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Thu August 7, 2014
B&B Vs. Airbnb: Competition And Common Ground Between Traditional Inns And The New Sharing Economy
The New Orleans City Council voted in July to rewrite the law regarding short-term rentals. But a lot remains to be decided about what that law should look like.
One of the biggest arguments against unlicensed vacation rentals typified by Airbnb is that they pose an unfair advantage because they’re not subject to the same permitting and taxation requirements as traditional bed and breakfasts.
But what are the differences really between running a B&B and an Airbnb? What are the regulations that unlicensed rental operators are accused of skirting? Which is harder to run? Here’s a look at two businesses: one traditional bed and breakfast and one unlicensed short-term rental. They’re just a few houses away from each other on Esplanade Avenue, and they’re not as different as you might think.
Glen Miller and his business partner Randall Saison bought their 19th Century home on Esplanade Avenue in 1998. At first, Glen and Randall were thinking about running a bed and breakfast as a side project, to supplement their income. But Glen lost his job soon after they were up and running, and for the past 17 years, he’s been the full-time innkeeper at the H and H Whitney House.
Just a few blocks down the road, Ken Vogt and his wife April have been renting out the old servant’s quarters behind their house. They started in February of this year, and have been doing it through Airbnb.
Ken and April are landlords for several apartments around the city. When they decided to renovate the servant’s quarters, it looked like the renovation was going to cost a lot more than they had expected. So, instead of renting it as a regular apartment to a long-term tenant, they fixed it up with Airbnb guests in mind. This meant they could make a lot more from the rent — but it also meant a lot more day-to-day work: Ken cleans the unit every time guests leave, which takes about two hours. At this point, he says they have guests booked in the unit every night.
But the couple says it’s worth it. They make about three times as much money from their Airbnb unit than they would from monthly rent. April is expecting a baby, and with the extra income from Airbnb she hopes she won’t have to return to work. Plus, Ken Vogt says it’s fun. He says their favorite thing about Airbnb is meeting all the different types of people that come through.
“The people that stand out to me the most were actually our first round of guests that we had,” he says. “And it was like a week or two before Mardi Gras, which is a really cool time of year. And we all went on a second line together, we had an Endymion party that they came to. We ended up randomly running into them at Buffa’s one night, so we ended up hanging out a lot.”
A lot of people argue that this type of experience is unique to Airbnb, an online community that’s considered part of the so-called sharing economy. The thinking goes that, by signing up for Airbnb, hosts and guests are like-minded and their connection is special. But that relationship with guests is what motivates traditional B&B operators, too.
Glen’s guest on the day we visited was named Pascale. She is from Switzerland, and says she and her friend Max came to New Orleans just to get a sense of the city. They found The Whitney House online.
“You don’t feel like you’re in a hotel, it’s really friendly and calm and you meet the other people,” she says. “Yeah, it’s really cool”
When it comes to applying for a bed and breakfast permit, there are a lot of codes and restrictions. One of the major requirements is that owners must live on the premises. Glen has a little room just off the dining room.
“I have a little bed and office space,” he says. “Usually innkeepers have the very smallest, the very messiest space.”
Down the street, Kenneth and April live on the same property as their Airbnb, and Ken thinks that should be required. The couple even tried to get a regular B&B license, but because the servant’s quarters that they rent are detached from the rest of their house, it technically counts as a “secondary dwelling.” In New Orleans, you can’t get a B&B permit for a secondary dwelling, so they were denied.
Glen from the Whitney House says a lot of the requirements traditional B&Bs are required to follow don’t make sense. He understands why people would go the unlicensed route. He says the laws need fixing.
“We should all be pursuing the legal route, and granted City Hall does not make it easy,” he says. “We’ve been trying to get the city to streamline the process to make it easier. “
If you go strictly by the numbers, Ken’s Airbnb is in direct competition with the nearby Whitney House. Ken charges $85 a night for a single unit that sleeps four people. Rooms at the Whitney house start at $125. Glen is not opposed to the competition. He just wants an even playing field.
“A lot of people — especially the people on the other side, the people who are operating these properties — think that these innkeepers want to stamp them out and curb their business, but that’s the furthest thing from the truth. We’ve been pushing all along to have these properties licensed and regulated.”
So, in the mighty battle of B&B versus Airbnb, both sides seem to want the same thing: clear rules. May the best inn win.
This story has been revised to reflect the following correction:
The building housing H and H Whitney House was built in the 19th Century, not the 17th.