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Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown
- hamandcheese 3y agoThere is no mention of the long term rental market and how this may affect it, which feels like a glaring omission.
- p_j_w 3y agoIt's an intentional omission, the AirBnB CEO is trying to take everyone's eyes off the ball. He's trying to redirect your attention like a cheap magician.
- objektif 3y agoTech CEO: Please do not stop us from making money.
- toomuchtodo 3y agoIt is in vogue to call AirBnB a tech company, but they are no different than any other internet booking engine (Booking.com, Expedia, etc). The only difference is they manage the inventory database themselves vs plugging into other lodging inventory systems.
- gkoberger 3y agoRent goes down, though, which seems good in general.
- logicalmonster 3y ago[flagged]
- hypeit 3y agoI seriously doubt hotels will get more expensive as they still have to compete with each other. I would say Airbnb has never had any influence on hotel pricing in NYC. That being said, I tried Airbnb in NY a few times and it was absolutely disgusting. In most places Airbnbs will be a bit dirtier than a hotel but in NY it wasn't even close. Rats, cockroaches, showers that don't drain, grime everywhere... After a few experiences like that I was out. Hotels in NY offer a much better experience.
- mikepurvis 3y agoCan confirm— stayed in a flat in Brooklyn and it was gross. Bathroom worked but the kitchen was full of roaches. Anything not sealed had to go straight in the fridge.
- gotaran 3y agoI rented a unit in a prewar in Hell’s Kitchen. The basement and trash chutes were roach infested. I had to go through absurd lengths to not get a roach infestation in my apartment. Taking out trash every night (into a roach infested chute), never keeping any cardboard lying around, caulking all gaps around (a surprising number of) pipes, plugging drains at night, applying bait and IGR every once in a while, having monthly exterminator visits (if the guy ever showed up), and then spraying a special insecticide I got every other week. Even then, I used to occasionally see roaches in my unit. I can’t imagine what it’s like when you have an AirBnb with some very transient tenants and no pest control.
- atleastoptimal 3y agoSupply and demand. Fewer AirBnB's mean more will use hotels who will otherwise use AirBnB, leading to hotels increasing their prices, even though they compete with each other.
- hypeit 3y agoThere's no shortage of hotel inventory in NY. The supply is there. Hotel pricing didn't change at all in NY pre/during/post-Airbnb.
- deleted 3y ago[deleted]
- RC_ITR 3y agoAnd the supply of apartments for living in will go up by exactly the same amount. Supply and demand works in both directions.
- lawlessone 3y agooh no ;_; I'll be thinking of the hotel customers when i'm paying my rent.
- tptacek 3y agoI read the story, and there's nothing in here that's surprising; per the headline, the laws of supply and demand still hold. The new regulations in NYC were about reducing the price of long-term housing, not short-term stays.
- plagiarist 3y agoOTOH fewer people will show up to listings for non-existent locations or locations that aren't owned by the fraud who listed it.
- pseg134 3y agoWell I’ll be sure to think about that as I am having the first full night of sleep that isn’t interrupted by French tourists buzzing every door in the building at 3AM every night.
- RC_ITR 3y agoYeah and on the flipside the price of rent will go down. A weird quirk of America is that we are so obsessed with tourism that we are willing to sacrifice quality of life for people who live in one place, for the benefit of a bunch of people who visit for 3-4 days. This is the peak of that thinking.
- jddj 3y agoYou'll be pleased to know that isn't an exclusively or even particularly American trait
- lawlessone 3y agoWe have the same issue's in cities across Europe. And then some dim people blame refugees when they would rather be living in apartment or house.. but can't because those are on AirBNB. Hotels aren't blameless either. in my city they cancelled a ton of reservations and blamed a technical fault.. when really they wanted to charge more after a concert was announced. https://www.irishmirror.ie/news/irish-news/taylor-swift-bookings-cancelled-hotel-30375003 https://www.irishmirror.ie/news/irish-news/taylor-swift-book...
