Mountain Travel Symposium: Tense talk about rentals-by-owners
April 12, 2014
Websites like VRBO.com and Airbnb.com are giving discerning travelers an alternative to resort lodging in mountain destinations, but they're also creating some controversy — and even a bit of tension — within the travel resort industry.
That tension was evident at a Saturday afternoon panel discussion at the Mountain Travel Symposium in Breckenridge, a conference that brings everyone from marketers to hospitality professionals together once a year to discuss mountain travel issues and trends. Panelists for the "For Rent By Owner: Tension, Taxes and Technology" session included Breckenridge town manager Tim Gagen, Larry Mashaw of The Resort Company in Steamboat Springs, and Carl Shepherd of the online vacation rental marketplace HomeAway.
Gagen has been facing the challenges of vacation rentals by homeowners for years from a revenue and regulatory standpoint, and not in a good way. In addition to tax collection challenges, the rental-by-owner market can and often does cause disturbances within communities.
Gagen said the town was finding that many out-of-town owners who rented out their properties without a local contact or property manager, issues ranging from trash disposal to parking to rental units becoming party houses arose.
“We’re not saying HomeAway should be collecting (taxes). We said it would be nice to know who their clients are so we can help them comply. That’s all we’re trying to do is level the playing field.”
Breckenridge town manager
The town has had to write regulations around the growing rental-by-owner industry, as well as put a lot of scrutiny on the local homeowners who are renting their homes out without paying the proper taxes.
But Shepherd said the focus shouldn't be on legislating what people can or can't do with their properties, it should be on making it easier for them to comply with regulations.
"The biggest challenge we find when we talk to owners when they're not complying with regulations is because they can't understand them. … All you're doing is encouraging an underground economy," Shepherd said.
Gagen said the laws, at least in Breckenridge, are up front and easy to comply with. The town has information packets and would love to pass them out, but they don't always know where to deliver them.
"We reached out to HomeAway to figure out ways we could partner," Gagen said. "The answer was, 'We can't help you because of the privacy.'"
He was referring to the privacy that companies like HomeAway provide to homeowners. The town of Breckenridge wanted to know who was listing rentals so it could check to see if those owners were complying with tax laws, but Shepherd said personal information provided by its customers is private.
"We're not saying HomeAway should be collecting (taxes). We said it would be nice to know who their clients are so we can help them comply," Gagen said. "That's all we're trying to do is level the playing field."
Instead, town governments have to spend more time looking for homeowners who are bypassing the system. It's something that town governments can choose to go after or not, Mashaw said.
Mashaw, who is in the property management business, also has a dog in the fight against the rental-by-owner market, but it's not as competitive as you might think.
Property managers want to keep vacation rentals at the top-of-mind for potential customers, so they have to be careful not to "bash the owners," he said.
And while Shepherd said the rental-by-owner market is getting more professions, he thinks homeowners who are renting out their properties are still being shunned within their communities.
"Stop seeing owners as an enemy and embrace them," he said. "Invite them into your community, invite them to join your hotel associations."
Mashaw has seen that effort fail in Steamboat Springs, however. Homeowners who have entered into the industry are withdrawn and are often afraid of being called out, he said.
Gagen said that generally speaking the issue has become less of a problem in Breckenridge — that most homeowners are now complying, but the work never ends.
"We have to keep at it," he said.
That's good news for towns who spend their lodging tax dollars on things like destination marketing, or in Steamboat Springs' case, on funding flights into the local airport. But one voice from the audience — Vail Valley Partnership president and chief Executive officer Chris Romer — added slightly more tension to the discussion.
"I find it fascinating that we're here talking about destinations and travel and visitors and increasing visitation to our areas, and you guys have been sitting up there for 30 minutes and no one once has talked about guests, and what's best for guests," Romer said. "No one once has talked about guests and if this model is actually beneficiary to our visitors."
Editorial Projects Manager Lauren Glendenning is covering the Mountain Travel Symposium in Breckenridge for Colorado Mountain News Media. She can be reached at firstname.lastname@example.org or 970-777-3125.