Connor, 26, is among a growing number of people taking
advantage of a surge in the number of homeowners offering to
rent out a room for a night or longer, with the cash a welcome
addition to recession-squeezed budgets.

This new wave of hospitality sweeping the travel industry
was sparked by the success of “couch surfing”, where people
could go online to book a free bed in a home, and is being led
by a blitz of new websites that let tourists bypass resorts and
hotels.

“A lot of the time you find yourself with a host who is more
than happy to point you in the direction of a few local hot
spots that you otherwise would have missed entirely,” Connor
told Reuters.

But the increasing popularity of peer-to-peer rentals has
lawmakers on the alert in some countries, scrutinising tax,
health and safety, and rental infringements.

Martin Buck, a director at ITB, the world’s largest travel
fair, said the popularity of homestays was fueled by websites
like Airbnb, Wimdu, 9flats, and HouseTrip, where users post
listings for short-term rentals of all or part of their home.

Listings on Airbnb, the biggest site, have surged to about
300,000 in 192 countries from 10,000 in late 2009, with the
website taking a cut on all bookings. The listings include
everything from New York apartments to Costa Rican tree houses.

But Buck said unregulated homestay sites and concerns that
these were actually illegal hotels was a hot topic in many
places including Berlin, the headquarters of Wimdu and 9flats.

“There is talk in some areas of Berlin of prohibiting it,”
he told Reuters. “But can you really prevent people from using
their privately owned homes as they want? It raises a whole lot
of constitutional and human rights questions.”

HOME OR ILLEGAL HOTEL?

Renting out a room is legal in London, up to a level.

The British government’s “Rent a Room Scheme” allows
householders to earn 4,250 pounds($6,400) a year tax-free from
letting furnished accommodation.

For the past year, Peter Tompkins has charged about 700
pounds ($1,100) a week to rent a spare bedroom in his apartment
in the clock tower above London’s St Pancras train station from
where views stretch to St Paul’s Cathedral.

Tompkins said he uses Airbnb to rent the room, reassured by
the company’s 600,000 pound insurance guarantee to hosts, as
well as a 24-hour support line. He said it was important to have
a professional relationship with guests akin to a hotel.

“I think you ought to behave as a hotel or regulated
organisation would, but I am conscious that there’s no
regulation on me. I just try and behave well,” he told Reuters.

The growing popularity of Airbnb, which has processed around
five million paid overnight stays since 2008, is starting to
cause friction with some lawmakers.

According to Inc., a U.S.-based magazine focused on growing
private companies, Airbnb made around $100 million in 2012, with
the estimate based on the site’s six to 12 percent commission on
each room booked.

Wimdu is Airbnb’s next-biggest competitor with 150,000
properties on its books since it began in 2011. It would not
divulge its revenues. Rival 9flats has 90,000 properties.

Airbnb, set up in 2008, maintains the law needs to
distinguish between people who occasionally rent out rooms and
landlords who illegally run residential buildings as hotels.

Airbnb is currently lobbying authorities in Washington, DC,
for a review on rental laws in the United States, seeking to
craft a model for cities across the world to follow.

Company spokesperson Christopher Lukezic said he understood
this movement was “growing within unchartered waters” as in the
previous homestay trend, couch surfing, no money changed hands.

“Our typical host is a regular resident, who, on average, is
only renting out their home for a few weeks a year, helping them
to make ends meet,” Lukezic told Reuters.

“Not only does it help increase the number of tourists who
can afford to visit a city but it also creates economic
prosperity for the citizens of the city who are hosts, often in
parts of the cities where there are no hotels.”

While lawmakers are raising concerns about the home-stay
trend, the travel industry is unperturbed as it does not expect
to see any profit squeeze on hotels.

Robin Chadha, chief marketing officer of CitizenM, a Dutch
boutique hotel group with a growing portfolio across Europe,
said services like Airbnb have made city trips more affordable
for longer stays and family groups.

“But hotels will always be safer, offer more facilities and
offer service, which apartments cannot,” he said.

($1 = 0.6608 British pounds)

(Additional reporting by Victoria Bryan, Editing by Belinda
Goldsmith)