Airbnb says its will reach $2 billion in tourist and occupancy taxes remitted by end of 2019

Airbnb says its will reach $2 billion in tourist and occupancy taxes remitted by end of 2019
By: WNG CNBC Posted On: December 12, 2019 View: 39

Airbnb says its will reach $2 billion in tourist and occupancy taxes remitted by end of 2019

Airbnb CEO Brian Chesky at The New York Times Dealbook event on November 6, 2019.

Credit: Mike Cohen/ The New York Times

Airbnb said on Thursday that its tourist and occupancy taxes remitted will reach $2 billion by year-end. The company has also resolved the "majority" of its outstanding litigation in U.S. cities, including Boston and Miami Beach.

The home-sharing company, which is gearing up for a 2020 stock market debut, is indicating that it's put proper measures in place to collect taxes and work with local governments. Airbnb said 72% of bookings made in the U.S. are covered by collection and tourism or hotel taxes.

But compliance with strict regulations could dent Airbnb's business model, especially as cities around the world look to establish laws around vacation rentals. In Boston, for example, Airbnb removed thousands of listings in order to comply with new regulations.

Airbnb says regulatory certainty helps grow the business. After implementing new rules in San Francisco in January 2018, the company removed nearly 5,000 listings. One year later, Airbnb says the number of listings in the city had increased by 22%.

Prospective investors may be looking for more evidence that the company's business can grow amid a heightened regulatory environment. Airbnb is facing scrutiny from an increasing number of cities that are looking at how home-sharing impacts housing prices and long-term residents.

The sharing economy model hasn't been a hit with public market investors. Uber and Lyft have struggled since their IPOs earlier this year and WeWork had to withdraw its filing and seek emergency financing from SoftBank. Airbnb has said it was profitable on an adjusted basis in 2017 and 2018.

Correction: A previous version of this story incorrectly stated that the $2 billion in taxes was for 2019.

WATCH: Airbnb exec out ahead of company's 2020 IPO

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