The growth of Airbnb and why it now helps Utah

The growth of Airbnb and why it now helps Utah

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SALT LAKE CITY — While it remains a minority in Utah’s lodging industry, Airbnb and other home-sharing apps are growing in Utah as tourists opt for alternatives to hotels.

However, only recently has it helped pad Utah’s growing tourism tax revenue.

Roughly 246,000 people spent about $35.6 million using Airbnb — which allows homeowners to rent out their homes to others — in Utah, the company estimated. That number is 150 percent year-over-year growth, according to company spokeswoman Jasmine Mora.

Yet in the grand view of things, the online service isn’t the largest generator of lodging in Utah — at least not yet.

In 2015, which is the latest that information is available, lodging accounted for $1.4 billion of the $8.17 billion Utah drew in from tourism during that year, according to the Utah Office of Tourism. Of the overall lodging total, $1.14 billion came from out of state users.

While it doesn't provide much toward the revenue now, Utah officials are happy that they are now receiving at least a revenue from its usage.

Utah reached an agreement with the company over taxes last October. Those who book listings in Utah pay a combined sales tax (that ranges from 5.95 to 8.35 percent), local transient room taxes and any other applicable taxes. Since that agreement, Mora said it generated more than $2 million in tax revenue for the state in 2016.

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“They’re now coming into the traditional tax structure and paying their transient room tax just like hotels do, which is really important because it creates equity,” said Vicki Varela, managing director for Utah’s Office of Tourism. “There’s no reason one entity that provides overnight stays should pay taxes while another doesn’t pay taxes.”

Tourism appears to be a prime usage of the app and its 2016 figures shed light on the popularity of Utah’s budding tourism industry.

Salt Lake City claimed the top spot where Airbnb was used, but Park City, Moab, Kanab and Washington rounded out the top five. Those five accounted for roughly 46 percent of Utah’s Airbnb usage last year.

"From its beautiful mountains to its national parks, Utah has long been an incredible destination for travelers from across the globe, and now Airbnb is helping families see the state through the eyes of a local while putting millions of dollars every year into the pockets of middle-class families,” Mora said.

Utah’s total tourism revenue rose from $5.7 billion to $8.17 billion from 2005 to 2015. With the Utah tourism economy on the rise, home sharing apps are likely to rise in popularity too.

And while it doesn't provide much in tax revenue now, Varela said it does set Utah up well for the future.

“As the sharing economy grows, we expect to see a larger and larger share of tax revenues,” Varela said.

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Carter Williams

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