Airbnb has a large market in East Lansing
During football season, Wild Goose Inn, a bed and breakfast located close to MSU's campus, faces its busiest time of year. With rooms that are booked up to a year in advance and full every weekend, it is one of the closest lodging services located within walking distance to MSU.
Other lodging options include chain hotels like Hampton and Holiday Inn, or Airbnb: an online hospitality service that enables people to host and rent short-term lodging within personal living spaces like homes, apartments or condos.
Hospitality journalist Ed Watkins, who has been writing about Airbnb ever since it became a point of discussion in the hotel business around three years ago, says that college towns have been seeing a growth in Airbnb listings and according to Airbnb Midwest spokesperson Ben Breit, the service delivered nearly $1 million in revenue to Michigan during its first three months of being in a tax agreement with the state.
"A, it’s hard to get in a hotel on a football Saturday," Watkins said. "And B, a lot of people prefer an Airbnb because you can get two or three bedrooms ... it’s more like a house than it is just a hotel room. But I think it’s mostly just another set of competition for hotels."
Paul Martin, the manager of Wild Goose Inn, claims that the growing popularity of Airbnb has not affected the establishment. Consisting of only six rooms, fireplaces and a more personalized experience, the inn is unique from chain hotels like Hampton and Holiday Inn and therefore more similar to the "homey" aspect of Airbnb, which Martin prefers.
“I like Airbnbs better than hotels mainly because you do get either an entire condo or house or whatever you’re renting at the time," Martin said. "Being an inn manager, I like more personal places to stay rather than a chain hotel.”
Although this aspect as well as a less expensive stay draws people to the service, safety concerns are beginning to surface around the company. In the past, Airbnb was criticized for discrimination issues as well as an instance from last month where three men were charged with murder after the death of a man who booked a room through Airbnb in their home in Australia.
“One of the complaints that hotel owners have is that an Airbnb doesn't have to live up to the same kinds of codes and standards and laws that hotels do with regards to safety, security, discrimination laws, things like that, that all add cost to the hotel owner," Watkins said. "But an Airbnb host and certainly Airbnb as a platform doesn’t have those same kinds of costs, so it’s unequal.”
Economic concerns are surfacing as well. In some cases, Airbnb doesn’t pay occupancy taxes like hotel operators have to pay. According to former East Lansing Director of Planning James Van Ravensway, the city has certain areas within the residential neighborhoods that don’t allow rentals at all. And there are rising concerns about whether those spaces outside of the designated rental zones are being utilized for this kind of commercial use.
“If someone is doing an Airbnb out there, I’m sure that’s an issue," Van Ravensway said. “But statewide and nationally, as people start doing these Airbnb’s on a regular basis, it starts changing the behavior of that property from just a residential property rental to a hotel. And that brings in a whole different set of questions.”
Airbnb is especially popular in East Lansing due to its low amount of hotel options available in comparison to other major college town cities, Watkins said. On the Airbnb site, an extensive number of listings in East Lansing advertise their proximity to Spartan Stadium and the campus in general.
"When someone comes to an Ohio State football game, there’s a lot more hotel options and in East Lansing there’s a lot fewer, but still there’s 100,000 people coming to the game, many of them from out of town needing a place to stay," Watkins said. "So it’s probably a bigger thing here in a town like East Lansing than it is in Columbus or Ann Arbor, to an extent.”
In the Hospitality Business Real Estate Investment and Development course that is co-taught by Van Ravensway and Hospitality Professor Arjun Singh, where Watkins gave a presentation about Airbnb and it's impact on the hotel industry, they discuss the effects of business disruptions. In retail, Amazon was a disruptor. And in the hospitality industry, Airbnb is one.
Though some in the hospitality industry, like Martin, prefer Airbnb and its qualities, Watkins believes there are two sides to it.
"There’s a good side to it where it serves a need for both guests and hosts that is wholesome, good and in the American spirit and entrepreneurial," Watkins. "But it can be bad when it does unfairly compete with hotels. Or when it turns into something that’s a big commercial enterprise that doesn’t have to go by the same rules that other enterprises have to.”