Portland is becoming a favored destination for users of the online vacation rental company Airbnb, but hotel operators and some cities are unhappy about the growing popularity of the service, which is cutting into profits and in some cases operating outside city or state laws.
Airbnb, which connects potential customers with people who have rooms, apartments or homes available for short-term rentals, is becoming a popular alternative to traditional hotels because it can offer a more personal vacation experience and, in some cases, rates that are cheaper than a hotel room.
“It’s the difference between going to 7-Eleven and going to a mom and pop store,” said Nathan Eldridge, a Portland resident who recently started listing a unit in a “classic old Portland” building that he owns on State Street. “(Airbnb) is a more personal way to travel.”
Eldridge, 40, charges $175 per night to stay in his apartment, which is booked through the rest of the summer. Among the apartment features noted in his listing are local art and a carved slate fireplace that was original to the home, built in 1884.
Eldridge, whose photography business often takes him out of town, said listing his apartment through Airbnb has been, so far, a positive experience that earns him money.
“I like the idea that I’m a local ambassador,” he said. “It’s been very well-received and making me feel more connected to the community.”
Portland was listed as one of Airbnb’s top 10 places to visit this summer. Bookings were up 328 percent from last year, according to Airbnb. There are currently about 350 Airbnb listings in the Portland area, and more than 1,000 listings statewide.
The Portland listings range from a “spacious downtown flat” to an “amazing location in renovated home.” There’s even a Bar Harbor campsite listing for a wooden platform where guests can set up their own tent and have access to a shower and washing machine.
Nathaniel Meiklejohn listed his $200-per-night West End apartment on Airbnb last summer to make some extra money while he planned to open a bar. He stopped listing it after his landlord objected, but not before he had more than 22 bookings. He said Airbnb attracts a different demographic than hotels.
“They’re probably people who would normally stay at a bed and breakfast or would crash on a couch,” said Meiklejohn, 34.
Meiklejohn had his girlfriend, a graphic designer, create a map and guide to Portland for his guests. He also made personalized recommendations for guests, and even grabbed a beer with some of his friendlier ones.
“Some people chose to book with Airbnb because it’s cheap,” Meiklejohn said. “And then there’s people who are the heart and soul of Airbnb and want to hang out with people who live in the city.”
The San Francisco-based company, created in 2008, has vacation listings in more than 34,000 cities and 190 countries. Potential hosts can list their properties with brief descriptions of the amenities and house rules, along with photos, available rental dates and prices. Hosts are required to verify their identities with Airbnb.
Airbnb charges hosts a fee to list the rental and handle the bookings. Guests are charged a fee of 6 percent to 12 percent on top of the room or apartment rental fee.
The company, which has a current valuation of $10 billion despite being only six years old, has traded on the growing popularity of online sites that offer peer-to-peer, short-term vacation alternatives to hotel rooms. Similar sites include VRBO, which stands for “vacation rental by owner,” and its parent company, Homeaway, which started in 2006 and operates rental websites in several countries.
But bending the usual lodging rules is landing those sites in trouble. There has been a backlash from some cities where Airbnb and VRBO operate.
In San Francisco, for instance, city officials said the services are operating outside of the city’s housing laws. In New York, the attorney general sued Airbnb, demanding its client list and arguing that the short-term rental arrangement is against state law.
Critics point out that the peer-to-peer rental services lack regulatory oversight, noting a recent, highly publicized incident in which an Airbnb guest used a rented New York apartment to throw a sex party. Other incidents have included homeowners who found their belongings stolen or their apartments destroyed by guests.
Airbnb did not respond to several requests for comment.
In response to the bad publicity, Airbnb added stricter ID verifications and a guarantee that provides financial protection to a host for damages to property. The service said it also was working with some cities to ensure local taxes are paid on the rentals.
According to city spokeswoman Jessica Grondin, the service is technically illegal in Portland, under laws that any residential property rented out for fewer than 30 days must be registered as a lodging property.
Grondin said services like Airbnb operate in a gray area, and the city has not received complaints about it.
Hotel owners, however, are keeping an eye on such services.
“You’re cycling people in, you’re cycling people out and you don’t have the license to do what hotels do,” said Greg Dugal, executive director of the Maine Innkeepers Association. “(Hotels) have a lot invested in what we do and they are kind of taking advantage of us.”
Dugal said he gets calls daily from owners of hotels and inns who are frustrated with Airbnb’s presence, believing that such services cut into tourist business.
“There’s no question that this preponderance of additional rooms is affecting the industry … and stealing business,” Dugal said. “It’s cheaper, but they’re not following the law.”
Dugal said peer-to-peer rentals that aren’t regulated have the potential for unsafe activity. “Consumers aren’t as concerned with jurisdiction as they are with safety,” he said.
Dugal said a bill was introduced in the last session of the Maine Legislature that would have required licensing for all short-term rentals, but it didn’t get much attention and eventually died. He said no further regulatory legislation is being proposed, but he would still like to see a more explicit definition for overnight occupancy in Maine.
“If you talk to most city officials, they don’t want to or don’t have the capacity to check and see what’s going on,” he said.
Airbnb fans, however, say they like the close arrangement between host and guest.
Eldridge said he tries to personalize each guest’s stay, leaving a bottle of champagne, strawberries and romantic restaurant recommendations for couples celebrating an anniversary, for instance.
“It’s a little more personal,” Eldridge said. “Talking to a concierge can feel so corporate.”
Barbara Mascarenas and her husband, Robert, had previously done house exchanges, and decided in 2012 to list a studio apartment they own near Longfellow Square that was empty.
Since then, the couple has hosted more than 250 people at the apartment. They enjoy having guests who may not be able to afford an Old Port hotel and might otherwise have to stay at a cheaper hotel outside the city.
“Maybe we are (stealing hotels’ business), but the money we are making is going right back into the community,” Barbara Mascarenas said. “It’s staying right here in Portland. We’re keeping it local.”