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Bed-and-breakfast owners closing their doors blame Airbnb, local government

Ed Caldwell, owner of the Dickens House Bed and Breakfast at 335 8th Ave NE St. Petersburg, works in the kitchen. He bought the 1912 Arts and Crafts home in 1995, restored it and had his business for many years.  Bed and breakfasts around St. Pete are closing down because of competition from AirBnB. Dickens House is closing as soon as the house sells.
[LARA CERRI   |   Times]
Ed Caldwell, owner of the Dickens House Bed and Breakfast at 335 8th Ave NE St. Petersburg, works in the kitchen. He bought the 1912 Arts and Crafts home in 1995, restored it and had his business for many years. Bed and breakfasts around St. Pete are closing down because of competition from AirBnB. Dickens House is closing as soon as the house sells.
[LARA CERRI | Times]
Published Apr. 22, 2017

ST. PETERSBURG — Mornings at the Dickens House revolve around a large, tiger oak table. Guests at the St. Petersburg bed and breakfast plop down around it each morning to nibble on fresh fruit and pastries before innkeeper Ed Caldwell sets down a plate of egg-white frittata or blueberry pancakes. He had the table custom made for the inn, round because the shape is "better for conversations."

But over the last couple years, the table has been notably less full. And soon, there will be no more paying guests around it. That's because Dickens House is up for sale. Nearby, two other bed and breakfasts have already closed and another is about to join the Dickens House on the sales block.

The mom-and-pop operations in the Old Northeast neighborhood blame competition from Airbnb in the area — and a lack of enforcement by local and state governments — for pushing them out.

"I've been supporting my city, county and state for 17 years," Caldwell said, "and I've been stabbed in the back and kicked to the curb."

Beach Drive Inn, another bed and breakfast in the Old Northeast, will go up for sale soon. Larelle House, just around the corner, shuttered in January after more than 12 years. Sunset Bay Inn is closed. The only remaining licensed bed and breakfasts in the area will be the Watergarden Inn at the Bay and Mansion Inn.

The closures, owners say, are a symptom of the slow creep of short term rentals into the downtown area. Currently, it is illegal in St. Petersburg to rent a dwelling more than three times per year for less than 30 days at a time in an area zoned for housing, or to advertise for such.

But an online search to rent an Airbnb room in the 33701 zip code turns up more than a dozen listings, some for as low as $45 per night. Licensed bed and breakfasts in the area charge more than $100 for a night.

"There's no way you can compete," Roland Martino, owner of Beach Drive Inn, said.

Licensed bed and breakfasts charge more because their operating costs are much higher. Bed and breakfasts must comply with fire codes and health codes, among others, for their space. That means upgrading to an indoor alarm and sprinkler system and commercial kitchen items, as well as taking food safety courses for the breakfast aspect. They also pay for a license. That all costs money — money that people who rent out their homes or a room through Airbnb don't need to pay.

"It was frustrating dealing with people that didn't have to go through all the regulations and regulatory hoops that we had to and (incur) the costs involved," Larry Nist, who ran Larelle House with his wife Ellen, said.

For them, Airbnb competition "wasn't an overriding factor" in closing, but it still affected their business toward the end.

Dickens House, Larelle House and Beach Drive Inn all experienced a dip in revenue and occupancy in recent years. At a time when tourism in Pinellas County is up — 6,349,500 overnight visitors in 2016, up almost 3 percent from 2015 and an all-time high — bed and breakfasts weren't seeing a similar uptick in business.

For Caldwell at Dickens House, his rooms were filled 79 percent of the time last March. This March, he's down to almost 50 percent. When asked when his heyday was, Caldwell said he's "not sure I ever had it."

"Now that business is good (in the city)," he said, "Airbnb is coming in and sucking it off."

Airbnb would not specifically address complaints and allegations made by bed and breakfast operators. In a statement emailed to the Times, Benjamin Breit, an Airbnb spokesperson, said Airbnb hosts "offer affordable and alternative experience to traditional hospitality options… We will continue to utilize our platform to support Pinellas County merchants and small businesses, including B&B's."

Bed and breakfasts nationwide are struggling to compete with Airbnb. Troy Flanagan, vice president of state and local government affairs for the American Hotel & Lodging Association, said that while he didn't have data on closures specifically, he sees a trend of bed and breakfasts losing business or going out of business because of the unregulated competition.

"From what we've seen they're one of the more exposed segments of the lodging industry to unchecked competition," he said.

But not everyone in the hotel industry sees Airbnb as the villain. To some, it's more of an opportunity.

Patricia Detwiler, executive director of industry group Bed and Breakfast Inns Association, concurs a fair amount of the statewide decline in bed and breakfasts is tied to short term rental sites like Airbnb. But she doesn't consider Airbnb the threat, and even encourages bed and breakfasts to use the company as a marketing tool.

Rather, it's the lack of licensing enforcement that is forcing small bed and breakfasts to close and putting consumers at risk.

"It's not about shutting down Airbnb," she said. "It's about leveling the playing field for legitimate businesses."

Then who's to blame? Homeshare sites should shoulder a fair amount, the bed and breakfast owners said, but it isn't alone. Beach Drive Inn's Martino pointed to another culprit: "I blame some level of government," he said.

The state doesn't regulate Airbnb directly, but it does require a license for any vacation rentals that are a "whole unit" — an entire apartment, condo or house for example — and rent for 30 days or less more than three times per year. Anything less than a full unit, such as a room, doesn't need a license.

It's currently up to local governments to decide whether or not short-term renting in residentially-zoned areas is legal and to police for any violators.

Robert Gerdes, director of codes compliance assistance for St. Petersburg, said the city relies largely on citizen complaints for policing. Violations can incur a lien on a property or up to $500 per incident.

Since Jan. 1, 2016, the city found 77 violations of short-term rentals. While he didn't have exact numbers, he said "most often," violations of this sort include evidence from a short-term rental site.

But enforcing this is fairly difficult.

Part of the challenge is pinpointing which homes are listed on Airbnb. The company does not reveal addresses until a customer books a room. Instead, it gives a three- or four-block radius around the listing to give a general sense of where it is.

A few years ago, several licensed bed and breakfasts banded together to submit a list of around 100 Airbnb listings in the 3301 zip code to the city's code enforcement division. Bed and breakfast owners said the city visited each and asked them to stop, but the listings inevitably cropped up again. Gerdes wasn't able to confirm this specifically.

"It's not supposed to be our job to do code enforcement's work," Caldwell said. In a stinging move, one Airbnb opened up in the house right behind his.

"I look at it every day," Caldwell said. "It doesn't feel very damn good."

For any major changes to happen, the owners said, local governments need to retain power to decide whether short term rentals are allowed to operate as they have been, and enforce it. Two similar bills currently making their way through the state Senate — SB 188 — and House — HB 145 — would strip local government of that ability, affecting Airbnb and similar sites operating in those areas.

Bed and breakfasts have been a fixture of Florida tourism for a century, as much a part of the state's culture as juicy oranges and sandy beaches. But largely unregulated competition could change that.

For now, the licensed bed and breakfast scene in the Old Northeast will be quiet. Larelle House's Nist and Dickens House's Caldwell are retiring. Martino isn't sure what he'll do after selling the Beach Drive Inn.

Nist remains optimistic about the long-term future of the industry. "There will always be a niche for actual bed and breakfasts," he said.

Martino and Caldwell aren't so sure.

Contact Malena Carollo at mcarollo@tampabay.com. Follow @malenacarollo.

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