Traditional bed and breakfasts have been around for centuries, but they’ve been challenged in the past decade by the influx of thousands of Airbnb startups.
Airbnb, founded in 2008, has disrupted the marketplace while providing an alternative method for finding lodging — in direct competition with conventional options such as hotels and B&Bs.
Long-established bed-and-breakfast owners like Sallie Clark are frustrated that after years spent developing their businesses and conforming to regulations, Airbnb launched a new generation of travel hosts who’ve had to do little but advertise on the company website or social media and take reservations.
“It’s like Uber, a similar type of business where you’re competing with the taxis and you don’t have to meet the taxi requirements,” Clark said. “I know taxis are upset because it’s cut into their business.”
Clark said she’s not worried about the competition — all six of her B&B suites were full the weekend of Aug. 12-13 — but she wants a level playing field and for Airbnb and similar Vacation Rental By Owner operators to pay all required taxes.
“From my standpoint, I don’t think it’s all been bad,” she said of Airbnb competition, “but what’s frustrating for some of us is we had to go through all these zoning requirements, and somebody now can just open an Airbnb next door and do none of it and still make money.”
Clark and her husband, Welling, own Holden House 1902, which includes three buildings and more than a century of history on West Pikes Peak Avenue. They have five employees who help cook and serve breakfast, change sheets and towels, and clean and provide service.
“We’ve worked to step up our accommodations and show the differences between staying with us or at an Airbnb,” said Clark, president of Bed & Breakfast Innkeepers of Colorado. “Airbnb might work for you — but it might not if you want a higher level of service.”
Clark charges $155-$175 per night — with discounts for multiple nights — for suites that include private baths, flat screen TVs and often fireplaces while providing full breakfast and afternoon wine and cheese, plus other amenities like bathrobes, coffee and snacks. They’ll even act as concierge and make restaurant reservations or suggest the best or most private hiking trails.
“I don’t have a problem with Airbnb,” Clark said, “but I think they should change it to Airb, because you won’t get breakfast with most of them.”
‘Been a blessing’
A quick search on bedandbreakfast.com provided 18 full-service B&B options in the Springs area. At airbnb.com, more than 300 accommodations were listed, ranging from shared rooms at $30 to entire houses for much more.
Samantha Sargent and her husband, Brian, became Airbnb hosts in mid July, renting part of their modest Springs home southeast of Memorial Park for $65 a night for up to two people, with an additional $10 charge for each additional person.
“We have loved it, although there have been ups and downs,” Samantha said. “I’ve always wanted to have a bed and breakfast but hadn’t pursued it. By treating this as a business, we’ve flourished. It’s been a blessing because I needed to stay home with the kids and we needed more money.”
Airbnb provides $1 million in insurance for accidental damage and liability if users are registered through that website. Service fees to operate an Airbnb are typically 3 percent for the host and 5-15 percent for the guest.
Clark notes that traditional B&B owners must pay higher commercial property tax rates on rooms they rent while Airbnb hosts do not.
Both traditional lodgings and Airbnbs collect the same tax of 10.25 percent — with 2 percent of that Lodgers and Automobile Rental Tax and 8.25 percent for sales tax — according to information provided by Colorado Springs Budget Manager Charae McDaniel.
If the vacation rental uses other sites for listings, they need a sales tax license. The city actively enforces that, according to McDaniel, but has no other requirements on Airbnb or other Vacation Rental by Owner operations.
Opportunity in Springs
Erin Spradlin and James Carlson are a married couple in their mid-30s who live in Denver. They say operating an Airbnb was a transforming experience for them.
“We got into it because we were dating and spending a lot of time together,” Spradlin said. “It took about an hour before we made our first $100; there’s a great demand in Denver. My parents are doing [Airbnb] in the Springs where I grew up, and they bought a second house to use for it.”
Carlson never considered it akin to a traditional B&B because they had been hosting younger, tech-savvy customers. Now just about everyone knows about Airbnb.
“It kind of changed our lives,” Spradlin said. “We paid off credit card debt, student loans, bought a car, made a 5 percent down payment on our primary property and bought two investment properties.”
They eventually quit their jobs and became Realtors while encouraging others to enter Airbnb’s marketplace. Denver now allows Airbnb hosts to only rent out their primary residence, but there is no such restriction in the Springs.
“It’s an amazing investment opportunity for our clients and they’re seeing an incredible return,” Carlson said. “We were doing tiny studios in the heart of Denver. There’s a wide range that I think can be successful in Colorado Springs, from loft studios downtown to a four-bedroom house near Garden of the Gods.”
Clark warns that risks are involved when hosting strangers in your home, including damages and theft. During the Waldo Canyon fire in 2012, Clark said she lost about $10,000 in income due to cancellations.