As Airbnb Inc. turns its attention to Latin America, the often-combative company is taking an unusual approach. It's giving local governments what they want.
The home and apartment-rental company said it will collect and remit taxes in Mexico City, the first such arrangement in Latin America. Airbnb will provide 3 percent of revenue generated from bookings in Mexico City to the city's government. Hotels there also pay a 3 percent lodging tax to local officials. Airbnb said it intends to replicate the tax model throughout the region.
Latin America is now Airbnb's fastest-growing market, surpassing Japan. The company has 250,000 properties listed in the region, which encompasses Mexico, South America and parts of the Caribbean, including Cuba. Airbnb said bookings in Latin America have increased 148% in the past year. The privately held company declined to disclose revenue.
Airbnb is taking a cordial tact with officials in advance of major conflicts. While it has agreed to report taxes on behalf of its hosts in New York City, San Francisco and other cities, the company only did so after long, drawn-out battles with officials, sometimes in court. This month, Airbnb settled a lawsuit with San Francisco and agreed to register New York hosts in a state database. But the company continues to fight officials in Barcelona, Miami, Southern California and elsewhere on housing-related issues.
Chris Lehane, the head of policy for Airbnb, said the company plans to take a friendly approach throughout Latin America. It's currently discussing agreements similar to the one in Mexico City with the governments of Buenos Aires and Sao Paulo. "This is just the beginning," he said. "We're prepared to be flexible and experiment."
Airbnb has big plans for Latin America. It expects to double staff there by the end of the year and open offices in Argentina, Brazil and Mexico. Headcount will likely quadruple to 120 people within the next two years, Airbnb said.Read the full article, written by Olivia Zaleski from Bloomberg, on skift.com.