JUSTIN SORENSEN / WATERTOWN DAILY TIMES
Kate Griffin, owner of Jacob Brewster House Bed and Breakfast in Sackets Harbor says she still sees a ton of business during the summer even though she doesn’t use an online rental service.
By SUSAN MENDE, BRIAN MOLONGOSKI & STEVE VIRKLER
SMENDE@OGD.COM, BMOLONGOSKI@WDT.NET, SVIRKLER@WDT.NET
When Jennifer J. and Kevin L. Blanchard started booking guests this summer in two of their rental cottages, they decided to list their places with Airbnb, an online global network.
The Potsdam couple wasn’t sure how many customers the site would attract, but they’re definitely not disappointed.
Since July when signing on, the Blanchards have already generated about 20 bookings through Airbnb for their two cottages, one in Potsdam, and the other on Lake Ozonia.
Travelers from as far away as Ireland found the Blanchards through Airbnb.
“It is working well for us,” Mrs. Blanchard said. “We’ve had a lot of guests from New York City who wanted to get out of the city.”
Airbnb and similar sites, such as Vacation Rental by Owner, (VRBO), Home Away and Adironack By Owner, connect people from around the globe with overnight lodging in private homes, camps and cottages.
The rental cottage on Route 11B, Potsdam is adjacent to the couple’s small hobby farm where they raise cows, pigs, horses and chickens.
“We had one couple that was just amazed because they hadn’t been that close to horses. They just liked to watch the horses graze,” Mrs. Blanchard said.
She said some repeat customers discovered the Blanchards on Airbnb. The Blanchards have two properties listed on the Airbnb site.
Earlier this year, Jefferson County Board of Legislators Chairman Scott A. Gray attended a county executives conference in Buffalo.
Also at the conference were officials from the popular bed and breakfast rental service Airbnb, who gave a presentation on their service and told the audience they were more than willing to start paying occupancy taxes.
“They stood right up in front of us and said ‘we welcome you to tax our services under your occupancy tax program,’” Mr. Gray said.
According to the Airbnb website, the company has 107 rentals listed in Jefferson County, 95 in St. Lawrence County and 32 from Lewis County.
North country counties all have their own occupancy tax laws in place, allowing them to collect fees assessed on hotel room rentals. Jefferson County has a 3 percent occupancy tax rate, though facilities with six or fewer rooms are exempt from the tax. They are not exempt in St. Lawrence or Lewis counties, however.
So far, services like Airbnb and Vacation Rentals by Owner are not required to pay occupancy tax unless required to by a local law. There is currently no law in Jefferson County requiring online vacation rental services to pay occupancy tax.
County Treasurer Karen M. Christie said there have not been discussions with county officials over potentially changing the local law. While St. Lawrence County now requires Airbnb to provide occupancy tax revenue, Mrs. Christie noted that she is wary of trusting Airbnb to provide Jefferson County the proper amount of occupancy taxes owed, as monitoring Airbnb properties is up to the company, not the county.
Whether Jefferson County eventually does bring Airbnb under the occupancy tax umbrella depends on its effect in other counties, Mrs. Christie said, such as St. Lawrence and Essex counties. Essex County changed its local law this year to encompass Airbnb rentals.
If these counties are collecting a substantial amount of occupancy taxes from Airbnb rentals, Mrs. Christie said Jefferson County could consider following suit.
SERVICES A BIG DRAW
The VRBO site has 121 property listings in St. Lawrence County, 196 in Jefferson County and 54 in Lewis County. The Adirondack Vacation Rental site lists six rentals in St. Lawrence County: two in Colton, two in Hopkinton, and one each in Parishville and Hermon.
Brooke E. Rouse, executive director of St. Lawrence County’s Chamber of Commerce, said sites like Airbnb, VRBO and Adirondack by Owner have helped bring overnight tourists and their dollars to parts of the county that lack hotels or other accommodations for guests.
“This allows people to stay in the community and when they’re in the community they’re eating, and they’re shopping and they’re spending money,” she said. “There’s people traveling all over the world who are searching through those sites.”
So, for example, she said if someone from Germany can find Canton, Waddington or Ogdensburg on Airbnb they may stay in one of those communities.
“That’s going to get people into the county who we may not have been able to reach otherwise,” Mrs. Rouse.
She said it’s difficult to quantify how many tourists are traveling to the county as a result of Airbnb and similar sites, but based on anecdotal information she said renters have been generally pleased with the results.
