Math...
Math is so powerful it's scary sometimes...
Per the link below Attorney and Paid Corporate Lobbyist Frank Boston III (who was representing the Maryland Hotel and Lodging Association at the time of this article) said, "Make no mistake. This has become big business". Likewise, it indicates the city says hotel tax on AirBNB rentals would generate an additional $300,000 in revenue.
Oh really? Let's look at the math...
Per the article, 24,000 "visitors" stayed in AirBNB rentals from April 2015 to March 2016 as compared to 2 million "rooms" booked in Baltimore Hotels during the same period. Nothing like trying to subtly compare apples to oranges (visitors to rooms booked) for false light affect, right?
If we assume the average room occupancy is 2, then 4 million people stayed in hotel rooms in Baltimore while 24,000 people chose to use a far lower grade (and lower cost) overnight solution.
And as for that $300,000 in tax revenue Baltimore is supposedly missing out on...
While we're at it, just how much is Baltimore bringing in in Hotel Tax Revenue?
Increasing Revenue is never the solution for city improvement...
Why doesn't anyone put the real math in media articles like this?
And exactly who is this Frank Boston III who is making such egregious claims in the media??
Oh really? Let's look at the math...
Per the article, 24,000 "visitors" stayed in AirBNB rentals from April 2015 to March 2016 as compared to 2 million "rooms" booked in Baltimore Hotels during the same period. Nothing like trying to subtly compare apples to oranges (visitors to rooms booked) for false light affect, right?
If we assume the average room occupancy is 2, then 4 million people stayed in hotel rooms in Baltimore while 24,000 people chose to use a far lower grade (and lower cost) overnight solution.
- 24,000 airBNB visitors / 4,000,000 hotel guests = 0.6% of total Baltimore visitors stayed in AirBNB accomodations.. yes... we are talking about 0.6% of total visitors to Baltimore...
- AND if we assume the average hotel room occupancy rate is 3/room instead of 2/room, we get 24,000 / 6,000,000 = 0.4%...
- BIG BUSINESS says Frank Boston? The simple math says otherwise...
And as for that $300,000 in tax revenue Baltimore is supposedly missing out on...
- Assume the average overnight stay per AirBNB guest is $35
- $35 x 24,000 = $840,000 in total annual revenue split across 1000 properties (which means each property owner is making about $840/year which is $70/month... so based on the facts presented in this article, the every AirBNB host is hosting someone 2 nights a month...)
- $840,000 x 9.5% hotel tax = $79,800 and that is NOT equal to $300,000 in potential revenues...
- Hum. Not close to $300,000. We need to know more about those underlying assumptions... But do we really?
While we're at it, just how much is Baltimore bringing in in Hotel Tax Revenue?
- If the average hotel room rented for $150/night and there were 2 million of those rented... and the hotel tax is 9.5%...
- 150/night/room x 2,000,000 rooms/year x 9.5% = $28.5 million/year in hotel tax.
- If we compare actual potential tax revenue increase ($79k) to current revenue ($28.5M)... here's what it looks like... $79,800 / $28,500,000 = 0.28%... wow.. Baltimore can increase revenues by 0.28% by implementing hotel tax on AirBNB visitors. BUT if they add even 1 full time employee at around $50k per year to manage any aspect of this revenue, the net increase in revenue is zero, because a $50k year employee costs the state about $80k once benefits are added...
- If Baltimore can't fund the Charm City Circulator and other tourist related nicety's on $28.5 million, another $79,800 just isn't going to make a difference, especially if even one more city employee is required to manage this "cash windfall"...
Increasing Revenue is never the solution for city improvement...
- The average value of homes in Baltimore since I moved there in the mid 1990s has increased by a factor of 5-10 in the downtown neighborhoods. $30,000 to 60,000 homes now retail at $300,000 - 500,000, and we are talking about 1000's of homes changing at these values, not a few blocks. In the 1990's Baltimore had a 2.4% annual property tax rate, one of the highest in the country. It was high because property values were so incredibly low. Amazingly as that property tax revenue has increased by a factor of 5-10, bureaucrats and career politicians have not seen it appropriate to decrease the property tax rates and we don't have any greater of a level of city services than we had 20 years ago. And in fact, there is lower demand on Police and Social Services in gentrified neighborhoods. This is all so interesting and incredibly suspicious and appalling at the same time.
Why doesn't anyone put the real math in media articles like this?
- Oh... I remember now... because math is very powerful, and when math and ratios are included in reporting, true relevance of any given issue is far easier to asses, and it's also far easier to discern true and sincere motives from nefarious ones. Natalie Sherman ( [email protected] ) , the author of the article that conveyed this info has been sent a link to this web page and she has been asked if she'd like to comment, but she has remained silent thus far.
And exactly who is this Frank Boston III who is making such egregious claims in the media??
- Oh.. I see, he's a guy who billed over $575,000 in a single year to represent big business interests in Maryland.
- Sheesh... if he works a 200 days per work year.. that means he makes over $2800 per day for talking. Now that is AMAZING.
- http://www.baltimoresun.com/news/maryland/sun-investigates/bal-pictures-toppaid-lobbyists-in-maryland-201-002-photo.html