Short-term rentals benefit Michigan
Michael O’Neil, Published by Oakland Press on December 15, 2017
Witnessing the The Game live at the Big House in 2007 will always be one of my most cherished memories. Beanie Wells and Mike Hart. James Laurinaitis and Chad Henne. And I was there.
The Game — and the stadium experience — lived up to the hype. I could see why hundreds of thousands of football fans make the pilgrimage to Ann Arbor every year. The only problem? Every hotel in Ann Arbor was sold out. That evening, we witnessed a mass exodus of fans who were able to experience Michigan Stadium but denied the opportunity to stay the weekend and experience the actual city of Ann Arbor.
The limited hotel inventory clearly weakened the economic impact during football weekends. Hundreds if not thousands settled for day trips, rather than staying longer and spending more money within the community.
In recent years, the city has achieved a new way to address this challenge and take full economic advantage of the surge in visitors during football weekends. They’re expanding lodging capacity and hosting more visitors through the utilization of existing resources — the homes of everyday Ann Arbor residents.
The rise of short-term rental platforms like Airbnb allows locals to turn extra rooms into economic opportunities and accommodate demand during Michigan games and other large events associated with the university. Through just Airbnb, over 600 Ann Arbor residents share homes for supplemental income, and half simply share an extra, unused room in the home in which they live. During 2017 football weekends, as Ann Arbor hotels filled to capacity, the local home sharing community welcomed an additional 6,500 guests and earned $1.2 million in the process. That’s income staying within the community, in addition to the extra revenue generated for restaurants and other small businesses.
The Ann Arbor hosts represent a core component of the 5,700 Michigan residents who share their homes via Airbnb. These homes have emerged as meaningful drivers of Michigan’s growth. In the Detroit metro area, they’re expanding lodging capacity for major events like the Auto Show and Detroit Movement, while activating economies in neighborhoods that lack hotels. In lakefront towns like Traverse City and Holland, short-term rentals facilitate additional visitors and revenue once hotels reach peak occupancy during the summer high season. And in cities like Flint and Saginaw still working to get back on their feet, local middle-class hosts are serving as ambassadors for their community and helping to revitalize their cities’ brands.
To be sure, not quite everybody appreciates the benefits of home sharing and short-term rentals. The powerful Lansing and Washington D.C. hotel lobbies have aggressively attacked the rights of Michigan residents to share their own homes, out of concern that Airbnb’s popularity will affect hotel revenue. They’ve even recently set up front groups masquerading as “grassroots campaigns” attempting to scare Michigan into rejecting the economic benefits of short-term rentals, in a transparent attempt to protect their own revenues against perceived competition.
It’s unfortunate, because for Michigan’s Airbnb hosts to win, nobody has to lose. Michigan’s hotels are achieving record revenues even as the statewide vacation rental community has grown. Home sharing empowers the state to cast a wider net to prospective travelers whose budgets simply cannot accommodate higher hotel rates.
We welcome an even playing field, as evidenced by our recent collaboration with the state to collect and remit the 6 percent use tax — same as the hotels pay — on behalf of our Michigan hosts. We also welcome fair regulation of short-term rentals, but those rules should be simple and fair. State lawmakers have recently introduced new legislation — SB 329 and HB 4503 — which would simply prohibit outright bans on short-term rentals. By taking the nuclear option off the table, this law would encourage communities to collaborate with local hosts on commonsense rules that protect both economic growth and quality of life.
By protecting home sharing and expanding opportunities for visitors to experience Michigan authentically, we can collectively continue to shine a global light on the qualities that make Michigan so special.
Michael O’Neil is the America’s partnerships director for Airbnb.