I recently attended a seminar hosted by the Canadian Condominium Institute called “Is Airbnb In Condos Really An Issue?” a hot topic focused on the Shared Economy phenomenon, and more specifically, short-term rentals.
Until recently, there were people and there were businesses. Today, companies empower people with the opportunity to be businesses. The Shared Economy is rooted in a peer-to-peer platform, or simply, an easy way to do business with each other online.
As a result, companies like Uber have completely ‘disrupted’ the taxi industry without owning a vehicle. Airbnb is the undisputed champion in short-term rental services that is completely ‘disrupting’ the hospitality industry. In fact, Airbnb boasts the title as the world’s largest hotelier, and the company doesn’t own a single property.
Now Airbnb and others like VRBO, HomeAway and even Craigslist are seriously having an impact on the condominium sector. Condo owners can reap the financial benefits of renting their units for short spans of time, usually at a much better rate than most hotels.
So what’s the problem?
Anytime there is rapid progress in an established industry, there is panic about how to manage or regulate the changes, and like most controversial issues, there are two sides to the story. On the positive side, many condo owners and boards believe the popularity of a Shared Economy proves there is an opportunity to prosper, grow and redefine the norm. On the negative side, many condo owners and boards believe without regulation, short-term rentals can quickly escalate into long-term problems including safety, security and liability issues that could cost millions of dollars.
Rajive Mehrotra owns several dozen of condos and runs a private executive-suite operation where he can maintain quality and standards, much like a hotel operator. His company acts like an overseer and signs short-term leases with each client, ensuring the condo property is respected. For example, he hires to cleaners who are not permitted to use condo visitor parking.
Brian Buchan, a former board director at an upscale condo in downtown Toronto, made some interesting points as he recounted the story of how he was literally ousted from his position on the condo board thanks to the lobbying of various condo owners intent on renting out their units via services like Airbnb. He made the point that it was in these owners’ interests to actually drive property values down in order to buy even more.
Due to his experience, I fully expected Buchan to be 100% opposed to any type of short-term rentals, but when I asked him if he could see a happy medium, he surprised me by saying yes, claiming that communication and cost sharing might indeed make it possible after all.
Jason Rivait, an associate at Lash Condo Law, answered lots of questions posed by the audience. Some of his advice was for condo boards to first of all decide what type of building they are – either willing to allow Airbnb or not – and then based on that decision, move forward to determine the rules and regulations that will set the parameters. Communicating those rules is key.
Whether your board decides to allow short-term rentals or not, the rules need to be crystal clear for all stakeholders. Send emails, post notices, and don’t forget that in this rare case, your target audience is actually partially transient – you want to reach the guests themselves, whether it be to remind them that they are breaking the rules and could be denied access or that on the other hand they are quite welcome but are required to be mindful of the rules.
Since this particular target audience is most likely to visit the concierge desk and/or pass through the lobby throughout their stay, be sure to set your campaign sights on that venue!
If you need a hand, DigiNotice has come up with a great Short-Term Rental Communication Solution to help you Airbnb or not Airbnb, no matter how your board decides to answer the question!