Airbnb Hosts in the High Country Bring in $10 Million in Supplemental Income

Published Friday, January 25, 2019 at 12:19 pm

By Nathan Ham

Airbnb, one of the world’s largest home-sharing rental companies, has allowed property owners in the High Country to earn an estimated $10 million by renting to tourists coming in for vacations.

The numbers released by Airbnb for the year 2018 showed that Watauga County was second in the Charlotte region, bringing in $5.2 million. Right behind Watauga was Avery County with $4.4 million in extra income. 10th on the list was Ashe County with a total of $404,000 earned through Airbnb.

The data also broke down those numbers even further, indicating how many different guests were served by Airbnb hosts in the High Country. Watauga County had 46,000 total guest arrivals, Avery County had 39,000 guests and Ashe County had 4,500 guests.

Much like if a tourist stayed in a hotel or used a local rental management company, an occupancy tax is collected during this stay, which benefits each county through their respective Tourism Development Authority.

Wright Tilley, the head of the Boone TDA, says that while they do not get the exact figures brought in from rental companies such as Airbnb, VRBO and other home-sharing rental groups, they have had a positive impact around the area.

“It’s definitely a growing trend, especially for the unincorporated areas of the county that are outside the town limits. I think a good portion of their growth from occupancy tax revenue comes from Airbnb and VRBO,” Tilley said.

Tilley does caution renters that there can be some drawbacks to using companies like Airbnb, especially during winter months.

“If the owner is not in the area or is using only a cleaning service, you run the risk of something not working and not being checked on a regular basis like it would be by a rental management company,” Tilley said. “One of the benefits of a hotel versus Airbnb would be if you’re not completely sure about your trip, you typically have a 48 or 72-hour cancellation window for reservations.”

Cancellation policies can vary and are typically determined by the host party when using Airbnb. Some cancellations must be made as much as 30 days in advance. Each rental listing will have the specific cancellation policy noted and the renter must agree to that policy when booking a place to stay.

When it comes to collecting the occupancy tax, Tilley said that Airbnb makes it easy on them by automatically collecting the tax at the corporate level and then distributing it back to the TDA. For other rental groups like VRBO, that responsibility relies with the homeowner.

“When someone rents a house from VRBO, then it is up to the individual homeowner to collect and remit the occupancy tax. We do keep an eye on rentals that we find in the area to make sure that everybody plays by the same rules,” said Tilley.

There is also an automated system currently in use by other area TDAs in Blowing Rock and Beech Mountain that, according to Tilley, can keep track of rental properties that are paying the occupancy tax.

“It’s a paid service that will go in and use local tax records and GIS mapping locations that basically looks at all the rentals on Airbnb and VRBO and compares it to a list of known rental properties that are paying their taxes and those that aren’t,” said Tilley. “We are looking to see if that is going to be success for Blowing Rock and Beech Mountain before we look into it.”

Tracy Brown, the Executive Director of the Blowing Rock TDA, says that being able to keep track of these rental properties is vital to knowing who is paying the occupancy tax and even who may be renting a home or apartment out that is not supposed to be rented.

“We contracted with a company called STR Helper and what they do is they sweep the Internet daily to check for any properties in our town that are renting through various online rental agencies. This program finds them and then we compare that info and data with our tax office to see if in fact that property is paying that occupancy tax,” Brown said. “When we first started sweeping, we found about 200 properties in Blowing Rock that were renting, of that about 25 or 26 were in areas where they were not supposed to be renting. We would not have caught that without that program. Of the 174 units renting here, we have found about a dozen that were not paying their taxes and they were claiming they did not know they had to pay taxes.”

Brown says that the use of Airbnb in Blowing Rock has had a lot of positive impact as well with one of the big pluses being that large families can rent a big house to stay in together, rather than reserve several hotel rooms that could be cost prohibitive.

“From a destination standpoint, it gives the customer an option that they are looking for because the way we travel is very different than it was 30 years ago. No one thought of the shared economy business model back then. The folks that are renting Airbnb units are typically traveling in groups, and for a destination town like Blowing Rock, that’s fantastic,” said Brown. “One unit brings in more people and it keeps multigenerational travel coming to our destination. You’re typically not going to rent 10 hotel rooms, but you would rent a big house to put the whole family there.”

As there is with most anything, there are some issues and problems that have to be dealt with.

“The downside to it is from a rental company standpoint or a hotel standpoint is all of a sudden you’ve got a lot of unregulated competition. Anybody can now set their home or apartment for rent and yet they don’t have to go through the same hoops that a hotel or rental agency would have to go through. There’s a lot of unfair competition out there,” said Brown. “One issue we have in Blowing Rock is we have ordinances in place that don’t allow for short term rentals in some neighborhoods. That has caused a bit of an issue with some rental companies. Some places can only rent 28 days or more at a time. Most vacations now are shorter, more frequent trips, not like in the old days when you took a two week vacation, that just doesn’t happen much anymore. It’s good that we have the opportunities that we have now that we didn’t have before, but tough on rental companies that have been doing business in a traditional way.”

Overall, with the changing economy, the changes in the ways that families take vacations and the variety of activities that families like to take part in on a trip, having more options for renters is the biggest key.

“At the end of the day, we’ve got more options for customers and they’re clearly using that service and we’re benefiting because more people are able to stay here than perhaps in years past. We want guests to have access to as much information about their vacation destination as we can possibly give them. We want them to have a good time when they get here and tell everyone back home what a good time it was in Blowing Rock and we want them to come back,” Brown said. “Over the years, people that vacation here several times think they want to live here. That’s how you convert a weekend visitor to a weekend resident or a seasonal homeowner. That’s giving them the option to come in and stay in a place they couldn’t normally stay in, immerse themselves in that culture. That’s where you can really sell them on becoming residents either full time or part time.”

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