Jenny D. and Brian Walker list their bed and breakfast, The Guest House at 1844, on Airbnb. Mrs. Walker estimated that only a small portion of their businesses is generated through Airbnb bookings, about 5 percent. Most customers book their room through the website the Walkers created for their guest house, she said.
She said the process of listing rooms as well as booking rooms is very user-friendly on the Airbnb site. The company keeps 5 percent of the room charge.
A DOWNSTATE ISSUE
The most recent blow to the Airbnb world came at the end of October, when Gov. Andrew M. Cuomo signed into law a measure that imposes fines of up to $7,500 on Airbnb hosts in New York City who advertise rentals in multi-unit buildings for fewer than 30 days.
The New York Times reported that Airbnb collects nearly $1 billion from New York City hosts.
Airbnb subsequently filed a lawsuit against Attorney General Eric T. Schneiderman and New York City Mayor William De Blasio amid concerns that such a law will significantly hurt revenues. The New York Times also reported that Airbnb is contending that the law interferes with its protections under the federal Communications Decency Act, which says websites cannot be held accountable for content posted by users.
The service is facing similar laws in other cities around the world, including San Francisco, Barcelona and Berlin.
The legal saga ties into Airbnb’s ongoing search for legitimacy in the hotel and vacation rental world.
Slate reported in an article last year that Airbnb wants to start paying occupancy taxes in order to be recognized as a more legitimate rental service. In New York City, where the service is not required to pay occupancy taxes, Airbnb officials estimated in 2014 that it could have contributed $21 million in taxes.
This has led Airbnb to attend government conferences, including the county executives conference in Buffalo last February, to plead there case for following the rules and properly paying occupancy taxes.
In St. Lawrence County, the agreement approved in September with Airbnb is helping to generate some much-needed occupancy tax revenue for the county.
The company is now required to charge the 3 percent bed tax on county properties that are booked through their online service. The company has agreed to charges the tax at the time of booking and send the county a check each month.
The county’s first check from AirbnBb was for $571.62 for occupancy tax collected during September. The check for October is expected soon.
Mrs. Rouse said she will be interested to see how the revenue through Airbnb fluctuates throughout the year; she anticipates collections will peak during the summer months.
County Attorney Stephen D. Button is working to get similar arrangements with VRBO and Adirondack by Owner so that the county can also generate bed tax through those sites.
The system with Airbnb is working well, he said.
“It’s a great set-up. The county doesn’t have to track down the renters and we don’t have to deal with the collection aspect.” Mr. Button said. “They just send us a check every month.”
Occupancy tax revenues have been steady in Jefferson County for the last five years, fluctuating between $850,000 and $1.1 million per year since 2011. So far, Mrs. Christie said 2016 is on track to beat 2015’s overall intake of $902,963.
The county provides 49 percent of the collections to the towns where it’s generated with the condition that it’s used for tourism promotion. It also allocated $494,000 to the Thousand Islands Tourism Council this year and in 2015.
Lewis County’s 5 percent hotel occupancy tax applies only to hotels, motels and bed and breakfasts and typically brings in around $85,000 each year to the general fund.
However, county officials said they are reviewing St. Lawrence County’s expansion of that tax to vacation rentals like cottages and requirement that Airbnb collect it on the county’s behalf.
“That’s something that maybe we’ll explore,” Lewis County attorney Joan E. McNichol said.
That would likely need to take place through the legislative committee process, and Ms. McNichol said she would like to see how the change plays out in her neighboring county before recommending any changes be made to her county’s law.
Mrs. McNichol and County Treasurer Patricia L. O’Brien said they would be somewhat wary about pushback from owners of cabins and other such rentals if a change was proposed. However, they were surprised that nearly 20 Lewis County properties are listed on Airbnb and suggested the volume may make it at least worth further research.
With reporting and payment of bed tax essentially done by lodging establishments on an honor-system basis, the primary goal – no matter what lodging categories are included – is to apply the law as consistently and fairly as possible, Mrs. O’Brien said.
Gary S. DeYoung, executive director of the 1000 Islands International Tourism Council, said that many of the Airbnb users in the 1000 Islands region are bed and breakfast, commercial cottages, hotels and vacations homes that have done business in the area prior to rise of online rental services.
Mrs. Christie said that if rental services that normally pay occupancy tax but use Airbnb and other websites to advertise rooms, her department does have the ability to audit that service to ensure they are still paying occupancy taxes for those rooms.
County Attorney David J. Paulsen said penalties for not complying with occupancy tax law include interest payments, assessments and treasurer bed tax revenue estimates rental services would be required to pay if they initially fail to comply.