- JamesBarney 3y agoRegions do not support tourism for the sake of the tourist. They support tourism, because tourists spend lots of money which flows into the pockets of the people that work there. Tourists spend around 48 billion on the NYC economy.
- RC_ITR 3y agoThis is always such a weird argument to me, because you know who else adds to an economy? People who live and work there. Forcing people to commute in from Jersey City is a huge net drain on NYC's economy.
- JamesBarney 3y agoIn a well functioning city you just build more buildings so you can have tourists and locals.
- chollida1 3y agoWell AirBnb banning in New York is alot different than in other cities just by virtue of the type of accommodations that are available in New York. If you ask most people why they airbnb over hotels they say its because I can take my family or group of friends to an airbnb, where as in a hotel we'd need to get 4-5 rooms. In most other cities you can trivially find 5 bedroom places that fit that bill. In New York I'm not sure you can find alot of 5 or 6 bedroom places, especially in Manhattan. So airbnb's main draw for most people just isn't available in New York in a way that it would be in most other large cities. Which means you'd expect alot less people to use airbnb over a hotel in New York.
- hn_throwaway_99 3y ago> Which means you'd expect alot less people to use airbnb over a hotel in New York. This analysis doesn't make any sense given that New York was a huge part of AirBnB's overall inventory, being their biggest market worldwide for a long time.
- chollida1 3y ago> This analysis doesn't make any sense given that New York was a huge part of AirBnB's overall inventory, being their biggest market worldwide for a long time. Was NYC their biggest market? Where can i find the data you're using?
- Jenk 3y agoI can confirm NYC was the starting ground and biggest market place for AirBnB. I had access to data from https://www.airdna.co/ https://www.airdna.co/ in a former role.
- hn_throwaway_99 3y agoIt says it right in the article. Furthermore, the article says Paris is currently AirBnB's biggest market, which further disproves the comment I was responding to. You're not getting many 5 bedroom apartments in Paris, either.
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- orange-mentor 3y agoI kind of wish capitalists would just be honest for once. This is bad for their specific business. Just come out and say that instead of making stuff up.
- etchalon 3y agoI'm shocked that the CEO of Airbnb would go out and try to get consumers angry about a policy which negatively impacts his business.
- bobthepanda 3y agoPeople who are not residents of New York (the customer base) have pretty much no leverage over a government entirely elected by the residents. Of the residents, there are a lot more pissed off renters and neighbors than there are AirBNB hosts.
- etchalon 3y agoYep. It's not a ploy that will do much.
- rdtsc 3y agoThe stories I have read over the years had kept me from trying Airbnb. Maybe I am too risk averse, but if I spend money and time on vacation, leaving all that up to some unknown shady host to mess up and then having to fight with Airbnb support sounds not enjoyable at all. I'd rather be surprised by fun and enjoyable things. > Hyatt announced a new vacation rental platform, Homes & Hideaways by World of Hyatt, the same day Chesky was speaking. That's one good thing is that it keeps hotels on their toes and forced them to play in that market as well. > Further, IHG is even offering 10,000 IHG One Rewards points to travelers who can prove their New York City Airbnb reservation was canceled in light of the new city policy. That sounds like an interesting approach. Just the ad itself is enough to turn heads. 10k points is not a huge amount but might still get a number of customers. When a competitor mistreats a customer, and you're the one helping them solve their issue, they'll remember that forever.
- yieldcrv 3y agothats… yes, too risk averse people have overwhelmingly positive experiences with airbnb and a few outliers, or people make fun of the pricing of the fees but the actual experience is pretty benign
- welldoneator 3y ago...until something goes wrong and you're dealing with a situation at best more annoying and worst downright hostile (ask me how I know). Your only recourse if something goes wrong is a random host whose income is directly tied to not helping you. If you're dealing with an issue at a hotel, there's strict policies in place and at the very least the person on the other end gets paid regardless of whether or not you're refunded, so you're more likely to actually be refunded via policy rather than the whims of a fraudster.
