Facts you didn’t know about Airbnb in Mississauga
While Mississauga has been cautious when it comes to adopting some new policies (it was slow to legalize ridesharing services and has yet to allow private cannabis retailers to operate in the city, for example), it has made room for disruptive industries—and is now benefitting financially from one in particular.
As anyone who travels knows, traditional accommodations such as hotels, motels and bed and breakfasts have been affected by the rise of short-term accommodation platform Airbnb--a company that allows private citizens from around the world to rent their homes to tourists temporarily.
While some companies and organizations have fought disruptors such as Airbnb and Uber, others have found a way to make them work in their favour--including the City of Mississauga.
"Our one-year tax remittance to Mississauga is $497,000," says Alex Dagg, director of public policy for Canada, Airbnb.
"We're seeing growth," she says, adding that Airbnb collected the money to be remitted to Mississauga between Oct. 1, 2018, and Sept. 30, 2019.
"We're excited to see those kinds of numbers coming in," she says.
So, how did Mississauga manage to make close to half a million dollars off of Airbnb?
In 2018, the city implemented a four per cent Municipal Accommodation Tax (better known as a MAT or “hotel tax”). The new tax is the result of Bill 127, which was passed by the previous provincial government. The bill allows municipalities to charge a transient accommodations tax, which a hotel or other short-term accommodation facility will pass onto a guest and then remit to the city.
“This new revenue tool is an opportunity for the City of Mississauga to generate important funds that will be reinvested in an accountable, transparent and dedicated way toward undertaking important city-building initiatives to grow and diversify our local economy, strengthen our tourism industry and showcase our many celebrated attractions, festivals, heritage, culture and businesses,” Mayor Bonnie Crombie said in a statement that was released in 2018.
On Oct. 1, 2018, the city extended the tax to apply to short-term rental services such as Airbnb.
And so far, the results have been positive.
"We're continuing to see growth on our platform, and this included the summer season when people were coming to visit friends and family. That's the kind of activity we're seeing in Mississauga," says Dagg.
While people might not think of Mississauga as a hotspot for travellers, Dagg says that people frequently travel to the city to visit friends and family and look for accommodations nearby.
"We see a lot of friends and family [using the service in Mississauga]. These days, people don't have extra space in their homes, so they'll book an Airbnb on their street or a block away, and that's a lovely way to spend time with family. The [guests] have their own kitchen or their own bathroom."
Dagg says there are currently about 1,600 active Airbnb listings in Mississauga.
She says a typical listing hosts guests about 98 nights a year, and that about 61,000 people come to Mississauga to use Airbnb.
The relationship between the city and Airbnb began last year when Airbnb signed an agreement with Mississauga that allows the platform to collect the tax on the city’s behalf.
“This takes the burden off of the individual [who is listing their home on Airbnb]. Mississauga was great to deal with, and we agreed to do all the collection, and we handle all the administrative work," she told insauga.com in the spring.
"So if you book an Airbnb in Mississauga and it costs $100 a night, it will now cost $104. We collect the money and remit it to Mississauga every quarter.”
Mississauga is not the only city with this kind of partnership with Airbnb, but it was an early adopter.
In Ontario, Airbnb collects MATs in Ottawa and smaller communities such as Sudbury, Cornwall, Windsor and Barrie.
"We're paying tax and collecting tax in a number of municipalities. Generally, we know it's substantial funds and it's a new revenue source that Mississauga didn't have before. It's something any municipality can use," she says.
"We're [growing in popularity] everywhere. People are seeing that this is a great way to travel.
Dagg says that the service also keeps residents in the city, as people will even book a local Airbnb while their house is being renovated.
"In lots of cases, it's visitors using the service, but it's Mississauga residents as well."
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