Imagine a lodging company with places to stay in 34,000 cities and 191 countries and more than 2 million accommodation listings. This is airbnb, founded in 2008 in San Francisco by Joe Gebbia, Brian Chesky, and Nathan Blecharcyk.
Airbnb is about a special experience when traveling and a homestay. Many airbnb guests not only want to save money, but are interested in learning about how people live and are often interested in making friends and understanding new cultures. Stay in an apartment, in a castle, in a tree house, a beach cottage or a garage – airbnb offers all of it.
Opportunities like this may not go well with major hotel groups in regions where travel and tourism is a major industry. Hotels and resorts are in the accommodation business and don’t want private citizens to interfere with their income. They want tourists to buy $15 dollar Mai Tais and not go to a supermarket and make it themselves on their own lanai overlooking the ocean.
In a state like Hawaii, the power that major hotel companies have is great. Tourism is the number one industry in the Aloha State, and when a hotel group says NO, the government and the governor listens. Hotels in Hawaii get away with a lot. It includes not paying accommodation taxes on questionable “mandatory resort fees,” and in thinking dealing with homeless people is a matter of giving to a charity.
In Hawaii, hotels and resorts had a strong message to Governor Ige, and he listened, and as a result, he vetoed a bill to allow AIRNBN to collect taxes from families that host a paying a guest in their home.
The Governor’s argument is he feels allowing “illegal” vacation rentals in the state will take from the housing shortage and make the homeless issue even worse. Of course, no tourist wants to stay at an apartment in the middle of Oahu – they want to stay in an apartment close to the beach. You won’t find homeless shelters or affordable housing beachfront in Waikiki – but the message came out loud and clear for the governor to act.
It was not about collecting millions of additional taxes, it was not about listening to citizens that make an extra dime to afford expensive rent to let tourists stay in a spare bedroom, it was about major corporate interest in the hospitality industry.
Hawaii Senator Schatz in Washington echoed the Governor’s opinion, so status quo remains in the Aloha State. Illegal non-taxable vacation rentals will remain in Hawaii unless the next step is to make airbnb illegal altogether.
Whether an apartment for a night, a castle for a week, or a villa for a month, airbnb connects people to unique travel experiences, at any price point. And with world-class customer service and a growing community of users, airbnb is the easiest way for people to monetize their extra space and showcase it to an audience of millions.
The governor and opponents to the bill argued that the bill would undermine efforts to crack down on Hawaii’s pervasive illegal vacation rentals.
“When you look at this bill from purely the state’s perspective and the state’s desire to collect the state taxes owed, this measure would provide a mechanism to allow us to achieve this goal,” Ige said during a Tuesday press conference called to discuss his veto. “However, the use of an intermediary as a tax accommodations broker also provided a shield for owners who choose not to comply with county laws, and this was a big concern of mine.”
Ige said that the bill would have encouraged the illegal vacation rental market “at a time when affordable rental housing is in such short supply in our communities and homelessness remains to be a critical concern statewide.”
Airbnb has executed similar tax agreements with other states in recent weeks, including South Carolina, Pennsylvania, Arizona, and Connecticut.
The company launched a social media campaign in recent weeks to pressure the governor not to veto to the bill.
Airbnb issued this statement: “Hawaii legislators, business leaders, tourism officials, and even Governor Ige’s own tax department worked hard to craft this sensible measure that would increase transparency and allowed the state to receive tens of millions of dollars in tax revenue. We are deeply disappointed that Hawaii did not embrace streamlining tax collection for today’s economy, unlike the other 190 jurisdictions where we collect and remit on behalf of our community.”