With the 10% transient room tax in Owensboro City limits set to go into effect in January, renters will soon see higher prices when booking short stays at Airbnbs and VRBOs. That’s causing some hosts to re-evaluate how they approach short-term rentals.
The tax previously only applied to hotels and motels, but new language added lumped in entities such as Airbnbs and VRBOs. After the Kentucky legislature amended state law to clarify rental entities were subject to room taxes, Daviess County Fiscal Court amended its local ordinance to say such entities were covered by the County’s 6% transient room tax. City Commissioners later approved raising that rate to 10% for such rental properties within city limits.
Shanna McGinnis, the owner of the rental company Blue Bridge Homes, manages two properties in Owensboro and two more outside Louisville. She said the service Airbnbs provide is not identical to that of hotels and is more similar to bed-and-breakfasts.
“If there was an incident where a guest had to be moved off the property, we don’t have 99 other rooms that we can put them in. Some hosts don’t even have another house,” she said. “I mean, there are definitely some similarities there, but there are some pretty significant differences as well.”
McGinnis added that the winter tends to be a slower period already, so moving into their lull of tourism, she has to market longer-term stays — meaning over 30 days.
Kevin and Joy Whear, owners of Stay Owensboro, said that before a meeting with Visit Owensboro and analytics company AirDNA, they hadn’t heard about the change in language to the transient room tax.
“We’re not a big hotel corporation; we’re mom and dad, and our purpose for doing this is not solely to make money. It goes farther than that, and it is just disappointing,” Joy said.
The Whears said they have a small business license, already pay taxes to the government, and have done everything “by the books.” So, the two of them are not seeing many positive takeaways from the 10% tax.
The Whears own five properties for Airbnb and VRBO, all within City limits.
On the bright side, the rental property owners will receive help keeping all their rooms booked from Visit Owensboro. The visitor’s bureau benefits from each stay because they receive a small percentage of the funds from the transient room tax.
Visit Owensboro President/CEO Mark Calitri said they will promote the Airbnbs and other entities as options to stay on the official tourism website.
“The short-term rentals will benefit from all that sales activity that’s attracting out-of-town people. The more activities and events we create, the more we can draw business to those short-term rentals,” Calitri said.
Calitri said the city had seen 100% growth over the last few years in property owners, and the CVB is hoping that by showcasing the properties, they can continue that development.
