Hotel groups are calling on Saskatoon city councillors to create a level playing field when it comes to competing against so-called "ghost hotels."

The City of Saskatoon is gathering feedback on plans to regulate short-term accommodation offered by companies such as Airbnb for the first time.

On Tuesday, councillors on the planning and development committee heard from the public about homestays — in which guests stay in hosts' homes — and short-term rental properties. Any changes will have to go to city council for a final decision at a later date.

Jim Bence, president and CEO of the Saskatchewan Hotel and Hospitality Association, said his group is concerned about short-term rentals that have evolved into large-scale commercial enterprises he calls ghost hotels.

"Savvy operators are turning home sharing into a new class of investment," Bence said. "[They're] converting residential units into ghost hotels, avoiding the normal costs of doing business and creating additional demands on municipal resources like police, waste removal and bylaw enforcement."

"Purchasing multiple homes or condominiums or renting out on a nightly basis is not home sharing. It's a business," he added.

Different taxing levels

Bence added that it's unfair for such operators to pay municipal as opposed to commercial property taxes.

Mayor Charlie Clark said "there's a difference between commercial property tax rates and municipal [ones]. That's one of the areas where I think there's a bit of an unlevel playing field."

Jaret Waddell, the president and CEO of Globex Management Corp., a recently formed hotel management company, said ghost hotels have an unfair advantage.

He pointed to a hotel owner in Regina who lost two contracts to house work crews in 2019 which went to "two commercial operators of Airbnbs" instead.

"What's hard to stomach when you are a hotel owner-operator is when you begin to lose traditional business and, in growing magnitude, to people that play by different rules."

'It's filling a niche'

Coun. Hilary Gough asked city officials if they'd considered ways to limit large-scale rentals.

Mark Wilson, a city licensing and permitting manager, said the number of rental units per owner won't be capped, but that owners would need to get a business licence for each one.

Wilson added that the new rules would limit the number of guests staying in a single dwelling to six at any given time.

Proposed regulations on the maximum number of guests allowed in homestays and short-term rentals in Saskatoon. (City of Saskatoon)

Councillors also heard from people who operate short-term rentals including Katherine Soule Blaser who converted her Caswell Hill home last summer. She now lives six doors down.

Since June, Soule Blaser has rented out it to 34 guest groups although she does not have a business licence.

"Denying any type of it would be a mistake because I believe it's filling a niche," she said of the three options laid out by the city.

One options would allow only homestays in the city, banning other short-term rentals.

'Consumers should have freedom to choose'

Geri Fernet, the president of Strata Development, a construction firm in Saskatoon, said she would prefer a ban because short-term renters are more likely to cause damage than regular renters.

Veronica Kilpatrick said consumers should have the freedom to choose between hotels and short-term accommodations such as Airbnb. (Guy Quenneville/CBC)

Veronica Kilpatrick, who described herself as a property owner in Saskatoon, disagreed.

"[Short-term rentals] are managed by the host. The property must be in good condition to obtain high positive reviews," Kilpatrick said, adding that consumers need more choice.

"I believe that consumers should have freedom to choose in our city between restaurants and Skip the Dishes, between taking a taxicab or Uber, between Airbnb or a hotel."

Next steps

Clark has asked the city to provide more information including municipal costs associated with hotels and motels compared to short-term accommodation "in the rental property of a host."

Clark also asked the city to report back on areas of public concern not covered by the proposed regulations.