The Hotel Industry is Fighting a Secret War Against Airbnb

Discussion in 'HardForum Tech News' started by cageymaru, Apr 17, 2017.

  1. cageymaru

    cageymaru [H]ard|News

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    The $1.1 trillion hotel industry has been fighting a secret war against Airbnb by using state and local politicians to outlaw it's usage. In NYC for example, new stiffer fines have been enacted to combat Airbnb hosts that break local housing rules. The Federal Trade Commission was called to investigate the service after senators were alerted to the effect that Airbnb has had on housing costs. 150 million travelers have rented out 3 million Airbnb properties since 2008 in 191 countries and the hotel industry is determined to fight back.

    Airbnb now commands a market value of $30 billion. To put this into perspective, Hilton is now worth $19 billion and Marriott is worth $35 billion. Airbnb has made hotels compete on holiday pricing as that is when they typically raise the room price to make maximum profits. To combat this disruption in the the industry, hotels have been going after the Airbnb hosts by accusing them of running hotels in residential areas, not collecting hotel taxes, and avoiding safety rules enacted for the hotel industry. In some areas politicians have even stopped collecting taxes to not legitimize the service.

    I can see both sides of the issue. On one hand if you are effectively renting out your property 365 days a year, then it is a hotel rather than a residence in my opinion. On the other hand, this just seems like the hotel industry is trying to hold onto old business practices like the music industry did when Napster came out. When the hotel industry started lobbying politicians, it really starts to stink of collusion and payoffs. How did they convince politicians to not collect taxes? Even the IRS will collect winning from gambling and illegal activities on your taxes.

    All of that has hurt hotel operators. Airbnb has brought hotel pricing down in many places during holidays, conventions and other big events when room rates should be at their highest and the industry generates a significant portion of its profits, said Vijay Dandapani, chief executive of the Hotel Association of New York City, which works with the American Hotel and Lodging Association.

    The industry’s plan against Airbnb shows “the hotel cartel is intent on short-sheeting the middle class so they can keep price-gouging consumers,” Nick Papas, a spokesman for Airbnb, wrote in an email. “With more than 250 government partnerships over the last year, we have shown our seriousness of purpose when it comes to putting in place fair rules.”
     
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  2. Borgschulze

    Borgschulze 2[H]4U

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    Raising prices during holidays.

    Sounds like they're just flat out ripping people off.

    I drive a tow truck, I don't raise the prices in the winter time, or when it's raining, I make an honest living.
     
  3. c@Nc3r

    c@Nc3r Limp Gawd

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    Just another industry used to gouging customers because they can and then throwing a fit when the party is over rather than adapting. I love how it always goes back to lobbying rather than adapting. Such a crooked world we live in.
     
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  4. Pusher of Buttons

    Pusher of Buttons [H]ard|Gawd

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    Primarily out of necessity...hotels are largely empty during off peak times and make most of their real money geared up for special events and holidays. Just supply and demand there. People need their cars towed year round. With that in mind, hotels frequently operate as an oligopoly during big events....they all promise not to go below a certain amount so that all travelers are equally screwed. AirBnb kind of throws a wrench in this like Uber did with taxi service. Law needs to catch up to the sharing economy, and quickly, or it's going to keep getting raked over the coals.
     
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  5. magoo

    magoo [H]ardForum Junkie

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    Goddamn capitalists..............imagine someone coming up with an idea that works.

    I get that the hotel industry is pissed........Airbnb has "Uberized" finding a room somewhere.......I wonder how traditional BnBs do it.....did they grab the attention of the hotel industry as well?

    Paying off politicians is just business as usual.
     
  6. kledar586

    kledar586 [H]ard|Gawd

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    so just like the taxi industry against Uber or is this different?
     
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  7. nutzo

    nutzo [H]ardness Supreme

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    The problem is that too many people are abusing Airbnb, both the renters and the landlords.

    Most people wouldn't care if their neighbor rented their place out a few days a year, but there are people who have bought houses and rent then out year round on Airbnb.
    While it's legal to rent a home in a residential neighborhood month to month (or on a longer term lease), these weekend or daily rentals are disruptive to the neighborhood and a violation of the local zoning laws.

    The other problem is the renters. People who rent for a weekend, or even a week, tend to be louder and more disruptive.
    Even worse are the people who rent under false pretenses (like holding a loud party, shooting an x rated movie, etc.)
    These all cause major disruption to the neighborhood, and are one of these reasons short term rentals are not permitted in most residential neighborhoods.

