Airbnb fills the hotel void in Worcester
Hotels such as Worcester's Beechwood offer familiarity, amenities, and one-stop convenience for convention-goers and others, helping them compete with newer lodging services such as Airbnb, through which travelers can book short-term stays in homes or apartments over the Internet.
Airbnb locations are spread throughout Worcester and contrasted by the city's hotel locations that are more centrally located.
Open a map of Worcester on Airbnb, and a peppering of locations pops up throughout the city with a vast price range and style. Want a small room in an apartment in Main South? Dig $30 out of your pocket. Want a little more comfort and space for your stay? An entire condominium near UMass Memorial Medical Center will set you back $69 a night.
These options are in addition to, and in competition with, the city’s five hotels with their 745 rooms, a number far below that of other cities of a comparable size.
This has pushed business clients to towns surrounding Worcester during major events at the DCU Center that overload local hotels, according to DCU Center General Manager Sandy Dunn. As Airbnb and similar services expand their reach into the business community, these alternative locations pose competition for hotels and options for business travelers that didn’t exist five years ago.
The Internet-based Airbnb allows people to rent out rooms, apartments or whole homes. While timeshares have done this for years in vacation destinations, Airbnb is credited with bringing the model to cities and allowing private rentals to compete against hotels in an urban environment. The slick Internet interface also puts people on both sides of the equation a few minutes and a new password away from making use of the service. While Airbnb’s listings have grown to more than 1 million rooms, with the company recording a 107-percent inbound guest growth in the past year in Massachusetts, there is a new push to entice business clientele.
A new survey of nearly 400 U.S.-based travel agents and bookers shows that renting these rooms is growing among business clients. The 2015 Fall Business Travel Trends survey found that 44.4 percent had clients who have used an alternative supplier for accommodation such as Airbnb.
“Already, we are seeing a segment of our clientele opting for the flexibility that those services can provide. It will be incumbent upon travel management companies to help their clients incorporate those services into their corporate travel policies for financial reasons and for duty of care,” David Holyoke, president of Travel Leaders Corporate, said when the data was released.
And while institutions might not yet have put in regulations guiding the use of these services, neither do many outright ban them. At Clark University, which has its admissions staff travel widely for recruiting purposes, employees are permitted to expense Airbnb services as long as it is for a valid business reason.
Jockeying for position in the city
Dunn questions the viability of Airbnb in Worcester for business clients. While she says it might be attractive for those coming to the DCU Center for gymnastics competitions, hockey tournaments and other family-oriented events, when it comes to business events a great deal of the interactions at a multiday conference take place in the hotel lobby or conference rooms.
“My belief is that it will not be a model for business conventions. Half of it is the hotel lobby. Half of it is the networking,” Dunn said. “I think it’s totally apples and oranges.”
While she admits there has been an ongoing lack of hotel rooms, much of that will be resolved by 2017 with the addition of three new hotels in Worcester adding approximately 360 rooms.
Also, many businesses attempt to have all their employees stay at the same hotel, which is not an option with models like Airbnb.
That is not to say people in Worcester aren’t concerned about the impact of Airbnb on the Worcester hotel market. Even the Beechwood Hotel — Worcester’s only AAA four diamond hotel — is wary of the competition presented by Airbnb. While a hotel and apartment rentals are a very different experience, they are still competition, Megan Nickerson, the hotel’s sales coordinator, said.
But she still believes that business travelers specifically are looking for ease and convenience while traveling. In addition to a room, guests get dining options, a business center and fitness center.
“Here at the Beechwood we are an all-inclusive property. We are a one-stop shop,” Nickerson said explaining that companies and business travelers look for this ease when booking meeting space and rooms. “When you’re traveling for business you are there for a specific reason ... you are crunched for time and in back-to-back meetings. It is just more convenient to stay at the hotel.”
But Airbnb is not necessarily targeting those customers, instead focusing on the individual business traveler, particularly those who are seeking to combine their trip with personal leisure. This fits well with Airbnb’s more homey feel in its offerings, according to the company.
TripAdvisor Vacation Rentals’ spokesperson Laurel Greatrix said that the supply-and-demand economics of the hotel industry means that availability of rooms can be low, while prices are high in some locations. In these cases, more affordable vacation rental becomes attractive, she said.
“Vacation rentals can work particularly well for business travelers who are on an extended trip. Many rentals, even smaller, one-bed properties will have a kitchen, a separate living space and laundry facilities — all the things you need to feel ‘at home’ while you’re away,” she said.
Concerns and controversy
At its core, the major concerns surrounding Airbnb and similar services revolve around consistency, safety, liability and regulation.
Legal liability and obligation is a hazy area when it comes to these rentals, said Attorney Dennis Gorman, an officer for Fletcher Tilton PC of Worcester. Not only is there the question of local zoning regulations, but rental agreements and neighborhood association rules may come into play for those renting out their homes or apartments. For both the visitor and the host, there is the question of liability and safety. This is not like a hotel with the backing of a large company and associated insurance.
“When you’re dealing with leased and rented property a lot of people don’t think they have to have insurance,” Gorman said. “But if you don’t have insurance, it’s on your dime.”
With a hotel, there is also an entire entity and host of regulations surrounding the business. Paul Sacco, the president and CEO of the Massachusetts Lodging Association, is pushing for regulation and taxation of short-term rentals. He wants to see regulations for taxation, fire safety and health passed for these establishments.
“(Short-term rentals) aren’t regulated in any way,” he said, explaining that he has met with Airbnb representatives. “I tell them you need to be regulated and you need to collect taxes because in effect you really are a lodging establishment.”
While these apartments and homes do not have to meet any particular safety requirements, they also are not subjected to the same taxes as hotels. Such taxes are what help fund tourism efforts, he said, and are something that should be applied to these accommodations.
A bill — an act regulating short-term residential rentals — currently being discussed at the state level, aims to regulate short-term residential rentals and to tax them in the same way as hotels, according to Boston House Democrat Aaron Michlewitz who is a co-sponsor on the bill.
Max Pomeranc, Airbnb’s New England head of public policy, has argued against the bill, saying it would stifle the growing economy created by Airbnb. A statewide law for short-term rentals is not appropriate for an area with such varying economies and rental types, he said in a letter to the joint committee on revenue that is reviewing the bill.
Despite debates about rules, Airbnb and similar offerings will continue to round out the hotel economy in Worcester and elsewhere. However, the nature of large convention stays will likely limit their impact on business convention hotel room bookings.
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