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Published on Friday, February 7, 2014

Are hosting websites like Airbnb a ticking time-bomb?

Airbnb and other websites that enable home owners to let spare rooms to paying guests are putting Britain's many thousands of B&Bs at a competitive disadvantage, writes David Weston, chief Executive of the Bed & Breakfast Association.

"British B&Bs should be celebrated - not only are they at the heart of sustainable UK tourism, contributing billions to local (especially rural and coastal) economies, but the best are world class: last month, TripAdvisor's 120 million users effectively voted British B&Bs the World's best: we have the top two B&B in the world, and six of the top 10.

The B&B Association represents the 25,000 or so UK B&B and guest house owners - and we have made huge efforts to lobby Government and regulators to try to get common-sense and proportionate regulation.

The problem is that so many laws designed for bigger businesses (like hotels) also apply to B&Bs.

In 2006, for instance, the old "six bed rule" for fire regulations disappeared, and a new law introduced which applied to anyone letting a room to paying guests: even one room, for one night.

Many of our members have three or fewer guest bedrooms, but have had to pay several thousand pounds to install fire precautions to comply. We have been told: "the law applies to everyone".

Does it? Airbnb and similar websites have grown exponentially by enabling anyone with a spare bedroom to simply advertise for guests on their sites. Do they comply with the above fire regulations, have planning permission or public liability insurance? The websites say it is not their problem and they are not responsible. They say it is up to the "hosts" to comply and the regulators to regulate.

But the cash-strapped regulators seem to be asleep on the job - it is easier to check compliance with a "visible" B&B than its neighbour, which has no sign outside but may be (anonymousy) on a website. So in practice, there is one rule for "bona fide" B&Bs, and one for Airbnb users (ie, no rules).

We don't want more regulation - just a level playing-field: either the safety regulations should not apply to ANY very small property (for example, by exempting those with up to three letting bedrooms), OR they must be applied fairly and proportionately to all: to Airbnb hosts as well as bona 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 or Wimdu is untroubled by any regulators and can pocket the compliance costs his neighbour is bearing.

I'm not even going to get onto the issue of whether these private individuals are paying tax on the income they receive from guests.

These hosting websites are like those music "file-sharing" sites that only existed (and grew lucratively) because 99% of their users broke the law. The "file sharers" came close to crippling the music industry, costing it billions. Is something similar starting to happen in hospitality?

Is this a "ticking time bomb"? Thousands of guests are staying with "hosts" who may not have public liability cover, and may not reach the fire safety standards the law requires for paying guests.

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

Will our sleepy regulators wake up and do their jobs? Will the playing-field be levelled? Or will action only be prompted by a tragedy?"



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  • Just Compete!

    As you say you have a better product and more assurances to go with it: quality, track-record, standards enforced by regulation etc. All you need is an app - get to it!

    By Simon Lowe, Friday, February 14, 2014

  • The tax man

    Paul Davis, thank you for your comment on my piece. The tax man would need to pro-actively find the Airbnb "hosts", which means identifying them first - which means (in most cases) getting Airbnb's co-operation. I will be asking HMRC whether this is happening...

    By David Weston, Friday, February 14, 2014

  • File sharing

    A little off topic but I am not sure that you have done your research when mentioning "file sharing" sites, which at no time have ever come close to "crippling the music industry". Whilst this maybe the spin that the music executives would have everyone believe, what they truly mean is that they were not making as much profit as before. The music industry failied to move with the digital age and hung onto an outdated business model which pushed people to find alternative ways to find their favourite music at a price they were willing to pay. I won't get into the stealing versus freedom of sharing discussion here.

    By James Nickerson, Thursday, February 13, 2014

  • Short term sites

    To resolve this issue government should modernise legislation which differentiate between big hotel regulatory requirement & small accommodation (of 2-5) regulatory requirement, This will help the b & b owners and the short term rental hosts. Most hosts do pay tax & the government has a unique opportunity to earn more tax revenue by simply collection taxes from the websites themselves. Most short term rental sites have insurance cover therefore the point raised in this article is invalid. One must not forget,most B&B's use the short stay rental sites as marketing channels therefore any excessive clampdown will be futile for B&B's themselves in the long run. Short term rental sites will not go away,the best way to ensure everyone benefits ( the paying tourists,the property owner,the travel industry & the government) is through better regulation not tough regulation. Max

    By Max Willems , Sunday, February 9, 2014

  • Just alert the tax man!

    Simple, the chances are home owners letting rooms on the side are not declaring the income generated to inland revenue. The double effect would be 1. If they have to pay tax, then it could make those people letting the rooms think twice about advertising. 2. Especially if the tax man targets these web sites for income potential. It is all there for the enterprising revenue officer! Booking calendars and price lists are a mine of information when it comes to working out a person's income. I mentioned this on a travel forum for Kefalonia, because the Greek taxman was looking. WOW! the number of booking calendars that vanished over night! Now I wonder if inland revenue here would be interested in paying commission to whistle blowers???? - lol!

    By Paul Davis, Sunday, February 9, 2014

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