    I don't blame the hotel industry for wanting the existing laws enforced.
     
  8. NeoNemesis

    NeoNemesis 2[H]4U

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    I'm not shedding any tears for the hotel industry, but AirBnB is driving up the cost to rent in my city, which is aggravating.

    Also, a large portion of AirBnB users have zero respect for other people living in the building.
     
  9. Ragenrok

    Ragenrok 2[H]4U

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    yup, people want to scream "omg look what the evil corporations are trying to do to poor airbnb" but in all honesty if your renting out houses on a day to day bases 365 days a year that you dont even live in then I don't think its un-fair saying that it needs to be under the same regulations as motels/hotels. If it was just people renting their house out for 2 weeks while they are on vacation or a spare bedroom in their house as an extra source of cash (like a short term roomate) then that should be left alone but if your going to operate like a hotel you should be regulated like a hotel.
     
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  10. Compddd

    Compddd [H]ard|Gawd

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    AirBNB and Uber are not the same.
     
  11. Pusher of Buttons

    Pusher of Buttons [H]ard|Gawd

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    No, but it'd be a good mashup....call when you're drunk at the club and a motorhome pulls up right where you are so you can puke and pass out without having to make it to your hotel.
     
  12. NickJames

    NickJames [H]ardness Supreme

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    Yeap, around here an AirBNB can make a months worth of rent in 2 weeks during peak season and then not have to deal with contracts or renters. Renting is just unaffordable these days, I rather pay a mortgage.
     
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  13. Chupachup

    Chupachup Limp Gawd

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    How is this any different than how timeshares work? I have friends "invested" in timeshares in Florida and more than half the time they'd be able to stay there, they end up letting friends and family cover the costs of the period as they stay instead.
     
  14. modi123

    modi123 [H]ardness Supreme

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    Chupachup - Some folks enjoy amenities like front desk/concierge folk, house keeping, being on a resort, etc. Average Airbnb joint doesn't have that.
     
  15. Gweenz

    Gweenz [H]ard|Gawd

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    Yeah and I think that's why ultimately AirBNB will never eliminate the hotel industry like Uber could eliminate traditional taxis, just take a significant bite of their profits.
     
  16. nutzo

    nutzo [H]ardness Supreme

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    Because the building/area is zoned for time shares instead of being zoned for single family homes?
     
  17. DarthBeavis

    DarthBeavis 2[H]4U

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    Writing this from an amazing AIRBNB in Miami. Also took a Lyft today. F hotels and taxi cartels. Long live the sharing economy!
     
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  18. bos

    bos Limp Gawd

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    If you think airbnb or uber etc are good, you're sadly mistakenly. The inherent problem is it will create a situation where you HAVE to use it to afford a vehicle or buy a home, as the prices will rise based on people who want to get around business ordinances and taxes and snatch up property as investments even more than they do current day. And increase unemployment rates, concentrate wealth, and eventually mass social unrest, which is terrible for business.
     
  19. Quartz-1

    Quartz-1 [H]ardness Supreme

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    Insurance, not hotels, is likely to be the downfall of AirBnB. In two respects: firstly, an AirBnB guest claiming for an injury and the insurer responding to the host, "Sorry, you're not insured for that." and secondly, a major accident like the house burning down or theft (perhaps your PC) and again the insurer denying coverage.
     
  20. Dekoth-E-

    Dekoth-E- [H]ardness Supreme

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    I mean here is my choice;

    1) Air BNB - Pay $60-$80/night for a house that has a full bedroom, bathroom and kitchen where I can cook my own meals and not deal with people on any level.

    2) Hotel - Pay $130-$170/night for a suite similar to the above.

    I mean it really isn't a contest when I'm on the road for a week. Don't get me wrong, I'll pretty gladly stay in a Homewood or Staybridge as I'm still really high in points and benefits with both brands. However if I can find an Air BNB for half the cost and all I really lose is the free food which isn't that good. I'll take it.
     
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  21. modi123

    modi123 [H]ardness Supreme

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    I would figure if you are making a business renting out your home then you'll need bigger rental/small business insurance and not homeowners.
     
  22. EODetroit

    EODetroit [H]ard|Gawd

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    Same thing big oil is trying to do to Tesla.
     
