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In filing its lawsuit this month against New York and officials of the city and New York State, Airbnb for at least the second time in four months has taken aggressive legal action against governments and officials in one of its largest U.S. markets.
Airbnb sued New York State’s attorney general, Eric Schneiderman; New York City’s mayor, Bill de Blasio; and the city itself on Oct. 21, the day New York governor Andrew Cuomo signed into law a bill that steps up enforcement against Airbnb hosts who violate short-term rental statutes.
Airbnb’s lawsuit alleges, among other things, that the law violates its hosts’ rights to free speech and due process and is ambiguous about whether Airbnb or its hosts would be liable for any violations.
Schneiderman, hotel industry representatives and local housing advocates have long taken issue with Airbnb and its hosts. Schneiderman has argued that most New York City listings violate a 2010 law that prohibits dwellers from renting out units for fewer than 30 days.
Meanwhile, representatives of the lodging industry complain that Airbnb hosts are not subject to the same regulations as hotels, while others have asserted that the growth of Airbnb is exacerbating New York City’s housing shortage.
“We have always supported the rights of property owners to occasionally rent their homes to earn extra income,” Troy Flanagan, the America Hotel & Lodging Association (AH&LA) vice president of state and local government affairs, said in a statement. “But the level of commercial operations fostered on these sites needs to stop. It’s about time that Airbnb starts living up to its ‘community compacts’ and begins adhering to the laws on the books.”
With that in mind, the new law, among other things, carries fines of up to $7,500 for hosts who violate the city’s short-term rental laws.
“The law signed today will provide vital protections for New York tenants and help prevent the continued proliferation of illegal, unregulated hotels, and we will defend it,” Schneiderman said in an Oct. 21 statement. “Airbnb can’t have it both ways: It must either police illegal activity on its own site, or government will act to protect New Yorkers, as the state just did.”
The lawsuit is the latest evidence of increased tensions between Airbnb and various governments being pressured by the lodging industry to take a harder line against the company as it continues to boost its number of hosts, bookings and annual revenue.
Some analysts estimate that Airbnb generated $900 million in revenue in 2015, while the company last year forecasted that its annual revenue could reach $10 billion by the end of the decade. Meanwhile, Phocuswright reported earlier this year that Airbnb generated about $7.5 billion in gross bookings last year and forecasted that it could exceed $12 billion in 2016.
In an Oct. 21 statement, Airbnb asserted, “In typical fashion, Albany backroom dealing rewarded a special interest — the price-gouging hotel industry — and ignored the voices of tens of thousands of New Yorkers. A majority of New Yorkers have embraced home sharing, and we will continue to fight for a smart policy solution that works for the people, not the powerful.”
Airbnb took a similar stance after its home city, San Francisco, crafted a bill earlier this year that required all Airbnb hosts to register with the city and enabled the city to fine Airbnb as much as $1,000 a day for each listing by an unregistered host.
Airbnb, which was founded in San Francisco in 2008, responded by suing the city in June, calling its registration system “broken” and “confusing.”
Whereas Airbnb has reached agreements to collect occupancy taxes in cities such as San Francisco, Chicago and Washington and remit the funds to their governments, the company’s relationship with New York has been particularly contentious.
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Meanwhile, New York hotels’ RevPAR through September fell 2.9% from a year earlier, according to hospitality research firm STR. Hotel representatives attributed the loss largely to Airbnb’s growth, while analysts also cited a 5% increase in hotel room supply.
“We’ve done a variety of things to try and build relationships [with the hotel industry],” said Chip Conley, Airbnb’s head of global hospitality and strategy. “We’ve had the global hotel companies come to our headquarters to do immersions so the Marriott and Hilton executives can learn about how we operate and how we understand millennial travel needs. But the hotel associations and hotel unions [in New York] have been very rabidly anti-Airbnb.”
However, how much the political clout wielded by such organizations can slow Airbnb’s growth in cities such as New York remains to be seen.
On one hand, said Bjorn Hanson, clinical professor at the New York University School of Professional Studies, Preston Robert Tisch Center for Hospitality, Tourism and Sports Management, Airbnb might be giving lawmakers a head start by publishing some of the company’s own data indicating that many of its hosts violate city laws by renting multiple units and even some buildings for most, if not all, of the year.
Still, both Hanson and Jan Freitag, STR’s senior vice president, said that Airbnb might continue to stay one step ahead of lawmakers such as those in New York for a while. Freitag cited the challenges for governments to generate enough evidence and host documentation to prove legal violations.
The New York law, Hanson said, “was written in a way that’s very odd, because the penalty is really focused on those who advertise, not Airbnb. So Airbnb came out somewhat successfully.”
Sоurсe: travelweekly.com
