Saturday, February 11, 2017

Nashville’s Airbnbs get taxed, but swank hotels get the benefits

by Chris Butler, Tennessee Watchdog - Nashville’s Airbnbs get taxed the same as hotels but don’t get the same benefits.

Some of the city’s palace-like hotels pay taxes, although they get some of that money back through corporate welfare.  But the people who run the more modest Airbnbs and other home-sharing options get no such welfare. They say they don’t need it.

This is happening as Nashville Metro Council members debate whether to impose licensing
requirements that could put some of the city’s Airbnbs out of business.
A rooftop bar is one of the many amenities at the new
 Westin Hotel in Nashville (photo courtesy of
the Westin’s Facebook page)

As reported in an exclusive video, three new ritzy hotels downtown got $27 million in corporate welfare. Developers are building another posh hotel across the street from the Music City Center, and city officials gave a fourth hotel $4.5 million.

Problem is, many tourists can’t afford to stay in these expensive hotels. For one, the Westin, has a rooftop bar, a lounge, and an infinity pool overlooking downtown Nashville from the 27th floor.
Nashville Metro Council member Burkley Allen, who has pushed hard to regulate Airbnbs, defended the corporate welfare in an email to Tennessee Watchdog.

She said it helps the Music City Center. “The city determined that it was a better use of taxpayer dollars to provide incentives to a very small number of hotels to provide the rooms needed to complement the convention center, which has been an economic engine for downtown since it was built in 2010,” Allen wrote. “The revenue does not go to the hotels, but to promotion of the city around the world. The promotion of hospitality and tourism benefits anyone who provides hospitality.”

Greg Adkins, spokesman for the Tennessee Hospitality and Tourism Association, said those hotels got that money in exchange for offering group rates for convention center events.  “About 90 percent of the hotel rooms in town don’t get subsidies,” Adkins said.

Mark Cunningham, spokesman for the Beacon Center of Tennessee, a Nashville-based free-market think tank, said Adkins is only defending his industry at the expense of Nashville’s homeowners and
taxpayers. Many of the hotels that got corporate welfare from Nashville officials did so in exchange for group rates at the Music City Center pictured below (photo by Chris Butler).

“Airbnbs are cutting into the hotel industry. Of course, he doesn’t like that.” 

“Even if hotels are getting money and others aren’t, that just means the problem is more widespread than we initially thought. You are subsidizing new hotels at the expense of Airbnbs and all the hotels. I’m sure those hotel owners don’t like it, either.”

A different kind of tourist

As reported, these home-sharing options operate much like an Uber app. Instead of people using their cars to compete with cab drivers, they share their homes.  Shan Canfield, who runs an Airbnb in East Nashville, said home-sharing options differ from hotels in many respects and can lure more tourists who otherwise couldn’t afford the Westin or another upscale hotel.

“I think what Airbnbs have targeted, maybe unwillingly, are couples who like to travel together,”
Canfield said.

Berkley Allen
“If you think back 20 to 30 years ago, what we have are more like vacation rental properties, where you have your friends or family. You can bring pets. There’s a kitchen. It is a different model.”

According to a recent NewsChannel 5 report, council members are pushing for an amendment to temporarily stop issuing new city permits for non-owner occupied short-term rentals. It’s a move to determine how best to regulate home-sharing properties.

Alece Ronzino, who also runs an Airbnb in East Nashville, said the proposed regulations are unfair and, if enacted, will hurt her revenue stream.  “I am fine with not receiving the subsidies, but I shouldn’t be taxed in the same way as a hotel,” Ronzino said.

Contact Christopher Butler at 
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