The World Meeting of Families will draw possibly the biggest crowds Philadelphia has ever seen (although let’s not forget about the 1876 World’s Fair)– driving up demand for hotel rooms and private home rentals significantly.
While Philly hotel rooms top out around $900 a night for the World Meeting of Families, onAirbnb, rentals in Philadelphia are going for as much as $10,000 a night.
Such high prices could also be a boon for city coffers. City Council will vote Thursday, their last session before the summer recess, on a bill that would add an 8.5 percent city tax to rentals through services like Airbnb, set to take effect in July.
People familiar with the bill believe it will pass unanimously.
“Generally speaking I think it is fair, although the timing is a little suspicious,” said Andrew Schrage, co-owner of Money Crashers Personal Finance, of the new tax.
“The 8.5 percent tax is comparable, if not more lenient, than in other cities for Airbnb rentals. In Washington, D.C., it’s anywhere from 5 percent to 14.5 percent, it’s 11.5 percent in Portland, and it’s 14 percent in San Francisco.”
Queens Village residentJulia Giacoboni, who plans to list her home on Airbnb, said the upcoming “Popeapalooza” is a rare opportunity for homeowners and that the tax feels unfair.
“I think it’s a shame that it’s kind of in retaliation to people doing this for this one event,” she said. “We’re not in competition with hotels; we’re not going to put them out of business.”
West Philly resident Daniel Wolf said he’s thought about posting his living space on Airbnb. But he understands the motivation for a tax.
“It makes sense for Airbnb users to pay their share. I’m really happy to find new sources of revenue for the city,” he said. “It’s a poor city; it’s constant struggling to keep up services, so this is just another way for them to raise money.”
All of Philadelphia has only about 14,000 hotels rooms. According to Archbishop Charles Chaput, there are “barely” 65,000 rooms within an 11-mile radius of the city.
Ed Grose, executive director of the Greater Philadelphia Hotel Association, expectsvisitors to be seeking lodgings outside Phillyin Valley Forge, Conshohocken and South Jersey — evenas far awayas Atlantic City.
“The papal visit may be the biggest, most attended publicevent in Philadelphia in our generation,” Grose said.
Demand is definitely driving up rates for hotel rooms, Grose said.
Grose and his association firmly support the new tax on Airbnb-type rentals that will be voted on today.
“It’s a fairness issue,” he said. “The hotel industry is one of the most regulated industries in the country … our hotel taxes support bonds on the Pennsylvania Convention Center,PHLCVB [thePhiladelphia Convention & Visitors Bureau] and Visit Philadelphia.Airbnb rooms benefit from all threeof those.”
The proposed tax would fund those same entities.
The legislation would also make Airbnb legal.Currently, homeowners without proper licenses are not technically legally allowed to rent out their homes.
Tax or no tax, Philly residents are still likely to see a windfall.
“List your property on Airbnb now, and then keep an eye on the overall availability as the visit gets closer. Hopefully your place will get rented in short order, but by identifying supply and demand, you can get a better idea of when and if you should lower your price moving forward,” Schrage advised.
“I think you’ll see prices go higher and higher, although you might see a drop in price in the days before the visit. That’s typically when homeowners get nervous about their property going unrented.”