Paris (CNSNews.com) – French hoteliers and the mayor of Paris are condemning the International Olympic Committee’s signing of a nine-year sponsor deal with Airbnb, saying it will unfairly benefit at the expense of traditional accommodation companies and the city’s revenue coffers.
Under Mayor Anne Hidalgo’s leadership, Paris won the hosting rights for the 2024 summer Olympics, and the largest French hotel organization, UMIH, is furious about the deal that the IOC signed in London last week with San Francisco-based Airbnb.
Meeting in the southern city of Biarritz, UMIH threatened to pull out of the 2024 Games if the deal goes ahead. (More than 600 hotels in Paris and surrounding cities have been selected to accommodate national sports teams and delegations, as well as media representatives.)
French hoteliers have long resented the fact that Airbnb – which takes a percentage for each accommodation booking made on its platform – pays less tax that they do.
UMIH said it wants the Paris 2024 organizing committee chairman, Tony Estanguet, to impose the same accommodations rules for everyone during the Games. It said in a statement there were sufficient hotel facilities of the highest standard in Paris and across France to welcome tourists from around the world, and Airbnb accommodations were not needed.
In a bid to allay the furor, Estanguet said in a letter to UMIH president Roland Héguy that the organizing committee had made a choice, ever since it first bid for the hosting rights, “to rely on the incredible hotel infrastructure of the capital.”
Their planned collaboration for the games has not changed, he said, noting that it was the IOC that signed the deal with Airbnb, not the Paris organizers.
Estanguet proposed a meeting soon to talk about how to work together, adding, “Your involvement will be decisive in the success of the Paris Games.”
Estanguet has himself come under fire.
“Although you had nothing to do with this deal, as you defend the values of sport, its fairness, honesty and respect for the rules, how can you not go onto the frontline and defend us?” Association for Professional Accommodation and Tourism president Serge Cachan asked in an open letter to the Paris organizing chief.
“How can you not do something when you see that a competitor, who refuses to comply with the same tax and regulatory laws, is automatically qualified?”
Hidalgo, who is launching her campaign for municipal elections next March, sent a letter to IOC president Thomas Bach, warning him against the deal.
If re-elected, she said, she would organize a referendum on the issue, and on whether Airbnb should be obliged to follow rules on accommodation in Paris.
“It is clear that in Paris, we expect Airbnb to respect the law on the number of nights per year that an owner can rent his property (currently set at 120 per year maximum) and the unique registration number, which is not the case today,” she said.
The “unique registration number” is one that accommodation owners must obtain from the City of Paris and must appear on their ads. It allows for owners’ names and accommodation addresses to be identified for tax purposes as required by law.
For its part, Airbnb does not make it mandatory in its ads, which makes it difficult for authorities to identify the location of properties and tax them.
The deal with the IOC is a major one for Airbnb, boosting its image at a time when it faces various controversies.
Reportedly worth $500 million, it will cover not just the Paris Games but the winter Games in Beijing in 2022 and Milan in 2026, as well as the summer Games in Tokyo next year and in Los Angeles in 2028.
As with other non-European tech companies, Airbnb is only taxed in France for promotion and marketing services and employee costs. Income is declared in Ireland where taxes are among the lowest in Europe. In 2018, Airbnb paid just $163,000 in taxes in France.
In February, Hidalgo sued Airbnb for $13.7 million, for putting 1,000 unregistered properties in Paris on its platform.
But she lost the lawsuit, after judges ruled that Airbnb France’s sole purpose was to provide marketing and communication services to its parent company, Airbnb Ireland, and that it does not therefore manage the platform.
France is Airbnb’s second largest country after the United States, with a total of 600,000 properties advertised, 65,000 of which are in Paris.