Gov. Andrew Cuomo signed a new law last week that bans New Yorkers from advertising many properties on Airbnb. Violators can face up to $7,500 in fines.
But just the day before, one hotel CEO was already seeing dollar signs. The new ban “should be a big boost in the arm for the business, certainly in terms of the pricing,” Mike Barnello, chief of LaSalle Hotel Properties, said in an earnings call last Thursday, according to a transcript provided by Seeking Alpha. LaSalle currently operates four hotel properties in New York City.
As one Airbnb representative told The Washington Post:
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. Albany back-room dealing rewarded the price-gouging hotel industry and middle class families will pay the price.
By allowing ordinary Americans to rent out their homes, Airbnb has become a growing source of competition for the hotel industry. Last year, Airbnb rentals hosted more than 1.25 million visitors and “put more than $430 million dollars into the pockets of New York hosts,” the company claimed in an April report. Airbnb even boosted city’s lodging supply by almost a fifth, according to one estimate. In turn, Airbnb asserts that the average host earns about $5,300 in income through short-term rentals, while 78 percent of the 46,000 hosts in New York are working- or middle-class.
Thanks to nationwide competition from Airbnb, the CEO of Pebblebrook Hotel Trust, which owns interests in 37 hotels, even said that his company has lost the “ability to price at what maybe the customer would describe as sort of gouging rates.”
The new ban would further hinder the ability of New Yorkers to earn through short-term rentals. Under the law, it will be illegal to advertise renting out an entire apartment for less than 30 days. The ban does not affect renting out spare rooms or stays over 30 days.
In response, Airbnb promptly filed a federal lawsuit against New York Eric Schneiderman and Mayor Bill de Blasio, claiming the new ban “violates Airbnb’s and hosts’ First Amendment rights” and is preempted by the federal Communications Decency Act, which largely shields websites from third-party liability.
Similar fights are a common sight across the country. Owners of taxi medallions have filed lawsuits to block Uber and Lyft from competing with traditional cabs. In New Jersey, pool contractors are lobbying lawmakers to pass a new license, since “you can raise the rates you’re charging… [as] a licensed pool builder or service professional.” And the Institute for Justice has long challenged licensing cartels in fields as diverse as hair braiding, teeth whitening and casket selling.