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New Ad Escalates Hostility in Airbnb Regulatory Battle

· August 9, 2017

Categories

In an escalation of hostilities, a new 30-second ad backed by New York City hotels and hotel worker unions portrays Airbnb listings as security threats to New Yorkers.

The ad, which was immediately criticized for using fear-mongering tactics, is the latest example of established industries responding to disruptive competition by lobbying for regulatory intervention.

The video begins by stating that there are 40,000 Airbnb listings in NYC and asserts that Airbnb permits “illegal listings on its site.” Despite this, the ad states, Airbnb “refuses to hand over the addresses to law enforcement.” Failing to turn over this data could have dangerous repercussions, the ad appears to convey, referencing how Salman Abedi, the Manchester bomber, used a short-term rental through an online retailer when he conducted the attack, and reminding viewers that New York remains a primary target for terrorism.

Airbnb quickly denounced the ad, calling it “an outrageous scare tactic” and asserting that Airbnb “had nothing to do with the tragic events in Manchester.” It also stated that it is “one of the only hospitality companies that runs background checks on all U.S. residents, both hosts and guests.”

The ad comes in the midst of discussions over proposed legislation in New York backed by the hotel industry that would require ads on home-sharing sites to list the property’s “address, including street name, street number, apartment number, borough, town and county of the unit being offered.”

According to Assemblywoman Linda Rosenthal, who introduced the legislation in July, disclosing this information would make it easier to enforce legislation passed last year (also introduced by Rosenthal) prohibiting the advertisement of short-term rentals for entire homes on Airbnb and to “protect [New York’s] affordable housing market.”

In the past Airbnb has resisted turning over data about its users, asserting it would be a breach of their privacy. But, in 2015, the company reached a compromise with New York City officials, agreeing to turn over anonymized data containing “the type of listing (a room or entire unit), the host’s earnings, number of nights it was rented, information about its zip code, and how many properties a host currently lists through the service.”

It is not yet clear how this new legislation would make hosts disclose their information. Rosenthal has stated that users may be required to share their address with City Hall rather than making this information transparent on the site.

Similar regulation, and accompanying advertisements, have been popping up in other communities, too.

In April a television ad depicted a woman who claimed that her southeastern Washington D.C. neighborhood “doesn’t feel like the place [she] grew up” due to Airbnb renters allegedly filling her neighborhood with strangers.

The woman, however, was discovered to be an actress residing in New York City. Share Better, an affordable-housing advocacy group behind the ad, later confirmed this.

Share Better’s ad was broadcast as D.C. residents debate a bill that would make it illegal for homeowners to rent more than one property on a short-term basis, and could restrict how many days out of the year owners can rent their home to as few as 15 days.

Share Better is currently engaged in similar advocacy efforts in New York City as Rosenthal’s legislation moves forward. The group recently created a “hotline for New York City tenants to blow the whistle on illegal short-term rentals on the home-sharing service.”

Airbnb has drawn regulatory scrutiny in other cities, too, including: Los Angeles; Miami Beach, Florida; Portland, Oregon; Toronto; Barcelona; and Berlin.

Though seemingly unrelated, these cities’ local regulations could be the work of one national hotel lobbying campaign against Airbnb.

In April The New York Times uncovered that the American Hotel and Lodging Association, a trade group comprised of members like Marriott International and Hilton Worldwide, had launched a “multipronged, national campaign approach at the local, state and federal level” against Airbnb. Specifically, the Times found that the group is focusing its efforts on:

lobbying politicians and state attorneys general to reduce the number of Airbnb hosts, funding studies to show Airbnb is filled with people who are quietly running hotels out of residential buildings and highlighting how Airbnb hosts do not collect hotel taxes and are not subject to the same safety and security regulations that hotel operators must follow.

The Association asserts that these tactics are not motivated by “the platform’s financial impact on hotels.” A Marriott executive was similarly dismissive, claiming that Airbnb is not “really making headway in the corporate environment, which is really our bread-and-butter business.”

Airbnb, however, appears to be trying to attract more corporate business through its latest service, internally referred to as “Select,” which will offer guests “quality-inspected home and apartment rentals.”

According to people familiar with the project, Airbnb is launching this “Select” feature in the hopes of attracting higher-paying travelers hesitant to book rooms through the site because they lack the “amenities guaranteed by fancy hotels.”

With the addition of this more business-friendly feature advocacy efforts may ramp up and extend to more cities. Right now, however, according to the Times, the American Hotel and Lodging Association is focusing its efforts on Los Angeles, San Francisco, Boston, Washington and Miami — almost all of which have introduced legislation that would place restrictions on Airbnb.

San Francisco — the birthplace of Airbnb — has passed some of the most stringent restrictions on short-term rentals. In November of last year the San Francisco Board of Supervisors passed legislation “barring hosts from having paying guests in a room, house or entire apartment for more than 60 days a year.” Under the previous city law hosts could rent entire homes for up to 90 days per year.

And, this May, Airbnb and the city of San Francisco settled a lawsuit over a city ordinance prohibiting Airbnb from allowing hosts to list their properties without first registering them with the city. Despite its previous unwillingness Airbnb finally agreed to implement this registration system, which requires hosts to turn over their names, addresses, and guest stays to city officials.

However, in other cities Airbnb has fended off regulatory action. In April Airbnb scored what it calls an “initial victory” when a Judge in Florida’s Eleventh Judicial Circuit Court issued a temporary restraining order preventing the city of Miami from upholding its ban on short-term rentals in residential neighborhoods.  

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.