Mr. DeYoung said there are approximately 10,000 vacation properties in the region. Any online rental regulations set forth by the government should be specific differences in markets, he added. The 1000 Islands region is more of a vacation home rental destination, while New York City is based more on hotel traffic.
Katherine C. “Kate” Griffin, who has owned the Jacob Brewster House Bed and Breakfast in Sackets Harbor for decades, said she has not noticed a drop in business even as online rental services gain popularity.
Ms. Griffin said those who rent rooms at a bed and breakfast are usually looking for the bed and breakfast experience, which includes more interaction and attention from the owners. And there are plenty who still seek that out, she noted. If anything, she said business at the Jacob Brewster House has increased. The home has four bedrooms, and they are usually occupied most nights during the summer. Ms. Griffin said business was particularly steady this year, and she had to increase the minimum stay from one night to two nights to make the flow of customers more manageable.
“(Airbnb) doesn’t seem to have hurt our business,” she said. “I can’t speak for others, but we had a very busy summer. I think that people that come to bed and breakfast are looking for something different.”
Though she does not use Airbnb, Ms. Griffin said she supports the service, adding that it can be a cheaper alternative to local hotels for those traveling long distances.
A COMPATIBLE SERVICE
But that doesn’t mean the local hotel market has necessarily taken a hit.
The 1000 Islands Harbor Hotel, one of the more expensive hotels in the area, saw a growth in business this past summer. Todd W. Buchko, general manager for the hotel, told the Times in September there were 9,756 room rentals between May 1 and Aug. 31 this year, 271 more bookings than the same time last year. Mr. Buchko had said that the warm weather and increased marketing efforts, including increased social media use, for both the hotel and Clayton businesses and attractions brought more clients to the hotel and the area.
Anthony J. Fiorentino, property manager for Swan Bay Resort and Marina in Alexandria Bay, uses Airbnb, VRBO and HomeAway as supplemental advertising sources for its cottage and chalet rentals. The resort has been using the websites for the last few years, but Mr. Fiorentino said most reservations are still made through the resort’s main website. Reservations made through Airbnb account for less one percent of the resort’s total reservations, he added.
“We are out there just to be out there, just for the exposure,” Mr. Fiorentino said.
Mr. Fiorentino said that he still pays occupancy taxes on rooms that are rented through an online rental service.
Patricia A. Orr, of Syracuse, owns a mobile home in Clayton that vacationers can rent out through Airbnb. She has used Airbnb for the last four years. She said she previously used TripAdvisor, but she was getting too many spam rent requests at the last minute.
Ms. Orr said the Airbnb service has been great for business, as people from all over the country and as far away as Germany have rented her property. She said the most business happens between May and September, and tourists rented her mobile home nearly every night this past summer. She charges $125 per night.
Some property owners list their lodgings on just one online network, while others try multiple sites.
John Paul Pfeiffer, a former Brantingham resident who now lives in New York City, uses Airbnb and several other sites to market Grand Island on Brantingham Lake, as well as a shoreline cabin.
“We have used Airbnb for the Island rental for about two years now,” Mr. Pfeiffer said by email.
He said the site has landed only two to four bookings each year for the lakefront properties but there has definitely been an uptick in Airbnb interest on them this summer over the previous one.
“Airbnb seems to be getting more popular in this area as the company and its reputation grow,” Mr. Pfeiffer said.
The seasonal island rental cottage includes four bedrooms and comes with use of a pontoon boat. There is a two-night minimum stay.
Mr. Pfeiffer said summertime vacation rentals like his properties don’t really fit into the mold of year-round motels, hotels or bed and breakfast establishments on which bed tax is collected.
“Our rental income does not even cover our taxes every year, let alone insurance, operating and other expenses associated with the property,” he said.
John S. Durand said he has only gotten a couple of customers through Airbnb over the past couple years at Beaver Creek Lodge between Copenhagen and Barnes Corners. However, the seven-bedroom, restored farmhouse on 400 Tug Hill acres has been listed on other sites like Home Away, Trip Advisor and VRBO.com for longer with positive results.
“It pays the taxes and lets us keep a place up in the north country,” said Mr. Durand, a Maryland resident whose late father-in-law bought the former dairy farm two decades ago.
The lodge, which also advertises in the Lewis County Chamber of Commerce travel guide and on trail maps, gets a “nice mix” of people, including all-terrain vehicle riders, snowmobilers, hunters and families of Fort Drum soldiers.
While the lodge is not required to collect sales tax, Mr. Durand said he does tack on the 5 percent bed tax and submit it to Lewis County on a quarterly basis.