  23. kydsid

    kydsid [H]ardness Supreme

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    Undercutting prices because you aren't complying with the same regulatory, insurance and safety requirements is exactly how Uber, Lyft, Airbnb and anything else in the sharing economy make their money. This should be obvious to anyone. Sadly most don't get this or understand the origins or most of the costs to the legacy providers.
     
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  24. Bootleg Usher

    Bootleg Usher Gawd

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    Just to build on the above post, in Alberta all hotels pay into a "Tourism Levy". AirBnB does not, so I would feel chapped if I was a hotel owner and the house next to my property was advertised 365 days a year.
     
  25. Tengis

    Tengis [H]ardness Supreme

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    There are so many business models out there that are just plain bullshit when it comes to the consumer saving money. Taxis and hotels are just two of them IMO.

    Imagine if you could buy a car directly from your preferred manufacturer instead of paying for the overhead of a dealership. You could save THOUSANDS even on a cheap car. Not only that, but the manufacturers would potentially make more money.

    The same goes for home building - the housing industry is a fucking SCAM. There is INSANE markup on so many things just because people don't know any better. When you pay them that $400 to stain the damn hand rail going up the stairs all they do is turn around and pay someone else $80 to do it. Everything with home building is like this. When my Dad had a home built years ago he saved over $40,000 by not having them do simple things like paint the inside walls, install carpet, etc. He paid people to do each of these things and saved over FORTY THOUSAND DOLLARS. Not only did he save, but he bought much better carpet and used expensive tile instead of garbage linoleum.

    Anyway, all I am saying is that going forward, I believe there are many industries that are going to be severely threatened as entrepreneurs find a better way to get things done. As the biggest example, look at department stores like Macys, Sears, etc being destroyed by ecommerce. At one point they were retail powerhouses and now they are all damn near going out of business.
     
  26. daglesj

    daglesj [H]ardness Supreme

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    Not to mention these corporations will push for further deregulation and loosen of current laws which will allow them to disrupt and crucify. I strongly believe these companies are a shoe-in for a darker agenda of exploitation.

    Like you say, get rid of the taxis and when Uber is the only one left standing with zero regulations applying to it (as it states its not a taxi firm or an employer) you'll be paying $20 a mile to get anywhere.
     
  27. Dekoth-E-

    Dekoth-E- [H]ardness Supreme

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    Air BNB doesn't set the prices, the ones renting do. Also there isn't nearly as much "Cost" to the legacy providers as they would lead you to believe as far as how it affects their rates. I'll use Homewood suites as an example as I regularly frequent them. Using the one near me that I stayed in quite a bit when I was moving up here, their regular rate is $139/night. You can deduct $3/night and make it $136 a night if you are a hilton honors member. However my corporate rate if I book it through the corporate website drops to $75/night. Now you know they aren't losing money on the corporate rate and they are still profitable. So why then is the individual rate nearly double? Because the brand can charge that and get away with it not because of cost. A comparable Air BNB in this area gives me a room at around $80/night. Now the Air BNB doesn't include the breakfast or dinners or other amenities that the homewood does. So really if you look at their corporate rate compared to Air then they are more than capable of being competitive. However like other legacy industries why be competitive when you can just lobby and sue the competition out of business?
     
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  28. Exavior

    Exavior [H]ardForum Junkie

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    Then buddy you are not like any other tow truck driver I know of. Most of the ones I know that higher rates for being towed out of a ditch due to sliding off due to icy / snow covered roads. They view it as more work is required to pull you out during these conditions and they are at more risk being on the road themselves so towing is more. Especially when roads are supposed to be closed or you are asked to at the very least stay off of them unless you need to be out. Since you decided to go out on the roads and ended up in a ditch you might end up with a ticket plus double or triple the tow charge of normal.

    Like somebody else pointed out those buildings are zoned for that type of thing. Your house isn't. A few years ago a woman got busted for running a day care out of the back of a business that in front fixed computers and sold guns, bows, knives, swords. They had about 15 kids in a small 20 x 20 room in the back. They were shut down for running a day care in that building. There are certain guidelines for a building being licensed to be a daycare. The same goes with something that is being rented out and having people live in it. Just like normally you can't decide that you want to rent out your crawlspace to let somebody live in there, or you can't rent out a random part of your house without having it approved first. The thing about airBnB was that it was getting around these local rules or just ignoring them as it was slightly different. You weren't "renting" out your house, you were allowing somebody to stay there for a few days while you were out of town. Something that isn't that new of a concept. The issue becomes when you start using this as a way to get around calling your building a rental location by renting it out over X% of the time. At this point you are getting around all the laws and regulations any other legal establishment would have to follow to do what you are doing.
     
