Should Airbnb sites on Route 66 undergo more regulation?

While Airbnb has been controversial in larger cities for years, the use of people’s homes for overnight lodging is being cussed and discussed in smaller cities — including those on Route 66.

WGLT, a public radio station at Illinois State University, recently dived into the issue and the case of Kevin Lewis’ 103-year-old house in Bloomington-Normal, who has listed it as an Airbnb destination. A variety of people have rented the house for overnight stays, including an author writing about Route 66.

Lewis said he began listing the house on Airbnb during a financial slump two years ago.

“Financially, I don’t need to do it anymore. Now I do it because I like it. I’m a schmoozer and a people person anyway,” Lewis told the station. “I’ve become good friends with (my guests).”

The station explained why Airbnb sites are drawing the ire from city governments and the hospitality industry:

While cities like Chicago began tackling Airbnb regulation years ago, downstate markets like Bloomington-Normal and Champaign are only reaching that point now.

On one side are traditional Bloomington-Normal hotels, many of which are struggling with low occupancies and see Airbnb hosts as unfair competition because they don’t pay the same local hotel taxes or abide by the same guest-safety rules. On the other side are Airbnb’s loyal guests and hosts who say home-based, short-term rentals meet a consumer need that hotels simply can’t replicate.

Caught in the middle are local governments like Bloomington and Normal, which have seen flattening (or falling) tax revenue and consider Airbnb as a one potential way of re-filling the coffers.

The Bloomington-Normal Hotel and Lodging Association has asked the Bloomington and Normal councils to take “swift” action on Airbnb regulation. Normal City Manager Pam Reece told GLT city staff is researching the issue. Bloomington Mayor Tari Renner said he too is interested in the issue.

“This is an issue that demonstrates how technology has driven a market faster than we can react to it,” Reece said. “We’re willing to look at the topic and figure out what solutions we could potentially come up with for the problems associated with short-term rentals and their impact, but there’s no easy solutions.”

WGLT noted Airbnb collects state hotel taxes for bookings in Illinois — about $9.3 million last year. But Airbnb doesn’t collect local lodging taxes. In the Bloomington-Normal region, existing hotel taxes amount to nearly $3 million a year.

Some city officials say Airbnb sites are skirting public-safety regulations and taxes. Therefore, they say, more regulation is needed.

Searches of the Airbnb website show no shortage of Airbnb sites even in small towns. Looking for “Route 66” on the site revealed hits in Groom, Texas; Staunton, Illinois; Albuquerque; and Holbrook, Arizona. And more sites could be found in Route 66 towns.

One notable Airbnb site in Vega, Texas, comes with a Route 66 theme. And its owner is trying to restore the historic Vega Motel in town.

The public-safety concerns probably are overblown. If a customer at an Airbnb site has a bad experience, his or her rating after the fact will knock down interest from prospective travelers. It would be a self-correcting problem.

However, the tax angle becomes harder to dismiss. It’s a fairness thing — if a lodging establishment is required to collect hotel taxes, Airbnb sites should collect them, too.

If a municipality refuses to enforce such rules, Airbnb owners ought to at least buy a membership to the local chamber of commerce.

That said, Airbnb sites remain good options for travelers who want to stay overnight in an area that lacks historic and quality Route 66 motels (Edmond, Oklahoma; St. Louis; and Amarillo come to mind). But if you wish to stay in a town that has no shortage of vintage lodging, such as Tucumcari, New Mexico, it’s best to simply pass Airbnb by.

(Image of the Airbnb logo via its Twitter account)

2 thoughts on “Should Airbnb sites on Route 66 undergo more regulation?

  1. Any short term lodging should follow the same guidelines/requirements and the same tax collection obligations. But public safety regulations are a joke. There are many properties along Route 66 and the rest of the world, be them STRs (short term rentals), mom & pop motels, and even major chains that are not compliant with taxes and safety. As a motel owner and a former STR owner (frequent STR renter), I do not feel threatened by STRs… a totally different guest mindset for the informed guest. The third party marketers known as “OTAs” or online travel agencies are strangling travelers and properties by limiting expectations. People need to value reviews only and stop booking through a middle man (VRBO, AirBNB, Hotels.com, Expedia, etc.) who charges 15%+, throttles communication and expectation management so they can just get 15%+.

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