In an effort to work more closely with local municipalities and address the array of concerns officials have with its business model, Airbnb has redoubled its efforts to collect taxes from its hosts.
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The home-sharing leader collected and redirected $175M in taxes for local governments in 2016, from $42.6M in 2015, or four times the amount. Those taxes were collected in 20 cities in 2015, but 220 cities last year. Keep in mind that Airbnb has added upward of 1 million listings to its site since 2015. Currently, the firm has 3 million listings throughout 50,000 cities in 190 countries, according to its tax revenue report.
Tax fee collection has been a major concern for city officials since Airbnb's inception eight years ago. The firm, still considered an adolescent in the industry, has been criticized by municipalities and hoteliers around the globe for its lack of accountability and transparency regarding hosts, eating away at taxable income and inflating rents in already tight housing markets.
Bryan Younge, Colliers' Hospitality & Leisure and Valuation Advisory Services practice leader, told Bisnow the company’s move to assuage tax concerns is a smart play.
“The taxes are a good way to get in the good graces of various government leaders responsible for making decisions on recognizing Airbnb as a business model that’s fully accredited,” Younge said. “Once you start collecting taxes, then the government can fund efforts to work with them and make sure they’re being safe, legal and responsible.”
Following its latest round of funding in August when the firm raised $850M, Airbnb is valued at $30B and recognized as one of the fastest-growing unicorns in the market, followed by shared economy companies Uber — recently valued at $66B — and WeWork, worth roughly $17B.
As of July 2016, Airbnb's revenue jumped 89% year-over-year from $900M to $1.9B, San Francisco Business Times reported.
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