BLOG: Crony Capitalism and Short-term Rentals

by Steve Shur | Travel Tech

Just over a week ago, Governor Cuomo signed into law a bill that imposes huge fines on anyone who advertises a short-term rental of less than 30 days.  This came after a long and drawn out campaign by anti-short term rental advocates (read: the hotel lobby) to pressure the legislature and the governor to come to their competitive aid.  Just as the taxi industry doubled down against platforms like Uber and Lyft, the hotel industry is pressing hard to keep innovative competition out of the market.  And in this case, the state of NY is doing their bidding.

The hotel lobby’s rationale for advocating bans or limits on short-term rentals are based on misrepresentations, falsehoods and red herrings on everything from taxation to impact on housing stock to traveler safety. Their claims are unfounded. Short-term rental platforms have long advocated to create a pathway to collect and remit occupancy taxes as a service to their hosts, and yet in New York the hotel lobby has opposed such an agreement.  There is no evidence of short-term rentals impacting affordable housing.  Rents are increasing only 3.9% annually in New York City since Airbnb became a factor, down from 4.4% between 2000-2010.  And with regard to safety issues, as Brett Arends wrote in Marketwatch, “If fire traps are really your concern, how come this 30-day limit? Are long-term renters flame-retardant?”

As with the taxi industry’s opposition to ridesharing, the ire of the hotel industry all stems from competitive interests.  And when innovative, disruptive platforms are limited in their ability to serve consumers and function in the marketplace,  the only winner is legacy industry.  In New York, average citizens have lost critical income and travelers have far fewer options – at higher prices. In fact, just a few days ago a hotel executive publicly rejoiced over his new ability to raise prices with short-term rentals off the market.

At Travel Tech, we advocate across the board for public policy that improves transparency, competition, and consumer choice.  We want healthy competition because with it comes options, more affordable prices, and a happier traveler.  The competitive interests of an entrenched industry should not get in the way of that.