SEELEY LAKE - Dagny Krigbaum has been responsible for taking care of her family's cabin in Seeley Lake for more than 20 years.
In the past, she enlisted property management companies to rent out the cabin and assist her in taking care of it while she lived in Missoula. The companies never had much success and the few renters the cabin did have never stayed for very long and always seemed to leave a mess in the wake of their stay.
About three years ago, Krigbaum decided to advertise her family's cabin on Airbnb, a website and app that connects a host with an empty home with someone looking for a place to stay.
Now, her family's property doesn't sit empty for a majority of the year and the problems caused by long-term renters are no longer an issue. However, several resort owners in the area have blamed a decline in business on private rental services, which highlights both the limited amount of lodging in the area as well as the fragility of a tourism-dependent economy.
Krigbaum's cabin requires guests to stay a minimum of two nights. Typically in the summer season, people stay longer, anywhere from four up to seven days. With lodging taxes and a cleaning fee included, guests at the cabin would spend about $413 dollars for a two-night stay.
This is comparable to the pricing for cabins at the Tamaracks Resort, also located in Seeley Lake, with the only difference being a minimum stay of four nights. However, according to Tamaracks Resort owner Jessica Kimmel, traditional resorts incur other costs that don't apply to private vacation rentals, making it difficult for them to compete.
Krigbaum pays a woman from Seeley Lake to clean and take care of the home after each guest leaves, which she sees as one way hosting a rental can contribute to the Seeley Lake economy.
"We pay our cleaner $15 hourly plus tips for each cleaning; plus a bonus here and there, depending on how busy the place is booked," Krigbaum said. "Our cleaner used to have a part-time job in Missoula for under 10 bucks an hour and has been able to drop it, which saves her time, gas, etc..."
One thing Kimmel can't compete with is those wages.
"I cannot pay $12.50 to $15 an hour, I have too many employees," Kimmel said. "I have to pay workers' comp, I also have to pay unemployment and social security, and I don't know if they do. But I don't understand how they can afford to pay so much to someone to come in and clean."
But the cost of operating a resort is also affected by government regulations. The Missoula County Health Department licenses Kimmel's business according to its ability to meet standards in cleanliness and safety. At this time, there's no way to license or regulate private rentals in this manner.
"At my property, [the health department] can stop by at any time, without warning and walk through my laundry room, walk through any of my cabins that are open and available," Kimmel said. "They cannot do that with VRBOs or Airbnbs."
As is the case with many internet startup companies, regulations for vacation rental services have been slow to fall into place as their popularity rises.
As recently as June 1, Airbnb began collecting lodging taxes paid by guests in Montana and remitting them to the state on behalf of the Airbnb host. This doesn't mean that Airbnb rentals are or were ever taxed differently than more traditional lodging, it simply means that it's no longer up to the host to pay those taxes as an individual.
The new policy will make sure the state receives payment from every host, every time.
"Sometimes we see that hosts don't even realize they're supposed to pay this and because sometimes the laws are written for traditional hospitality providers, they aren't very clear," said Airbnb Spokesperson Laura Rillos.
According to Rillos, the new process starts when a guest books an Airbnb. The booking fee, cleaning fee and taxes are all paid by the guest directly to Airbnb and the company then puts the booking fee and cleaning fee in the account of the Airbnb host, keeping the amount of the 7 percent lodging tax. The company then gives the taxes it has collected from guests to the state of Montana.
This isn't the only tax that vacation rental hosts pay. Any income made through a rental service like Airbnb must be reported to the IRS if the owner rents the home out for more than 14 days per year. The average number of nights an Airbnb is rented out in Seeley Lake is 22. For Krigbaum, it's far higher, at about 140 nights for this year.
For resort owners like Kimmel, private vacation rentals aren't always a negative presence. In the summer months, if Kimmel's rooms are all booked, she often will refer guests to private rentals.
"We understand that there's a serious lack of lodging in the Seeley Lake area," she said. "We're constantly referring guests to private rentals if we're booked. We want people to come stay in Seeley."
In 2017, Airbnb rentals in Montana generated $69,278,568 dollars of revenue. If all hosts complied with tax law, as this was before the new tax policy was in place, 7 percent of this revenue would total over $400,000 would be paid in state lodging tax.
There were more than 520 guest arrivals through Airbnb to Seeley Lake in 2017. According to the company, 42 percent of Airbnb guest spending occurs in the neighborhood in which a guest stays. In a town like Seeley Lake, where stores and restaurants are more concentrated, this number could be even higher.
Krigbaum sees the shift away from traditional lodging, like hotels, to experiences that offer amenities like a kitchen and a green space as part of a larger movement of tourists' desire for a more personal experience.
She sees visitors to Seeley Lake as part of several different archetypes. The first is a group who will rent out the cabin for a wedding, reunion or other event, while some other people stay in other lodging in the area and use the cabin as a "homebase" where they can gather.
"Another type of guest is coming to Seeley to experience Montana, and many have never been to Montana before," Krigbaum said. "This type of guest definitely needs an Airbnb-type experience if you want to see them return to Seeley in the future."
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