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  29. thesmokingman

    thesmokingman [H]ardness Supreme

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    I've come across this every now and then and it is fucked up. When corporations use their power to fuck with citizens and their freedoms, it is so wrong.
     
  30. kydsid

    kydsid [H]ardness Supreme

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    Ya like when Uber waged a multi million dollar campaign in Austin to try and be exempt from having comprehensive background checks on drivers because it was more expensive than the felony only checks they wanted to do.

    This is company A versus B. This has nothing to do with our freedom. Only with the freedom for one company to make more money than another.
     
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  31. hardboner

    hardboner Limp Gawd

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    why are hotels worried?
    it's not like you can find unlimited airbnbs when there's an event. Hotels still offer convenience when you need it.
     
  32. rudy

    rudy [H]ardForum Junkie

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    You know what I find funny / ironic, if you think hard about the long term of these business models you could easily see how one day the situation will EXACTLY reverse. What I mean is that right now hotels build large establishments to host a hundred or so rooms. But most of the time they cannot fill them all so they over charge guests on those days unless the guest uses price line or a corporate discount. But then when a major event or holiday happens they fill up and way over charge and make tons of money. Good for them!. AirBnB on the other hand just has a bunch of random people doing random things but there is an argument they are undercutting the normal day rates. Ok fine. If everything progresses eventually hotels will need to downsize so they can just handle the daily guests as they cannot make the big bucks on holidays anymore. And at the same time many AirBnB will likely see laws go into effect that prohibit people from renting more than X nights per year. So now when a large event happens that is rare people on AirBnB pick up the excess capacity the hotels gave up on and over charge for it!

    Also here is an even more ironic thing, government taxes and laws only work if they are enforceable, what few seem to realize is that airbnb actually provides an enforceable channel for government to tax local people renting out their homes. Prior to the sharing economy they didn't have any such means and the even if they did the few people that were getting around rental laws weren't enough to peruse. Now they can just roll in with an audit or warrant and demand Airbnb reveal all the people who have rented in a town.


    This isn't true, renting is almost always more expensive than a mortgage and always has been. The reason is simple some company, or person has to take out a loan AKA mortgage to build or buy the property you rent, and guess who pays that loan? You the renter does. The only reason people perceive renting as cheaper is because most people are not comparing apples to apples they are comparing oranges to apples. Seen it a millions times. Well buying a home I want with 3 bedrooms and a basement and a yard and a covered bridge will cost me $2000 / month, but I can rent for $1650, problem is the $1650 apartment is a 2 bedroom white walls formica countertop piece of junk. You could purchase a similarly small home for $1400 / month mortgage.

    Sorry this just isn't going to happen, if enough people demand rental in an area more homes will be built basic capitalism.

    This is true and sooner or later just like with sales tax, something is going to be done about it. As I mentioned above they are actually creating the easiest vector for lawmakers to tackle this, but the hotel industry is too near sighted to just push politicians to levy taxes on AirBnB / Uber.

    Well actually this is the one thing they should be worried about during an event it is entirely possible that unlimited AirBnBs would be available. In fact I think this is actually one of the best things about AirBnB imagine a city lets take Holland MI which has the Tulip festival which is the only large event that seems to happen there. Hotel prices skyrocket and they completely sell out forcing people to goto hotels in cities up to 1 hour away and drive in. I could imagine a large number of home owners only opening their house for that week, renting once and not doing it again, some might even leave the home so they don't have to deal with the crowds. Or imagine if a city gets a huge event like the world cup or olymic games, imagine a time when we don't have to throw up cheap fast multimillion dollar hotels just for this once in a lifetime even, and the homeowners in the city just make a bunch of extra cash renting out spare rooms.
     
