Agency levy unfair to ‘legitimate businesses’: Inn owner

A unique funding component of Envision Saint John: The Regional Growth Agency favours short-term rental behemoth Airbnb over ‘legitimate' local businesses, elected officials and local business owners say.

Envision Saint John is entitled to collect a 3.5 per cent tourism accommodation levy charged to travellers who stay at short-term accommodations like hotels, motels, inns and campgrounds, putting the money toward tourism initiatives, as a part of the funding agreement signed in 2021 between Saint John, Rothesay, Quispamsis, Grand Bay-Westfield, Hampton and Fundy-St. Martins.

But that levy isn’t collected on Airbnbs in the region, says Jill MacKinnon, the agency’s vice president of marketing.

She said a “provincial strategy” is required to deal with the tech giant, which is the largest online platform for booking rental properties, adding it would have “more impact” to take on the “large, large company” provincially.

The Telegraph-Journal reached out to the department of tourism, culture and heritage for comment, and was re-routed to the department of local government.

Media representative Vicky Lutes said municipalities can enact bylaws to charge a levy on Airbnbs.

"If legislative changes are needed, the department of environment and local government would be open to it, but the department has not heard of any specific changes required nor requested," she said via email.

There are just over 3,000 Airbnb listings provincewide, according to the website Inside Airbnb, a data aggregator which "provides data and advocacy about Airbnb's impact on residential communities."

There are 349 active listings on AirBnb in Saint John County, which includes the city proper as well as Fundy-St Martins and the surrounding area. In the last 12 months, listings were booked for an average of 76 nights and charged an average of $537 per night.

In Kings County, there are 138 Airbnb listings, booked for an average of 95 nights in the past 12 months for an average price of $162 per night. That data incudes Rothesay, Quispamsis, Grand Bay-Westfield and Hampton, as well as Sussex and surrounding communities which are not a part of Envision Saint John,

Martin St-Denis, owner of the Shadow Lawn Inn in Rothesay, said the accommodation levy amounts to unfair competition between local Airbnbs and his nine-suite inn, and “any other legitimate business.”

“Good corporate citizens like us are on the books, taxes paid,” he said, “Any Airbnbs in Rothesay just rent, get cash, and don’t declare anything.”

His comments came at a public meeting to discuss Rothesay implementing a tourism accommodation levy agreement, which is currently in place in Saint John and Quispamsis and also soon to be considered in other municipalities within Envision’s boundaries.

Envision is tasked with economic development and tourism promotion in the Saint John region, and MacKinnon says the 3.5 per cent levy is used for advertising and promoting the Fundy region in New Brunswick, Nova Scotia, Ontario, and the United States, along with other initiatives.

St-Denis said he could bypass the proposed levy by putting his inn’s rooms on Airbnb in order to remain competitive with other short-term rentals in town.

“It’s one thing to impose a tax on top of a tax for customers,” he said, “but how do we compete with the Airbnbs?”

Rothesay Coun. Bill McGuire noted the proposed bylaw includes bed and breakfasts— the titular “bnb” in Airbnb.

“I’m fully behind this,” he said, “it’s not a fair playing field."

MacKinnon said it’s difficult to keep track of the number of Airbnbs listed, as Envision has to collect the accommodation levy from each individual who offers short-term accommodations.

“It’s easy to find,” McGuire replied, “they’re on Kijiji.”

Other organizations in town also attended the public hearing to determine if their organizations needed to pay the levy.

The Villa Madonna Retreat House, for example, holds with faith and spiritual development retreats for people in the Roman Catholic Diocese of Saint John. Those retreats include overnight accommodations, but it doesn't advertise as a tourist destination.

"We're not in the overnight accommodation business," Mary Ann Kneeland said. "You can't just pay for a night."

Similarly, Paul McLellan, head of Rothesay Netherwood School, said while the boarding school provides lodging to students, "we don't offer anything to the public," though the school does hold camps for students during the summer months.

Rothesay town council supported the first reading of the bylaw on Monday night, but the town and Envision will consult further with business owners who may be exempt before the bylaw is finalized.

Marlo Glass, Local Journalism Initiative Reporter, Telegraph-Journal