Regulation

How Hotels Are Taking On Airbnb

Hotels have apparently had enough of Airbnb taking their business and are ready to strike back to protect their turf — including pushing a federal investigation into whether home-sharing apps like Airbnb are running up housing prices and the New York bill that limits how much, and how often, hosts can rent their homes.

Both came about as part of a hotel industry plan to protect their turf against Airbnb that is laid out in two documents recently seen and reported on by The New York Times. The plan mostly lays out how the group is stopping Airbnb and described how it planned to rein in the startup in the future.

The plan was a “multipronged, national campaign approach at the local, state and federal level,” according to the minutes of the association’s November board meeting.

Hotels have mostly been quiet on Airbnb — or downplayed the threat.  Marriott noted late last year that Airbnb had not yet cut into their core area of serving business travelers.

But Airbnb has raised more than $3 billion and secured a $1 billion line of credit and could be ready to go public in a year. Currently the agreed upon value of Airbnb is about $30 billion — which would immediately make it one of the larger hotel brands out there.  Hilton’s market capitalization is $19 billion and Marriott’s is $35 billion.

But hotels are not quite ready to let Airbnb run off with their business, as the report text notes.

Airbnb is less than thrilled.

“The hotel cartel is intent on short-sheeting the middle class so they can keep price-gouging consumers,” Nick Papas, a spokesman for Airbnb, wrote in an email. “With more than 250 government partnerships over the last year, we have shown our seriousness of purpose when it comes to putting in place fair rules.”

The national hotel association said its push against Airbnb was not about the platform’s financial impact on hotels.

“Airbnb is operating a lodging industry, but it is not playing by the same rules,” Troy Flanagan, the American Hotel and Lodging Association’s vice president for state and local government affairs, said in an interview.

And it seems what the hoteliers of the nation want most is for Airbnb to play by the rules.

So they are lobbying politicians and state attorneys general to reduce the number of Airbnb hosts, doing studies to show the number of people running hotels out of residential buildings and highlighting how Airbnb hosts do not collect hotel taxes or follow the same rules as everyone else in the lodging game.

The group said it would focus its efforts in key markets, including Los Angeles, San Francisco, Boston, Washington and Miami.

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