Understanding the Power Plays in the Big Apple’s Accommodation Battle
By: Brad Greiner, CEO of Open Air Homes and OpenAiRE Brokerage
This is a four-part series on the crackdown of Airbnbs in NYC. The first delves into the hotel lobby’s efforts to curtail affordable options for guests visiting the city. The second urges the hotel lobby and industry to look inward about how they can create experiences that guests truly want, instead of spending their lobbying dollars to influence politicians to create draconian regulations. The third will explore if Los Angeles could be next on the hotel lobby’s list, as they attempt to shepherd travelers back into traditional hotels. The fourth, our recommendation for choosing the path of medium term, or Month+ rentals, for NYC residents, as we have done in Los Angeles successfully.
This post was inspired by the great NY Times podcast, Hard Fork. We highly recommend listening to the first segment of this podcast to hear Kevin Roose and Casey Newton’s take on the crackdown. And yes, we are purposely linking to their Threads instead of Twitter. The lesser of two evils.
The Real Motive Behind the Crackdown
While politicians tout the benefits of limiting Airbnb for housing availability, there’s skepticism about the real motives behind these stringent measures. Is the housing crisis the primary concern, or are there other, more powerful forces at work?
The Hotel Lobby: A Powerhouse Behind the Scenes
It’s no secret that the America Hotel and Lodging Association (AHLA), comprising major hotel chains and industry stakeholders, exerts considerable influence in the realms of policy-making. But what’s startling is the extent to which they target everyday homeowners, many of whom depend on Airbnb to afford skyrocketing rents in the city.
These homeowners often rent out their homes when they have to travel for extended periods of time for work, or when they live in NYC only part-time and wish to monetize their vacant assets when out of town. Airbnb has unlocked this potential to afford two mortgages in two cities homeowners love, and this crackdown puts homeowners who have the ability to live in multiple cities in financial jeopardy once these rules take effect on September 5th, 2023.
The Financial Play: A Look at Rising Hotel Rates
Over the past two years, there has been a sharp increase in hotel prices. On top of that, once straightforward rates have now become mired in hidden fees, resort taxes, and surcharges, which lawmakers are attempting to crack down on in California. This price inflation is alarming, especially when homeowners are being restricted from providing affordable, alternative accommodations.
Living Like a Local: The Airbnb Appeal
Platforms like Open Air Homes, reporting an average stay duration of 9.5 days as of August 26, 2023, highlight the unique appeal Airbnb brings. The chance to live as a local, to be ensconced in a neighborhood rather than a sterile hotel corridor, is a lure few travelers can resist.
Airbnb has sued the city of NYC to try to halt the short-term rental changes, but the case has been dismissed.
A Deeper Dive into the Hotel Lobby’s Influence
- Overview: A collective force, the hotel lobby aims to make sure industry perspectives are top of mind for policymakers.
- Main Players: At the helm is the American Hotel & Lodging Association (AHLA), the predominant representative body for U.S. hoteliers.
- Key Concerns: The rise of Airbnb and similar platforms poses a perceived threat, prompting the lobby to push for level playing fields in terms of regulations and taxes.
- Heavyweights in the Hotel World: Chains like Marriott, Hilton, and Hyatt are often in the thick of these lobbying efforts, showcasing the industry’s unified front.
- Lobbying Budget: With a budget in the millions, the hotel lobby’s reach and influence are profound. Their finances spread across direct lobbying efforts, campaign contributions, and other related activities.
- State-Level Interests: The lobby’s interests go beyond national policies, trickling down to state and local levels where they aim to shape the landscape in their favor.
Balancing All Stakeholder Interests Needs to Be the Future of the Hospitality Industry
While the hotel industry’s concerns are valid, they should not come at the expense of homeowners’ financial resilience or limit choices for travelers. City officials must maintain a delicate balance, ensuring fair representation and not succumbing entirely to the whims of any single lobby.
