Alabama Airbnb and VRBO hosts top $100 million in rental fees

Airbnb, VRBO and other virtual landlords have transformed short-term lodging

Jake and Sidney Collins Freeman own and operate the Venue at Lakewood in Livingston, one of the many Airbnb and VRBO sites in Alabama. Photo by Art Meripol.

Some love it. Others are wary. But all agree, virtual landlords are upon us. 

Just as Amazon changed shopping, Airbnb, VRBO and other digital services transformed short-term lodging. That change is happening in Alabama, too, and it’s a growing trend here.

According to an Airbnb spokesperson, in 2021, Alabama hosts’ total income was $135 million. In the last two years, the Heart of Dixie was among the top states to see a 17% increase in private room listings, accounting for $3.5 million in hosts earnings.

The state is also served by VRBO and an estimated hundred more such online services. Hosts claim internet innkeepers offer a world of opportunities.

“We’ve had guests from all over, including the United Kingdom and China,” says Sidney Collins Freeman. She and husband Jake own The Venue at Lakewood in Livingston, an estate that could have stepped out of “Gone With the Wind.”

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“Airbnb lists the property, books reservations, collects the money,” Freeman says, adding, “It has options for hosts to review potential renter’s requests before accepting it. We like that. I want to make sure potential guests are on the up and up. It is important because you are literally inviting strangers into your home to spend the night.”

The Livingston host advises newbies: “Your goal is to achieve ‘Super Host’ status.”  It is no easy task. The property must be impeccably clean with an excellent staff. Judging is done through Airbnb’s customer feedback.

“We strive to maintain Super Host status,” adds Bradley Martens, property manager for JWJ Investment Properties in Monroeville. Towne Square Lofts and Lofts of 21 are located on the square in Monroeville’s Historic District. The renovated buildings are walking distance from the historic Courthouse of “To Kill a Mockingbird” fame.

“It is important to have city backing,” adds Martens. “We also have good support from the Chamber of Commerce.”  In Monroeville, internet bookings are a win-win for the hosts and the city. Monroeville/Monroe County Chamber of Commerce Executive Director Penelope Hines agrees. “Not only did JWJ Investment Properties renovate dilapidated properties, but they also added much needed short term rental options, such as Airbnb.”

AC Reeves, owner of the renovated Woolworth Lofts Building in Selma.

Meanwhile in Selma, AC Reeves, owner of the renovated Woolworth Lofts Building, two blocks from the Edmund Pettis Bridge, recalls a 2019 tenant breakfast. “I walked upstairs to see musicians gathered around the dining table in a loft with the door open,” she said. “Joan Baez was cooking breakfast.”

Property owner Reeves continues, “People have an intimate feeling with Selma when they spend the night in a building that is part of the town’s history. Take Joan Baez for example. She stayed an extra night and asked for a late check out.”

Reeves’ advice for using internet short-term booking services: “Don’t go around them. Sometimes guests want to book an extra day and they will ask you to do it. Wrong. Let Airbnb do it. They have the structure. They know what they’re doing. The fee is nominal.”

She adds, “Every host does things differently. Some rent one room, some rent several. But Airbnb allows us to highlight what we wish to show about our rental and our community. It is a very powerful tool.”

Other hosts agree with stipulations. “Document everything,” says VRBO host Suzanne Borchert, who rents a former residential home, two blocks from Gulf Shores’ beaches. “VRBO does a fantastic job of marketing and advertising,” the Atlanta resident adds. “But the majority of its revenue is from guests’ fees — not the property owners, and it shows in their level of support.” 

The online company typically sides with the renter, she says. “If a guest breaks something, VRBO’s attitude is ‘yeah, you need to deal with that.’” 

Also, VRBO, according to Borchert, does not vet. “You set up the rules (ages, occupancy limits, etc.) but VRBO doesn’t check any of that.”

On a positive note she adds, “90% of my rentals are from VRBO. It is good overall, but you must go into this knowing what to expect — the good and the bad.” Recognize red flags.

“For example, if someone calls from nearby, like Foley, wanting to rent my Gulf Shores house — that means a beach party,” says Borchert. “I say no.”

The city may say “no,” too, so property owners need to be aware of local regulations.

All Airbnb and VRBO listings reported in this story abide by the rules. But others, may have room for improvement.

“If you are making money in our city, you need a business license,” says Todd McDonald, director of planning and development for the city of Dothan, addressing property rentals through online sites. “Without a business license we cannot collect taxes.” 

At this writing Dothan is considering an ordinance covering rules and regulations for cyber short-term ventures. Zoning restrictions, business licensing and taxes will be covered. 

“People were complaining that rentals were interfering with the quiet enjoyment of residential property,” he recalls. “They said hosts were not obeying the rules. We looked and discovered we didn’t really have rules.” 

That is about to change.

“Don’t get me wrong; I am in no way against short-term rentals,” says Tami Reist, president and CEO of Alabama Mountain Lakes Tourist Association, based in Decatur. “But I am for a level playing field. I am against taking away from hotels who play by the rules, have certificates of occupancy, pay lodging taxes, and meet all state and local requirements.”

She notes that many people buying properties to list in online booking sites are from out of state. “Californians and New Yorkers can buy an Alabama property for a quarter of the cost of their states,” she says. “They can make a lot of money. It’s great for them but not for us.”

Joanie Flynn, vice president of marketing with Gulf Shores and Orange Beach Tourism.

Curiously, Gulf Shores and Orange Beach have fewer privately-owned short-term rentals than one might think. “It is impossible to count accurately,” says Joanie Flynn, vice president of marketing with Gulf Shores and Orange Beach Tourism. “The number of online rentals is ever changing. People put their rental rooms and properties on and off the market frequently. But most people here turn their rental properties over to professional agencies.”

But Flynn stresses, regardless of who manages the rental — online or local brick-and-mortar services — all rentals must be licensed in Gulf Shores and Orange Beach. Standards must be met. In Gulf Shores, each unit receives a safety inspection every three years. Both beach towns have rules in place and more are probably coming.

Like it or not, online short-term rentals are probably here to stay.

And if you have the right property to attract guests, make sure to follow the rules.

Emmett Burnett and Art Meripol are freelance contributors to Business Alabama. Burnett is based in Satsuma and Meripol in Birmingham.

This article appears in the December 2022 issue of Business Alabama.

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