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Airbnb bites into Saratoga hotel business

Airbnb bites into Saratoga hotel business

Both Saratoga County and city of Saratoga Springs losing potential room tax revenue
Airbnb bites into Saratoga hotel business
Saratoga Arms' General Manager Amy Smith stands on the front porch of the boutique hotel in Saratoga Springs on Friday.
Photographer: Erica Miller / Gazette Photographer

SARATOGA SPRINGS -- About 60,000 people stayed at Airbnb locations in Saratoga County this summer, making Saratoga Springs and environs the busiest place in the Capital Region for the room-sharing service.

With the service that lets people lease parts of their homes becoming more popular, local officials are growing increasingly concerned about losing out on the kinds of sales and room-tax payments that hotels, motels and bed and breakfasts pay, money that is usually used for tourism marketing.

"That number is huge, and our occupancy tax has been been pretty flat, so there's a taxation-equity issue," said Saratoga Springs Finance Commissioner Michele Madigan. "We do think we're staying flat, and Airbnb is definitely generating revenue, and it's continuing to rise."

Airbnb announced this past week that there were 221,600 guest arrivals at its host properties in seven Capital Region counties between Memorial Day and Labor Day. Saratoga County sites attracted the most people -- 60,000 guests -- many staying in Saratoga Springs or nearby.  Airbnb said that generated $13.2 million in income for the hosts.

Warren County -- home to Lake George and other popular southeastern Adirondack destinations -- had 50,100 Airbnb visitors, and Greene County -- in the Catskills -- had 32,100. At the lower end, Albany County had 21,500 Airbnb stays, while Schenectady County trailed with 5,500.

Short-term rentals have become controversial in other tourism-reliant communities. There's currently a public debate about their impact on community character in Lake Placid in the Adirondacks, which faces some of the same issues that Saratoga Springs does: hotels and restaurants are central to their local economies, and housing is becoming unaffordable for many of the people who work in those industries.

Airbnb's website currently lists more than 300 properties offering rooms or houses in the Saratoga area. That number is dwarfed, though, by the number of traditional lodging rooms: There are currently 2,100 registered hotel/motel/BandB rooms in Saratoga Springs, and 3,700 rooms in Saratoga County.

In general, Airbnb business is growing. While summer-to-summer comparisons weren't available, for all of 2018 Airbnb reported 35,800 arrivals in the county, with 830 hosts -- nearly double the number of hosts signed up with Airbnb in 2017. In that year, 17,800 guests stayed at its short-term rental properties in the county.

In Saratoga, there's acknowledgement that short-term rental companies like Airbnb have an impact on traditional hotels, motels and bed-and-breakfasts, which are state-licensed and regulated by both state and local inspections.

"I think that Saratoga is a wonderful place for tourists to come, and we have an enormous number of legal options for people to stay, hotels and motels and bed and breakfasts," said Amy Smith, general manager and part-owner of the Saratoga Arms Hotel, a boutique lodging in a historic building in downtown Saratoga Springs.

She noted that licensed establishments are required to go through code and fire safety inspections, have appropriate liability insurance coverage, and comply with disabilities-access laws.

"From our perspective, they are not regulated, and the impact on the neighborhood is hard as well," Smith said. "They don't pay the same taxes, we have seven percent sales tax and six percent room tax, so I would think the municipalities would care."

While hotels and motels have commercial fire safety systems that most homes don't, "our hosts are sharing homes in which they live, and we encourage them to meet standards and provide safe environments for their guests, and to be good neighbors," said Airbnb spokeswoman Liz DeBold Fusco. "There are also a lot more boutique inns and bed and breakfasts now using the platform."

How much Airbnb rentals are hurting hotel business is hard to know, Smith acknowledged. 

"For us personally, we're up year-over-year, but I believe there is a certain percentage of revenue we don't receive because of Airbnb," she said.

With the Saratoga Race Course's eight-week racing meet having just concluded, city officials are waiting for firm numbers of hotel and motel room occupancy, but Saratoga County Chamber of Commerce President Todd Shimkus said this week he believes Airbnb rentals are having an impact on the city's hotel business.

There may also be an impact on city and county room tax collections. In the Capital Region, Airbnb has agreements to pay room occupancy tax on behalf of its hosts in Schenectady, Fulton, Montgomery, Schoharie and Rensselaer counties. Airbnb currently has agreements with 29 counties outside New York City and Long Island, DeBold Fusco said.

"We reach out to all the counties we do not have agreements with," she said.

Airbnb does not have a room tax payment agreement with Saratoga County, so the county and city are losing out on room occupancy tax revenue, though how much is unknown. The city has a five percent room tax, on top of the county's one percent tax.

There have been recent "positive" discussions about the county developing a law that would require room tax payments not just from Airbnb but all short-term lease companies, said Darryl Leggieri, president of the Saratoga Convention and Tourism Bureau. He said the goal is to have possible legislation before the county Board of Supervisors in 2020.

"The numbers are significant, and they're continuing to grow," Leggieri said. "Short-term rentals are here to stay. We understand that people like to experience a destination in that way, so we want to level the playing field. It really does negatively impact our hospitality community. We're willing to work with the short-term rental communities to come to an agreement."

Madigan said the city doesn't have a firm handle on the number of Airbnb properties in the city, and any negotiation for getting room tax revenue from short-term rentals needs to be through Saratoga County. The city receives about $480,000 from the room-occupancy tax.

The city room tax is a major source of revenue for both the Saratoga Convention and Tourism Bureau and the Saratoga Springs City Center, which hosts conventions and meetings, and their officials are concerned about losing revenue because of short-term rental companies.

"For both the Convention Bureau and City Center, a large part of our funding mechanism is from hotels and  motels and bed and breakfasts, but there is no mechanism in state law that lets us collect that revenue from companies like Airbnb," said Ryan McMahon, the City Center's executive director. "But those properties are benefiting from the marketing and promotion done by the bureau, the chamber of commerce, and us at the City Center, yet not doing any of the financing mechanism that lets us do that."

Airbnb supports legislation that would establish statewide rules for Airbnb and similar services to collect local room and sales taxes.

"As we mark yet another historic summer and look ahead, our goal remains to work with the state and counties to ensure short-term rentals can continue to play a strong role in the New York economy, including by generating hundreds of millions of dollars in tax revenue," said Josh Meltzer, head of Northeast public policy for Airbnb.

Local businesses are also trying to sort out the impact of this year's change in the racing schedule, with the track open for longer, but with racing taking place only five days a week, instead of the traditional six days a week.

Putting further pressure on individual hotels, the competition among licensed lodging facilities has grown: Saratoga Springs area has also added hundreds of new hotel rooms in the last 15 years, with new chain hotels opening in both downtown and in outlying parts of the city, and a number of new hotels also opening in the Malta and Clifton Park areas, less than 20 minutes from Saratoga.

"Saratoga is still a great destination to visit, and we welcome all visitors," Leggieri said.

Airbnb last week also released summer numbers -- much lower numbers than in the Capital Region -- for the Mohawk Valley. It concluded that Old Forge, Utica, Gloversville, Long Lake and Rome were the top destinations, with most of those visitors coming from elsewhere in New York state.

Reach Gazette reporter Stephen Williams at 518-395-3086, [email protected] or @gazettesteve on Twitter.

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