Airbnb: Opening Homes to the New Economy

by AARON PARRETT

Montana seniors looking for extra revenue after retirement have found they don’t have to work too hard after all. They’ve opened their homes and tapped into a thriving economic industry: tourism.

Tourism is one of the leading drivers of economic growth in Montana. According to the Governor’s Office of Economic Development, almost 12 million tourists visited Big Sky Country in 2016, contributing $3.6 billion dollars to the state’s economy.

That trend happens to coincide with the rise of Airbnb, an online marketplace of individuals who rent out their properties and living spaces to travelers seeking affordable accommodations.

A report issued by Airbnb press secretary Jasmine Mora stated Montana Airbnb hosts in particular earned about $20 million in 2017 while serving nearly 147,000 guests in their private homes.

Pricing is often competitive with nicer hotels, and many tourists prefer the benefits of a cozy stay in a place that feels homey.

Mora stated nearly a quarter of Airbnb hosts are 60 years or older, with typical reported annual earnings for Montanans falling around $6500.

The philosophy behind the company is pretty simple: connect travelers to local people and culture by offering opportunities for them to stay in local dwellings.

While hotels are often located on the outskirts of towns, forcing tourists to drive to food and nightclubs, Airbnbs commonly involve a house in a local neighborhood within walking distance of entertainment.

Not only do the accommodations tend to be more comfortable and homelike than a chain hotel room, their locations immerse travelers in a neighborhood experience.

When Abdul and Kathie Kadri—both medical doctors in Billings—retired and moved to Missoula, they turned their carriage house into an Airbnb.

“We didn’t do it for the money,” Abdul explained. “We did it as an interesting thing to do and to compel us to renovate this old carriage house on our property.”

The Kadris rent their carriage house out for $119 a night, with a large discount of 15 or 20 percent for rentals of more than a week.

“It has been nothing but a positive experience for us, both as guests and hosts,” Abdul said. “We knew about Airbnb because we used them all over Europe and had just great experiences. And the same has held true here: we have had everyone from senior professors from back east to retired police detectives from Boston stay with us. The people are incredible, interesting people.”   

Airbnb, founded in 2008, is yet another consumer service that takes advantage of cell phone technology and the Internet. Though hosts get charged only 3 to 5 percent of the cost of their rentals, guests typically pay between 6 and 12 percent in booking fees.

Potential guests must sign up for the free service and provide a valid email, address, telephone number, and photo, as well as a credit card. Because potential guests have to create a public profile that Airbnb hosts can check, the service is considered by most hosts to be safe.

Theresa Cardiello of Helena, Mont., started renting rooms in her house through Airbnb in 2013.

“I took a trip back east to see the color change in the fall, and my adult children, who had all left home and done lots of traveling, told me to look into Airbnb,” she said. “I ended up staying in five different places, all Airbnb, and had great experiences.”

She came back to Helena and started offering the same experience to others as a host.

“When I started, there were maybe four or five in Helena at the time. Now there are over 100!”

Like the Kadris, Cardiello reported entirely positive experiences, both as host and guest. “Airbnb is really suited to the personality of the host and allows you to create a space that fits your life.”

She charges $55 per night with a 25 percent discount for stays of more than a week and a 50 percent discount for stays of a month or more.

In 2014, the Wall Street Journal reported that many homeowners on the brink of foreclosure had successfully turned to Airbnb to earn enough income to make their mortgage payments. In fact, many banks now recognize Airbnb earnings as income that will count during a home refinance.

Some U.S. cities and municipalities have subletting or occupancy laws that require additional permits and registrations. Airbnb does maintain a list of cities requiring special permits on its website and will send tax forms to hosts who earn more than $20,000.

Missoula recently passed new licensure laws, and Kathie Kadri was among the first to go through the new process last year (2017).

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