- yieldcrv 3y agothere’s little accountability we already established that
- deleted 3y ago[deleted]
- itsoktocry 3y agoYes, cracking down on the unlicensed, uninsured black market in hotel rooms will raise the price of an average stay. But there are obvious benefits that the Airbnb CEO isn't considering. I feel hypocritical, because with a young child Airbnb is awesome for trips. We get space and separate rooms. But I understand the strain it's putting on our system (I'm Canadian).
- locallost 3y agoBy the same logic rents will go down, so thanks for the crackdown.
- Salgat 3y agoSounds like this will promote growth of new hotel construction/expansion. Great!
- jdminhbg 3y agoIdeally it would; in practice, zoning and planning prevent supply from keeping up.
- genericname 3y agoNYC recently passed a zoning amendment which requires special permits and additional construction rules for new hotels https://www.hvs.com/article/9578-new-york-citys-2018-2021-hotel-zoning-amendments https://www.hvs.com/article/9578-new-york-citys-2018-2021-ho... Unfortunately, I do believe the extra burden will lead to less construction and I worry that short-term stays will indeed become more expensive because of the lower supply of rooms.
- Salgat 3y agoIn many parts of the city hotels have already outpaced other non-residential development. These regulations, on top of supporting union workers, just ensure that hotels don't take over too much of certain parts of the city. The biggest issue with AirBNB is that you have unregulated conversion of residential property into short term hotels, which impacts long term residents living in the city. A hotel shortage mostly impacts tourism, which is already booming in the city and is a less critical issue for NYC residents.
- Ajay-p 3y agoThe hotels have always been overpriced, especially in New York City with all of the fees and extra taxes. New York City has nearly destroyed Uber and other ride sharing services in favor of taxis, and they will do the same to Airbnb to satisfy the hotels. Protectionism by another name.
- gumby 3y agoHe’s whistling past the graveyard, as I suppose he should be. As others have commented, Airbnb was never enough to move the needle on hotel prices in NY anyway. But they did move the needle on quality of life for people who live there, which is whom the government represents. Historically it’s the visitors who get soaked everywhere (car rental fees at airport, hotel visitor taxes and of course Cheesecake Factory in Times Square). The sheer mass of these charges in NY are another reason why Airbnb had no impact on costs.
- Simulacra 3y agoIf not then why is the city and hotel industry fighting so hard to shut them down? Airbnb was competition.
- gumby 3y agoI believe the real pressure is coming from city residents who don't like having an ABNB nearby or object to the reduction of rentable apartments, while the hotels are just piling in on the scrum.
- floatrock 3y agoCool, now do housing costs for the people living there (and, theoretically, the ones deciding how their own city should be regulated). Backlash was never about hotel prices, it was always about the externalities like rampant real estate speculation driving up housing costs and hollowing out neighborhoods for a quick buck. The corporate economic pollution. Turns out there's a certain point where people want their quality of life. Ignoring this angle is completely disingenuous and tone deaf, but hey, if your argument can't stand on the merits, throw in a fear-mongering distraction. CEO-speak 101.
- yardie 3y agoIt's funny Brian compares NYC to Paris. If there is one thing the French love is to create rules and regulations. I think the team in Paris realized, probably early on, they could work with the marie or against the marie. And work with some well-meaning regulations. Parisians were concerned about affordability and flat supply early on with Airbnb, VRBO, and PaP. NYC city hall was not and figured the market would sort itself out. Year after year the calls were growing louder about landlords evicting tenants for short term tenants, and the council continued to ignore it. People are angry, they vote, and if you piss them off long enough they can do leverage it in unexpected ways. I was an early proponent of Airbnb, when it was just geeks renting their flats out for the weekend. But growth meant it had to take over more housing. Taking it away from residents and turning it over to tourists. I wanted it to "Live like a local" but when you have entire buildings dedicated to short term rentals none of the locals are around.
