Airbnb boom: Traverse City ranks No. 2 in the state for the service

By Erin Sloan for Traverse City Record Eagle 

TRAVERSE CITY — Airbnb rentals in Traverse City nearly doubled in both guests and host income during 2017.

Traverse City Airbnbs hosted 29,300 guests this year and hosts netted $4.38 million in income, making it the No. 2 overall Airbnb destination in Michigan, according to a release from the company. In 2016, local Airbnbs hosted 15,000 guests who paid about $2.6 million by booking rooms with the service.

Traverse City Airbnb rentals were the top in the state during the summer, said Ben Breit, the Midwest spokesperson for the company.

“That speaks for itself — you’ve got amazing lakefronts and it’s a summer destination,” he said. “People visit Traverse City throughout the year but during the summer is when it peaks on our platform.”

Breit attributes the increased volume of visitors to those who want to experience cities like Traverse City, Detroit or Ann Arbor in new ways — people who don’t want to be confined to the hotel district.

“During those high-volume summer months, hotels can be difficult to find or they’re much pricier,” he said. “Airbnb offers an expanded capacity in cities like Traverse City that could end up being more valuable to the community — people are coming to relax and spend money, and that’s going into local homeowners’ pockets, businesses and restaurants.”

Joni Robb, owner of the Cozy Cottage in Long Lake Township, said despite the boom of Airbnb hosts in the region, she continues to keep her rental occupied and was able to raise her rates.

“I’m still always booked,” she said. “I hope to do it as long as I can — it’s my only source of income. I’m retired and get Social Security, which is not much, but this has made me able to maintain and stay in my home.”

Robb rents out the Cozy Cottage using both Airbnb and VRBO, Vacation Rental by Owner. She said Long Lake Township has been “permissive” of the service, but also strict with regulations for the rentals.

Traverse City and other nearby townships and villages have played host to ongoing debates about regulating short-term rentals in the face of increasing affordable housing issues in the region.

Barb Rischel, owner of the Wellington Inn bed and breakfast in Traverse City, said the short-term rental service is negatively affecting her business, which she opened in 2003. Occupancy at the inn has dropped the past few years since Airbnb started and also took a hit last summer.

The Wellington Inn is part of the Michigan Bed and Breakfast Association, which inspects the inn “rigorously,” and Rischel points out that Airbnbs are not as regulated.

“I don’t know what the answer is, but it seems they need to be regulated more,” she said. “You can’t believe all the things we have to do for safety.”

Trevor Tkach, executive director for Traverse City Tourism, echoed Rischel’s concerns for the service impacting bed and breakfasts and hoteliers. He also pointed to the platform’s impact on the local tourism industry as Airbnb rentals don’t contribute to room assessment fees, which are used by TC Tourism to advertise for the region.

“We don’t reap the benefit of what otherwise would be an assessed room,” Tkach said. “It begs the question that’s ongoing at the state and municipality levels — are there proper regulations in place regarding these types of rentals?”

Robb addressed some issues as changes in the economy and said that as long as Airbnb hosts comply with regulations, they’re not going away any time soon.

“I’m so grateful I live in this community and I’m willing to pay a little bit for advertising and I don’t think most of the Airbnb folks would object,” she said. “In fact, I think we’re riding on the coattails of the hotels right now and maybe we should be helping out the advertising for the Grand Traverse region.

“I can see where people would be concerned but I think we do need some constraints.”

Airbnb now collects and remits to the state taxes made from bookings on the site because of changes enacted earlier this year.

Nearly 6,000 Michigan Airbnb sites hosted 364,000 guests in 2017, collecting $48 million in revenue. Other nearby cities that ranked high on the list include:

City Total Guests Host Income

Traverse City 29,300 $4.38M

Bellaire 5,200 $536,200

Frankfort 2,550 $319,650

Suttons Bay 2,500 $516,900

Interlochen 2,300 $300,000