Why DMOs Need Strategic Relationships with Airbnb. As destination marketing organizations around the country come face-to-face with one of the biggest players in the collaborative economy airbnb. Destination Marketing Association International is gearing up to help members understand the issues. Recently we caught up with Jack Johnson, DMAI’s chief advocacy and board compliance officer, to ask about it. He’s one of the new team brought in by Don Welch, who stepped in as DMAI president and CEO in April after leaving his post as head of Choose Chicago.
First, a little background on you. You come to DMAI from Choose Chicago, where you served as chief administrative officer and senior vice president, public policy. What will your role be within DMAI, and how does it relate to Airbnb?
This is a newly created position within DMAI. Our members have asked for more focus on advocacy, public policy, and research. We’re here to help them navigate the new economy, including understanding players like Airbnb.
What is DMAI’s position on Airbnb?
Airbnb is a legitimate option for lodging, just like boutique hotels, bed-and-breakfasts, and campgrounds. Airbnb is a global business with a platform offering a different product mix. In many destinations, there are tax, regulation, and compliance issues that have to be worked out. Overall, the realization is that Airbnb is not going away— it’s something many travelers want.
Airbnb made a pitch at the U.S. Conference of Mayors in Indianapolis later in June, touting that it now has agreements with 190 cities and states to collect and remit room taxes directly to government. The company claims that over the next decade it could provide at least $2 billion in tax revenue at the top 50 American cities. That’s a pretty strong pitch to cash-strapped cities.
In our experience with Choose Chicago, we found that Airbnb accounted for as many as 700,000 to 800,000 room nights on an annual basis. We also found Airbnb rentals fueling business outside the Loop [downtown Chicago], adding a whole new dynamic to the city. So yes, Airbnb is driving economic impact and visitation in many destinations, and they will remit increasing tax revenue as agreements are worked out in more and more cities. That’s why we think DMOs need to build a strategic relationship with Airbnb. It’s a vital driver for economic impact and visitor growth in many destinations.
How does Airbnb affect room blocks for groups?
DMAI released a study last year that showed one in in three group room nights is booked outside the contracted room block. While don’t have any data specific to Airbnb at this point, having this kind of lodging option certainly can mean more people booking outside the block. We have a long list of research and advocacy projects that we are considering in the next few months, especially around the effects of the sharing economy, and this is one topic that we will definitely be tackling.