Should Vail regulate online lodging rentals?
Ryan Summerlin August 8, 2014
A quick look at www.vrbo.com lists hundreds of units in the town of Vail. Here’s a comparison of rates for Aug. 15 and 16 for a one-bedroom condo in East Vail with a comparable unit in the same complex:
Lodge rate: $150 per night.
VRBO rate: $135 per night.
VAIL — People in Vail’s lodging business are hard to get into one place. But those managers agree that something needs to be done about online rentals of condos and homes. People outside the industry, though, have a different view.
More than 20 of the general managers of condo and hotel properties recently asked the Vail Town Council to look into regulating rentals through websites including Vacation Rentals by Owner and Airbnb. The managers drafted a proposed ordinance for that purpose and presented it, and their case, at a recent council work session.
The group has a member and ally in Vail Town Council member Dale Bugby, owner of Vail Resort Rentals. Bugby believes the town is losing money, and the resort may be losing some of its cachet.
In Bugby’s view, many condo owners are using the online sites to rent “sub-standard” units. He also worries that those renting units at a discount are harming the complexes, since the discounted prices usually don’t include payments for pools, front desks and other amenities.
“Some of these people have decided they wanted to avoid taxes and fees,” Bugby said.
Then there’s the matter of missing lodging taxes, a big part of the town’s revenue picture. While town officials say they diligently look for, and contact, individual owners about paying lodging taxes, Bugby believes the town needs to require people renting individual units to obtain business licenses and get on the town’s tax rolls.
The lodging managers’ proposed regulations also introduced things such as providing proof of insurance and participation in the valley’s Lodging Quality Assurance program.
Bugby is a believer in much of what was proposed. But another Vail lodging manager isn’t sure that much regulation is required.
Contacted a few days after the meeting, Farrow Hitt, general manager of the Simba Run condominiums, said the best course of action may be simply requiring property owners to get business licenses and pay sales taxes.
Hitt was the main presenter at the recent council meeting and said he was surprised at the reaction he received from council members, particularly Margaret Rogers.
DEMOGRAPHIC OF TRAVELERS
Rogers, who said she sometimes uses online services to rent space in private homes when she travels, said services such as Airbnb and Flipkey are becoming ever-more popular with younger travelers. The danger of too much regulation of those services and property owners presents a threat that people will travel to places where lodging is easier to find, and less expensive.
“Every visitor to Vail is going to be bringing more money to the town of Vail — we don’t want to discourage that,” she said.
Rogers added that people who use those sites usually aren’t expecting the same experience as those booking rooms at the town’s hotels. And, she said, owners whose units aren’t up to snuff are quickly singled out in user reviews, meaning their future rentals are likely to suffer.
The other question is which of these property owners is really operating a business. In Bugby’s view, anyone who pays money to list a unit on a site should be required to get a business license. Hitt, though, said someone who rents out his or her condo for the 2015 FIS Alpine World Ski Championships to pay for a tropical vacation those weeks probably isn’t involved in a business. Random weekends may not qualify either, he said.
But where is that line? And what should be required of people on the business-owner side of it?
Vail resident Andy Ball was at the work session and later sent an email to town officials complaining that lodging managers were trying to intrude on both new and long-standing practices.
“This community has a decades-long history of renting homes during the last two weeks of the year, World Cups and other large events,” Ball wrote. “Why is it a problem now?”
The response from the lodging managers is that online rentals make up an increasing percentage of the town’s bookings. The VRBO website on Friday listed 430 available properties for the weekend of Aug. 15 through 17. That’s just one site, and just for Vail.
Hitt told council members that the total of online bookings is at least 10 percent, and probably more.
So what will the town do?
Rogers and other council members didn’t seem to have an appetite for much, if any, regulation of the business, although there was sentiment to learn more about it, and what the town can and should do.
“We do need some regulation,” council member Greg Moffet said. “It’s not fair that someone in one of (the managers’) buildings can self-rent without paying taxes.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org or @scottnmiller.