- JumpCrisscross 3y agoIt is an interesting example of a company failing to self regulate. I’m genuinely fine with my neighbours renting out the apartment they live in while they’re there or out of town. But it wasn’t okay to be woken up at 4AM to the button-mashing buzzer fiend of the week.
- hospitalJail 3y ago>I think the team in Paris realized, probably early on, they could work with the marie or against the marie. And work with some well-meaning regulations. That sounds all great, but you also wonder if these well-meaning regulations are the reason why Europe is so far on the decline. I'm not convinced NYC did the right thing here. You are destroying a large part of the tourism industry in favor of a mere ~10k new listings, still controlled by landlords. You wonder how much this is going to hurt the government's bottom line.
- stephanerangaya 3y ago"The measure is believed to have eliminated as many as 15,000 — or about 70% — of Airbnb's listings in New York City, Wired reported using data from housing advocacy group Inside Airbnb." I hope this means lower rent for New Yorkers, 15,000 apartments possibly going back to the rental market seems like something positive.
- kypro 3y agoNew York is never going to be affordable though. The whole concept of "low rent" in New York is an inherently stupid goal. The reason rents are high in New York is primarily because it's tourist hotspot, but because people are serving a market. If you want rents to be cheaper in NYC then the fix here is really to make the city less desirable to tourists so people don't want to stay for the week. But then is it even New York? In an ideal world New York could have low rents, be a tourist hot spot and be a place people can live and raise kids. In reality that's never going to happen, and politicians trying to "fix" the problems with New York is just a waste of resources and is going to come at the cost of people who invested in property in NYC to serve the actual demands of the city (yeah, I know f** landlords, etc). The solution here, if anything, is transportation and remote working. Ideally people should be able to easily and affordably commute into cities like New York when needed, but they shouldn't feel they have to live there. But even this is probably too utopian. Not everyone is a software engineer with the luxury of remote working after all.
- hn_throwaway_99 3y agoWow, some of the armchair analyses here are just so lacking in understanding beyond people's own individual experiences ("My AirBnB was dirty!"): 1. Of course hotels will get more expensive. This is basic supply and demand at work. As another poster commented, the total amount of AirBnB inventory in NYC was material. Saying "hotels still have to compete with each other" is just missing the absolute basics of Micro-econ 101. 2. Of course, as others have posted, the whole point of these AirBnB crackdowns is to make more long term rentals affordable. It's really just about shifting supply from STR to LTR, so you'd expect prices to go up in one market and down in the other. 3. Regarding AirBnB, "It might be cheaper, but you will wish you spent the extra bucks" has to be the most eye-rolling comment I saw. Many people simply don't have "extra bucks" lying around. I certainly remember when I was younger thinking there were many trips I just wouldn't have gone on without AirBnB. It's the same reason budget airlines are so popular - people know they suck, but especially in a city like NYC the expectation is you are hardly spending any time in your room besides sleeping in the first place, so people are willing to accept the tradeoff. Plus, access to a kitchen can by huge in terms of cost savings while in NYC.
- stvltvs 3y ago> 1. Of course hotels will get more expensive. This is basic supply and demand at work. Not if the hotels are sitting on off-market inventory. I'm not a hotel general manager, so I assume whatever analysis I would do would be overly simplistic. I just know that hotel rooms often go empty, so AirBnB rooms leaving the market might not affect supply and demand in simple ways.
- shashasha 3y ago“in cities where the hotel business is very active” I really agree with my understanding of the comment referenced in #3. I understood it as whole apartment rental vs hotel. Not room in apartment vs hotel. I would assume seriously cash constrained people would simply opt for room in apartment, which could be a nice deal. but for those who actually need a whole private apartment for some reason, the difference between that price and a nice hotel just isn’t enough to offset the roll of the dice aspect of Airbnb. City specific and imho, but I’d agree it’s accurate for nyc pretty generally.
- nine_zeros 3y agoIn other words, all these airbnb units will become long term rentals. Thus, residents of the city will now be able to afford to live there.