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Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

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Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#61

Post by hn_throwaway_99 »

Wow, 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.

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#63

Post by renewiltord »

RC_ITR wrote: post #10

Yeah 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.

> Yeah and on the flipside the price of rent will go down.

Would you like to set up a bet on this? We can use the average 1 br rent in NYC as the target. To protect against seasonal effects we'll take the min and max over a 1 y period before this occurs and after this occurs. You win if both are lower over 1 y than they are now. I win if both are higher over 1 y. If there's a mix, we call it a tie.

https://www.zillow.com/rental-manager/market-trends/new-york... can be our source

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#64

Post by JumpinJack_Cash »

mastercheif wrote: post #48
hypeit wrote: post #3

I 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 e…

The problem is that it’s essentially illegal to build new hotels in NYC. This is because NYC’s hotel labor unions successfully lobbied to enact a law requiring city council approval to build new hotels in the city. Effectively damning any new developments to endless hand wringing and grandstanding from NIMBYs and other interests. Many new hotels in recent years were staffed with non-union labor, this was their way to…

> > The problem is that it’s essentially illegal to build new hotels in NYC.

Let's build a cruise ship in China or the Netherlands and then use it as a floating hotel in NYC

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#65

Post by akhosravian »

shawabawa3 wrote: post #47
l72 wrote: post #31

Earlier quoted context omitted.

I find AirBnBs only make sense in two scenarios: - You need a "long term" stay, like 3-6 weeks. When I travel over seas, I usually stay in a single city for at least 3 weeks. Having an AirBnB makes sense. I don't need daily cleaning and having a kitchen is great! - You need a full house for a family gathering. Neither of these compete with hotels. Granted, there were options for these types of stays before AirBnB (VR…

Airbnbs also make sense in this scenario: - you get more space, a nicer room, for cheaper than an equivalent hotel Which I'm not sure about NYC specifically, but has generally been true everywhere in the world I've gone

Where are you staying? That has not been my experience with any Airbnb in the last 5 years. I’ve stayed in airbnbs in New York City, San Francisco, Berkeley and Corvallis. It costs as much as a hotel, often misleading about having a “whole house” (they also rent the basement), and having a list of check out chores in addition to a cleaning fee.

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#66

Post by genericname »

Salgat wrote: post #30

Sounds like this will promote growth of new hotel construction/expansion. Great!

NYC 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-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.

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#67

Post by RC_ITR »

renewiltord wrote: post #63
RC_ITR wrote: post #10

Yeah 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.

> Yeah and on the flipside the price of rent will go down. Would you like to set up a bet on this? We can use the average 1 br rent in NYC as the target. To protect against seasonal effects we'll take the min and max over a 1 y period before this occurs and after this occurs. You win if both are lower over 1 y than they are now. I win if both are higher over 1 y. If there's a mix, we call it a tie. https://www.zillow…

It's so weird to me that people can claim to fully understand the concept of inflation and still expect prices to go down rather than the rate of growth to decrease.

Rents will go down vs. where it would be otherwise. Almost nothing deflates in nominal dollars ever.

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#68

Post by bobthepanda »

cypress66 wrote: post #34
fasthands9 wrote: post #23

Earlier quoted context omitted.

I'm seeing stats that say hotel occupancy in NYC averaged 87% percent last year. I'm also seeing there are 123,000 hotel rooms and there were 40,000 airbnb listing in NYC. This seems to suggest that supply of airbnb will materially change total hotel listings.

> 123,000 hotel rooms That sounds kinda low for NYC.

There’s high turnover and I would imagine that NYC is less seasonal than other tourist destinations relying on sun and fun; a fair amount of travel is business, a fair amount of destinations are indoors, and New York also has notable things to do during the fall and winter period, which is the slow season for most other destinations.

Vegas and Orlando have a lot of rooms but are also highly seasonal, and there are definitely off periods with lots of deals. Also unlike Vegas or Orlando New York has a lot of hotels in surrounding areas as well; hotels in New Jersey are not included in this number, but there are a bunch between EWR and Manhattan.

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#69

Post by hn_throwaway_99 »

cypress66 wrote: post #34
fasthands9 wrote: post #23

Earlier quoted context omitted.

I'm seeing stats that say hotel occupancy in NYC averaged 87% percent last year. I'm also seeing there are 123,000 hotel rooms and there were 40,000 airbnb listing in NYC. This seems to suggest that supply of airbnb will materially change total hotel listings.

> 123,000 hotel rooms That sounds kinda low for NYC.

Except it's easy to verify:

> At the end of 2019, New York City ended the year with 703 hotels operating in the city and 138,000 available rooms. A year earlier, New York City had 672 hotels operating with 122,000 rooms.

And that was before Covid took tons of inventory offline, though guessing a lot of that has rebounded.

https://www.bizjournals.com/newyork/news/2020/06/17/nyc-may-...

Re: Airbnb CEO: NYC hotels will get more expensive after short-term rental crackdown

#70

Post by renewiltord »

RC_ITR wrote: post #67
renewiltord wrote: post #63

Earlier quoted context omitted.

> Yeah and on the flipside the price of rent will go down. Would you like to set up a bet on this? We can use the average 1 br rent in NYC as the target. To protect against seasonal effects we'll take the min and max over a 1 y period before this occurs and after this occurs. You win if both are lower over 1 y than they are now. I win if both are higher over 1 y. If there's a mix, we call it a tie. https://www.zillow…

It's so weird to me that people can claim to fully understand the concept of inflation and still expect prices to go down rather than the rate of growth to decrease. Rents will go down vs. where it would be otherwise. Almost nothing deflates in nominal dollars ever.

Indeed. Which is why (and also that I think this is a minor factor in present rental prices) I think I'll make money off your claim that "Yeah and on the flipside the price of rent will go down."
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