One who intends to leave others better off for his having existed.

12/20/13

Is Airbnb big enough to force downtown Greensboro GPAC hotels to lower their prices to compete with local private one night rentals?

"Five-year-old housing rental site Airbnb seems — at least thus far — a success story: During its busiest season (summer), another traveler checks into an Airbnb residence or room every two seconds, and the number of travelers using Airbnb has doubled — to 8.5 million as of September — during this year alone. There are now more than 500,000 listings (ranging from single rooms to multi-room houses) in 33,000 cities around the world. “It is the biggest lodging brand in the world,”...

Marriott International, for example, has 3,800 hotels and 666,000 rooms and InterContinental Hotels Group 4,600 hotels and 679,000 rooms.

...some experts say that Airbnb has already depressed hotel pricing in some areas.

"Airbnb is putting price pressure on hotels on a neighborhood-by-neighborhood, rather than city-by-city, basis,”

...assuming Airbnb pricing is low (which it often is), you might start seeing price pressure on hotels when Airbnb makes up about 10% of the supply in that market. This is, of course, a very general rule. It’s already happening in some neighborhoods and is expected to spread.

...Airbnb has some tax hurdles it may need to clear: Most cities and municipalities don’t currently collect taxes from Airbnb users like they do with hotels...

...“Supply added to the market isn’t a good thing for hotel operators,” says Weissman. But whether or not Airbnb will have a major impact on these prices is a game of “wait and see,” he says. “We need to see whether it really gains steam.”

Market Watch
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A new 3,000 seat performing arts center in Downtown Greensboro during what looks like to be a deep recession may spawn local vacant property listings to be utilized for consistent downtown patron accommodations within a $5 cab ride of downtown.

Feels like there will also be some bed and breakfast facilities opening up upon completion of the GPAC, that may have to compete with what may be local government subsidized hotels.

If so, our local elected leadership may indirectly stifle small business and entrepreneurship growth by rewarding their campaign contributors with some of everyone else's money, even as the business model for hotel rooms morphs into another realm.

If Greensboro builds the GPAC, which looks shaky if financial markets correct and some of the monies pledged don't/can't materialize, our community should support small business over entrenched elites trying to skim higher profits off their ownership of downtown properties at the expense of everyone else.

There is still no accounting of where the $30 million raised so far for the GPAC is located, or what the downside risks are for said funds if the monies are not safely invested for the short term.

As far as I know, the city of Greensboro is not in possession of contractually binding agreements for payment of the pledges with back up lines of credit from financial institutions, which were supposed to be in place before any money was borrowed or spent, which has already occurred.

City staff and Council to my knowledge are unaware of the costs for the bills the Community Foundation, led by those who stand to personally profit from the GPAC, is running up for architecture etc...

As a community, we are flying blind while those who stand to profit from the GPAC are at the controls, probably believing those passively sitting in their seats will pick up the tab if they mess up, as they already have considering David Hagan's $586,000 commissions received while sitting on the GPAC taskforce.

If the newly installed city council doesn't take some kind of control, they will be found to be at fault, even though the process was begun by a previous administration.

If some businesses are propped up with taxpayer money at the expense of others in the process, the current city council should be held to account, for they will have violated the concept of free market capitalism in Greensboro.

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