The hotel industry asked the government for a $150 billion bailout during a meeting with President Trump and his administration yesterday. This presumably would not be extended to short term rental operators and leaves the industry to fend for itself.
On the same day, Airbnb, the most prominent company in the sector, called the government to help short term rental operators who are solo-prenuers and small businesses in a letter to Congress.
Airbnb’s recent decision to expand its “extenuating circumstances policy” to allow cancellations without penalty in response to the pandemic caused an uproar among hosts. They voiced anger over the tremendous financial hardship from the cancellation policy.
Airbnb emailed hosts on Tuesday informing them of a plan the company is working on for hosts. “We are going to get through this crisis as partners—our success is dependent on the success of you, our hosts. We are working day and night on a plan of action that will help you get through this extremely difficult time. We will share this with you as soon as possible in the coming weeks.”
On the same day, Airbnb’s policy and communications chief, Chris Lehane, sent the letter to Congress asking the government to consider several tax breaks for hosts, many of whom he said depend on income from Airbnb rentals.
In the letter, Airbnb proposed four measures to support short term rental operators:
1. Increase rental income earning opportunities: Expand the Minimal Rental Use federal income tax exemption to 60 days from 14 days.
2. Let Americans keep more of their supplemental income: Introduce a tax credit or an allowable deduction or deferral of taxes on the 1099 income earned by short-term rental operators and travel industry solo-entrepreneurs and small businesses.
3. Ensure access to SBA disaster loans: Clarify that short-term rental operators and travel industry solo-entrepreneurs and small businesses are eligible recipients of the SBA Economic Injury Disaster Loans (EIDLs), made available in the context of COVID-19 following the March 6, 2020 emergency supplemental.
4. Incentivize low interest loans: Incentivize lenders with a transferable tax credit or tax incentive for providing low interest loans to short-term rental operators and travel industry solo-entrepreneurs and small businesses.
These measures are a start, but not enough especially given the uncertainty surrounding how long it will take before the industry rebounds. Solo-entrepreneurs and small businesses that make up a majority of the sector need stronger advocacy.