The Real Deal Miami

Airbnb spreading in South Florida — with mixed response

February 11, 2016 09:45AM
By Hortense Leon

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The downtown Miami skyline and Airbnb founders Joe Gebbia, Nathan Blecharczyk and Brian Chesky

The downtown Miami skyline and Airbnb founders Joe Gebbia, Nathan Blecharczyk and Brian Chesky

In the last few years, Airbnb has become wildly popular, shaking up the hotel market in many locations, including South Florida.

According to a recent study by CBRE Hotels’ Americas Research, not all markets in the U.S. are being impacted equally. In the 12-month period covered by the CBRE study — from October 2014 through September 2015 — more than 55 percent of the $2.4 billion spent in the United States by Airbnb users was spent in five cities: New York, Los Angeles, San Francisco, Boston and Miami.

“It would seem like a logical [development] in South Florida,” Leland Pillsbury, chair of Annapolis, Maryland-based Thayer Lodging Group told The Real Deal. “There’s a lot of product here — condos, luxury rentals and second homes,” that can easily be adapted to be short-term rentals, he said.

On the consumer side, Pillsbury said, there is no question that travelers like the choices that Airbnb offers. “In many cases, they are better options than a hotel room, especially for families,” he said.

In spite of the growth of Airbnb’s business, Scott Brush, a Miami-based lodging industry consultant, told TRD that when he talks to his students at Florida International University — where he is an adjunct lecturer in the School of Hospitality and Tourism Management — many of them, who are already in the lodging industry, say that they are not worried about competition. “We offer so much more than an Airbnb,” he said they tell him. “But Airbnb is putting up a lot of people,” Brush said.

In fact, a lot of hoteliers are thinking about how to respond to the Airbnb juggernaut and some are adopting an ‘If you can’t beat them, join them’ attitude. In late January, Steve Joyce, CEO of Choice Hotels International, told that his company is planning to launch a platform that would allow consumers to rent units from third-party vacation rental management companies. The launch could take place as early as mid-February. The vacation rental platform will reward renters with points from the Choice Privileges program and, in the future, Choice might actually get into the consumer-to-consumer rental business itself, said Joyce.

“The advantage for hotel franchises of partnering with Airbnb,” Guy Trusty, president of Lodging & Hospitality Realty in Miami, told TRD, “is that (it) can help and not compete with their hotels.” Airbnb is really just another reservation system, an intermediary like Expedia, that charges hotels a fee for booking rooms, he said.

Nevertheless, not all hoteliers see Airbnb in this light, not only in South Florida, but nationally. “It seems reasonable that Airbnb will impact hotels in two ways,” said R. Mark Woodworth, senior managing director of CBRE Hotels in a release that accompanied the CBRE report. “For existing hotels, the growth of average daily rates will most likely be curtailed. The fluid nature of Airbnb’s supply suggests that traditional hotels’ historic price premiums realized during peak demand periods will be mitigated. The other impact may be on new hotel construction.”

Hotel owners and their guests are not the only ones being impacted by the Airbnb phenomenon, Pillsbury said. Acknowledging that many people like the sharing economy in general, they are not all thrilled about having an Airbnb in their neighborhoods, he said. Nearly 100,000 residents in Broward County said they wanted Uber last summer, Pillsbury said, “but people don’t necessarily want an Airbnb operation going on next door, because of all the partying, the noise and the trash that (these units can) generate.” And the hotel industry has charged that Airbnb units pose life safety issues, because of a lack of sprinkler systems, smoke alarms and building accommodations for the handicapped, he said.

But some municipal officials are taking note of these concerns. In August, the city of Fort Lauderdale passed an ordinance regulating vacation rentals that are not timeshares. Among the requirements for property owners, in order to be officially registered with the city so that they can legally run a vacation rental property, is that their properties pass a maintenance and life safety inspection. In short, government is starting to set some rules for an industry that previously had few, if any.