B&B owners vs. online hosts who don’t pay city taxes

Bed and breakfast operations in New Orleans tout their old-fashion charm as an enticement to visitors, but face a threat from a new, technology-driven competitor that apparently is flouting city law.

Airbnb.com, a travel website that lets homeowners advertise rooms for short-term rental, has become increasingly popular in recent years, expanding to 31,275 cities worldwide. The site recently listed 385 rooms for rent in New Orleans. The website is often described as a cheap, convenient and relatively safe way to book travel accommodations.

In New Orleans, it’s also apparently illegal. A city ordinance prohibits unlicensed property owners from renting accommodations to anyone for less than 60 days in the French Quarter and less than 30 days elsewhere in the city.

A spokesman for Airbnb.com declined to be interviewed for this article.

Bonnie Rabe, who owns the Grand Victorian Bed & Breakfast on St. Charles Avenue, argues that Airbnb has given private property owners an unfair advantage over B&B operators who must pay taxes and fees to rent rooms at their businesses.

Airbnb.com lets property owners advertise rooms and charge rates at their own discretion without having to pay the city’s tax on hotel and motel rooms. The city taxes B&Bs up to 13 percent depending on the size of the property.

“We don’t find we are losing business to them, although I’m sure, eventually, we will,” said Rabe, who is also president of the Professional Innkeepers Association of New Orleans, which represents 55 B&Bs.

To stem the possible loss of customers to Airbnb.com, PIANO is taking part in the “Better Way to Stay” campaign, which pokes fun at cut-rate travel websites. Its online video shows a traveler arriving at her destination, implying that she booked the room through a questionable website. Opening the door to her accommodations, she finds a partially deflated air mattress on the floor of her room.

The campaign, sponsored by the Professional Association of Innkeepers International, is aimed at attracting younger travelers who the group feels opt for the convenience of booking through Airbnb.com over staying at traditional inns.

“We are trying to move people past the idea that we only cater to an older crowd,” said Glen Miller, owner of the HH Whitney House on Esplanade Avenue. “We need to stay competitive because other travel options like Craigslist and Airbnb are not going to disappear.”

Innkeepers in New Orleans have struggled for years to get the city to enforce its laws against short-term rentals. The city will investigate properties that have received multiple complaints, City Hall spokesman Ryan Berni said.

Property owners who violate the city ordinance against short-term rentals face a $500 fine or at least 30 days in jail.

Miller said the city does not have a clear definition of what a bed and breakfast is, which makes it difficult to identify operators who are not compliant.

B&Bs are split into three categories for occupancy tax purposes in New Orleans. A B&B with one or two rooms does not have to pay an occupancy tax, while three- to five-room operations are taxed 50 cents per room per night rented. Six- to nine-room B&Bs pay a 13 percent tax on room rates in addition to the 50-cent per night tax.

PIANO is working with the City Planning Department to include all bed and breakfasts under one tax category.