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Home-share guests in state rising, report from Airbnb shows

by Nathan Owens | January 11, 2019 at 4:30 a.m.

More Arkansas travelers are turning to home-sharing site Airbnb for lake getaways, cabin retreats or short stays in Hot Springs.

California-based Airbnb said in a report released today that its hosts in Arkansas were paid a combined $17.4 million last year and welcomed approximately 167,900 guests. Results more than doubled from 2017. Fayetteville profited the most in 2017 from Airbnb, compared with other cities.

Results from 2018 show a slight shift. Most travelers used the home-sharing service to stay in Garland County, home to Hot Springs. A reported 33,500 guests used Airbnb to stay in the county, drawing $3.4 million in host income.

Steve Arrison, chief executive officer of the Advertising and Promotion Commission in Hot Springs, said he wasn't shocked by the results, given the area's tourist attractions.

"It's the time we live in now," Arrison said. "We've been the No. 1 tourism destination in Arkansas and the Airbnb numbers reflect that. I think if we had the [Vacation Rentals by Owners] numbers it would show that, too."

Benton County was a close second, drawing $3.35 million in host income, followed by Washington County ($2.9 million), Pulaski County ($1.7 million) and Carroll County ($1.56 million).

Part of the growth came from more people leasing their properties online. More than 2,300 hosts shared their homes in Arkansas through Airbnb last year, up from approximately 1,600 hosts in 2017. The company said each host earned an average of $5,300 in supplemental income. This is 15 percent more than a reported $4,600 the year before.

Airbnb, founded in 2008, offers more than 5 million destinations in more than 81,000 cities and 191 countries. The company also promotes "experiences" on its website, like live concerts, bicycle tours through Bangkok or tiramisu cooking lessons from a family in Milan. Home-sharing services, like Airbnb and [Vacation Rentals by Owners], have grown in popularity for offering rooms usually at a cheaper rate than most hotels.

"Airbnb helps Arkansas families turn what's typically one of their greatest expenses -- their rent or mortgage -- into a tool to help make ends meet," Laura Spanjian, Airbnb's public policy director for Arkansas, said in an email Thursday.

Before agreements were made at the state, city and county levels, home-sharing services had come under scrutiny for evading taxes the taxes collected by commercial lodging businesses. Arrison said it was considered an "unfair advantage."

"To me, it's a microcosm for what's going on with the sharing economy services," said Martin Thoma, principal at Thoma Thoma marketing firm in Little Rock. "It's generating whole new income and revenue streams for individuals."

After looking at Airbnb's report, Thoma wondered if the stats reflect growth in the whole industry. "The question is, is that a case of a rising tide lifts all boats or are they stealing from bed and breakfasts and other hotels. I think it's the latter."

Guests who stay in Airbnb listings in Arkansas now pay a state gross receipts tax of 6.5 percent, a state tourism tax of 2 percent and local sales and use taxes, which vary by city and county. In select cities there are advertising and promotions taxes that vary between 2 percent and 3 percent of the listing price.

Airbnb remitted $1.2 million in collected tax revenue to the state last year. In 2017, Arkansas hosts earned a combined $8.5 million and welcomed approximately 78,000 guests.

As home-sharing services continue to convert skeptics into believers, traditional lodgings try to keep their edge. Arrison said hotels are marketing better and "offer a lot of things that Airbnb and home-sharing services do not. Everybody's adapting to the new marketplace."

Eileen Thoma, 63, of Fayetteville leases the basement of her home just north of the Pi Beta Phi sorority house near the University of Arkansas, Fayetteville. Thoma, Martin Thoma's sister, said she rents it to parents visiting their children, sports fans in town for Razorbacks games or riders passing through for Bikes, Blues & BBQ.

"Most of them are from Texas," she said. "I get a few from other states, but a huge amount are Texans and they're super nice."

Thoma said she first listed her home on Airbnb about two years ago.

"It feels good to be able to talk about our bike trails and everything Fayetteville has to offer," she said. "If you stay in a hotel you're not going to find that."

Business on 01/11/2019

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