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Hotel CEO: New Airbnb Regulations Should Allow A 'Big Boost' In Hotel Room Rates
By
Gaby Del Valle
Published Oct 27, 2016
Modified Oct 27, 2016
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Scott Heins / Gothamist
By
Gaby Del Valle
Published Oct 27, 2016
Modified Oct 27, 2016
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Before the latest legislation limiting Airbnb's reach in New York City was signed into law, the home sharing company suggested it was an attack on the middle class, fueled by the city's powerful hotel industry. Whether or not this is the case, at least one hotel executive was recently caught admitting the new regulations "should" lead to higher room rates at New York hotels.
During a conference call with shareholders last Thursday, just before Cuomo signed the legislation, Mike Barnello, CEO of LaSalle Hotel Properties, said the new law "should be a big boost in the arm for the business, certainly in terms of the pricing," according to a transcript of the call obtained by the Washington Post. LaSalle is based in Bethesda, Maryland and manages four hotels in New York city: Gild Hall, Park Central New York, The Roger, and WestHouse.
The new legislation, which Governor Cuomo signed into law last Friday, makes it illegal to advertise short-term rentals on home sharing websites like Airbnb and can slap violators with up to a $7,500 fine. But that doesn't mean illegal listings will automatically disappear, or even that everyone who flouts the law will be caught and fined. The Office of Special Enforcement (OSE), which is responsible for issuing the fines, won't be combing through Airbnb listings to find lawbreakers. Instead, the law is complaint-based, meaning individuals with illegal listings will generally only be punished if the city finds out about them.
As a result of the legislation, Airbnb is suing Mayor de Blasio, Attorney General Eric Shneiderman, and the city of New York. They've retained Gibson Dunn, a law firm known for representing George W. Bush in Bush v. Gore and, more recently, for defending Chris Christie in the ongoing Bridgegate scandal.
"They say a gaffe is unintentionally saying what you really believe, and the latest gaffe from the hotel cartel makes it clear that the New York bill was all about protecting the hotel industry's bottom line," Airbnb's public affairs director Nick Papas said in a statement. "Albany backroom dealing rewarded the price-gouging hotel industry and middle class families will pay the price."
But lawmakers counter that the law isn't designed to punish middle-class households or occasional law-breakers—its main target is illegal hoteliers, especially those who operate multiple properties.
"The Office of Special Enforcement understands what their goal is," Assemblywoman Linda Rosenthal said on Wednesday. "They weren't set up to pick off individual tenants."
Reached by phone, Kenneth Fuller, the CFO of LaSalle Hotel Properties, tells us, "The bottom line is, it’s not about price or competition, it’s about a level playing field. It’s about the fact that these have been illegal hotels, essentially. There’s a study that shows that more than 40% of Airbnb’s revenue in a few cities comes from people who list multiple apartments for rent. It’s not home sharing—it’s a business.” [Editor's note: This appears to be the study to which Fuller is referring; in NYC the study found that Airbnb's revenue percentage from "commercial" rentals is 32.5%.]
Fuller says he believes the new rules are "a step in the right direction: protecting residents and tenants against the rise of illegal hotels. We support the rights of property owners who occasionally rent their homes for an extra income, but we’re concerned about illegal hotels."
Despite both Airbnb and LaSalle's suggestions to the contrary, tourists looking for a cheap place to crash in New York City will still be able to find accommodations through Airbnb, for now.
Tagged
affordable housing crisis
airbnb
lasalle hotel properties
Gaby Del Valle
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