Just a Thought: Instead of Extending Regs to Airbnb Rentals, Let’s Roll Back Regs on Hotels

No wonder hotels and B&Bs are worried about Airbnb competition. This room in Richmond’s Byrd Park area goes for $45 per night.

It’s totally understandable that the hotel lobby would want to tighten regulation over Airbnb rentals. As Bart Hinkle observes in a Richmond Times-Dispatch op-ed today, hotels want government to protect their market share.

The hotels put it a little differently. They want to create a “level playing field.” Said Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association last year: “We welcome Airbnb , but we just think they should be subject to the same requirements that a bed-and-breakfast or a hotel has to go through.”

Remarkably, many bed-and-breakfast owners are siding with the hotels. If they have to comply with federal, state and local laws, they say, then the Airbnb renters should, too. I understand their angst. If Airbnb rentals threaten anyone, it’s the bread-and-breakfast establishments that off a similarly intimate experience, not the giant, anonymous hotel chains.

But Hinkle raises a good question: “Making it hard for people to enter the market means fewer competitors and more business for the incumbents. Why does the kneejerk response to economic innovations always seem to involve tying them down with rules applied to older business models — instead of cutting the latter some slack?”

The rise of critiques on Yelp and other online venues arguably provide superior consumer protection than rules that regulators could devise. Writes Hinkle: “If you had a bad experience at a B&B a couple of decades ago, you might be able to warn a few friends. Today you can warn the entire planet.” Some rules are reasonable — everyone should pay the same tax. But perhaps it is time to revisit the old regulations and see if some are even needed anymore.