Online room-sharing sites create boarders without borders

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Teri Ross has been getting compliments on the guest room in her Minnetonka, Minn., townhouse for years — only now, they're coming from people she's never met before.

Ross is part of a growing network of homeowners who have discovered their inner innkeeper, using websites to market rooms in their homes to travelers much like a bed-and-breakfast.

The online vehicles include VRBO, FlipKey and the behemoth of the bunch, Airbnb. The business was founded six years ago by two young roommates who made their rent by charging people to sleep on air mattresses in their San Francisco loft and now boasts 600,000 listings in private homes in 34,000 cities worldwide.

Airbnb announced in March that it will locate a hub in Portland's Old Town. The site will be the operational headquarters for North America, overseeing service for customers across the continent. The company has a similar office in Dublin overseeing European operations, according to The Oregonian.

Taking in boarders is nothing new, but offering space in your home to travelers, not just in tourist hot spots like New York or San Francisco, is a more recent phenomenon. It's another twist on the "sharing economy," in which people rent out something they're not using to somebody looking for a unique experience or a bargain. Other examples are DogVacay, which connects pet owners with pet sitters, and Lyft, a car-sharing business in which regular people use their own vehicles to chauffeur passengers.

Airbnb also has come under scrutiny in some cities, such as New York, where some hosts have illegally sublet apartments they don't own but merely rent. Hotel and B&B operators in Grand Rapids, Mich., unsuccessfully sought a ban of Airbnb and other services like it last year.

Ross said her neighbors in Minnetonka haven't objected, and in fact, have told her they're interested in doing it, too.

Ross signed up as an Airbnb host the day after seeing a story about the service on "Nightline" and booked her first guest five days later. "I was shocked that it happened so soon," she said.

The recession saw more people renting out parts of their homes to make ends meet, but Ross and other Airbnb hosts say they're not driven by economic necessity. Ross says she uses the money to take ski trips around the country. Maria Verven, who runs a public relations firm out of her Golden Valley, Minn., home, says she has used her Airbnb earnings to help finance the startup of a second business.

Herb Tousley, director of the Shenehon Center for Real Estate at the University of St. Thomas, believes the economy has recovered sufficiently so that people now are renting out rooms mostly for supplemental income. "The people who were doing it as a necessity either muddled through or lost their homes," he said.

Tousley also doesn't believe services such as Airbnb could put much of a dent in the hotel and motel business. A recent Boston University study found that for every 1 percent increase in Airbnb's market, traditional hotel revenue slips 0.05 percent.

"There's not a huge market for this. It takes a certain kind of person who would want to do that, stay in someone else's home. Most people want something that's more conventional, with fewer uncertainties. But there's definitely a niche for it," Tousley said.

Like other Airbnb hosts, Steve Snider of Lakeville, Minn., said he enjoys meeting new people. Snider also has stayed in Airbnb-listed homes when traveling, signing up as a host to get a discount on a room he had booked in New York.

"I figured nobody's ever going to come to Lakeville," Snider said. He didn't even bother telling his wife he had signed up and was surprised a couple of months later when he started getting inquiries.

"I've learned that there are quite a few people interested in coming to Lakeville," Snider said. He's had guests from France, India and Germany and several people visiting Carleton and St. Olaf colleges.

Snider believes he has been an advocate for Lakeville's business community by directing guests to local shops and restaurants. After discovering that a couple of guests enjoyed playing musical instruments in her home, Verven recommended places where they could hear live music. "You play host but also concierge, helping people with the ins and outs of how to enjoy the Twin Cities area," she said.

Travelers find properties on Airbnb's website by plugging in a destination city. Listings don't give street addresses but have location descriptions and photos. Once a reservation is made, Airbnb takes its cut by charging a fee to both the host and guest.

Airbnb's security measures include having guests and hosts verify identities by connecting to their social networks, scanning official IDs such as driver's licenses or confirming other personal details. The website allows guests and hosts to review each other.

Airbnb also lets hosts decline a reservation request. Ross said she does that if it conflicts with her work or travel schedule or she doesn't feel comfortable with a request.