to three letting bedrooms), OR they must be applied fairly and proportionately to all: to Airbnb hosts as well as "bone fide" B&Bs. 

The worst of all worlds is what we have now: established, visible B&Bs with even one or two rooms have to comply (often at great expense), whilst their neighbour who offers two or three B&B rooms through Airbnb, Wimdu or whatever is untroubled by any regulators and can pocket the compliance costs his neighbour is bearing. In this, the law (currently) is an ass.

Is this a "ticking time bomb"? Many thousands of guests are staying with "hosts" booked through a website, where the host may not have public liability cover, and may not reach the fire safety standards the law requires for paying guests.

Likewise many "hosts" using Wimdu, Airbnb etc. may be blissfully unaware - until disaster strikes - that their household insurance may be invalid and their mortgage terms breached by taking paying guests.

Airbnb's CEO, Brian Chesky, has claimed "we would love to be regulated - we want fair regulation": does he mean it? 

Will our sleepy regulators wake up and do their jobs? If not, established B&Bs will continue to be damaged by unfair competition, and suffer the burden of compliance with regulations that are NOT applied to their neighbours.

This is an issue we are pursuing vigorously with regulators, with the media - and with the websites themselves.  Watch this space!