    Last edited: Apr 17, 2017
  33. rudy

    rudy [H]ardForum Junkie

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    BTW I went to a poster session at a university and there was a guy who did a survey on AirBnB users to learn what was driving them to choose that over hotels. Now costs was one of the big factors I think it was the highest one, but just under that was another factor no one mentions. A lot of people were actually looking for 2 major things from an AirBnB hosts, 1 a local experience tha wasn't fake, and 2 they were looking for real advice about where to go and what to see in the area that wasn't just the brochures that a minimum wage hotel employee can hand you or the kick back based advice. To me this suggested that AirBnB hosts are actually being better hosts than hotel attendants.
     
  34. nilepez

    nilepez [H]ardForum Junkie

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    To me it probably comes down to 1 thing: does renter actually live in the place they're renting? I rented a place in NYC 2 years ago, and it was obvious that the only people who stayed in this apartment were those who rented it via Airbnb. AFAIK, this is no longer legal in NYC.

    That said, I don't really care who wins this fight. Airbnb is nice, but in most cases, i can find a decent hotel on hotwire for the same or less.
     
  35. The other Paul in a GTR

    The other Paul in a GTR n00b

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    I actually rent one floor of my townhome with it's bedroom and full bathroom on Airbnb. However, I am also living in the home at the same time as doing this. I'm not running a hotel, I'm just making use of a guest bedroom more than just once a year for in-laws. Because this isn't my sole income, and is just nice extra spending money, I can severely undercut a hotel. I can see the hotel getting mad at me charging 1/2 of the local rate, but whatever. It's definitely going to be awesome having half my mortgage payment covered by my spare bedroom that would otherwise sit empty ~350 days a year.
     
  36. Exavior

    Exavior [H]ardForum Junkie

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    They are "worried" because somebody is undercutting them without having to follow all the same rules. This is similar in many ways to telephone and internet service. Your local telephone company has to follow certain regulations, they have to charge certain rates, have to collect certain taxes.... All of that is setup by the government. Then you have somebody like Comcast that doesn't have to follow the rules so they can come in and charge whatever they want, have whatever quality of service they want and get away with it. You then have people bitching about the cost of say Frontier or Century Link's phone and internet service compared to Comcast but it is the regulations that cause this price difference. The same here, hotels / motels have to charge you certain taxes, they have to cover the cost of various regulations to make sure they are following all laws. Then you have somebody coming through using a loop hole to basically run motel / hotel service but without following any required laws or regulations and can get away with it.

    This is on par when magic jack first hit the market. Low cost phone service. However they were low cost because they refused to actually do anything that a telephone company is supposed to by claiming they weren't a telephone company. Collect and pay 911 fees? No they don't need to do that because they don't see themselves as a telephone company. Pay other carriers for long distance calls? They don't need to do that as they aren't a telephone company...

    If AirBnB was just another lodging method nobody would care, however the issue that the lodging industry has is that they are losing money to somebody that isn't being forced to play by the same rules.


    Which is part of their argument a number of people on AirBnB are not following local laws in how they are renting out their places.

    Which begs the question is that legal for you to do that in your area? Are you licensed to treat part of your house as a rental property? Do your file your taxes claiming that you own rental property? Do you pay the proper local taxes for your rental?
     
  37. swimming pool

    swimming pool Limp Gawd

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    The local rules vary to such a huge extent that the questions are all but meaningless.

    What is proper in Hasselt Belgium or Albuquerque New Mexico will be far different than another place.

    My state essentially requires that a property of 4 units or less be habitable and that a few basic tenant landlord agreements are in place. Taxation varies depending on an entirely separate set of factors. There is zero regulatory barrier to renting my house out next weekend, whether it be through Craigslist or Airbnb.

    There are a different set of rules for my house and a Hampton Inn because there are fundamental differences. There welcome to try and change them, I guess. Doesn't seem like the best use of resources though.
     
    Last edited: Apr 18, 2017
  38. 5150Joker

    5150Joker 2[H]4U

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    The problem with airbnb is hosts aren't regulated so I can see why the hotel industry wouldn't be happy. If airbnb hosts pay taxes and agree to hotel style regulations and inspections then that's entirely different.
     
  39. Borgschulze

    Borgschulze 2[H]4U

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    We are significantly less busy in the summer than in the winter.

    I will have days where I have only 1 call in the summer, even a few without any.

    But sure, keep standing up for those greedy hotels.
     
  40. Pusher of Buttons

    Pusher of Buttons [H]ard|Gawd

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    I meant no disrespect, I come from the land of people towing anyone from a private lot if they leave a car parked there for more than 5 minutes so our local tow truck guys are pretty much a year round cash cow.