The San Francisco Board of Supervisors has passed a bill
requiring Airbnb and its sharing economy peers to remove any listings not
registered with the city, and analysts at financial services firm Canaccord
Genuity expect it could lift hotel performance. More important, though, they
expect San Francisco's move could sway regulators in other markets.
"We do believe Airbnb has had a materially negative
impact on pricing during compression periods, particularly in New York, San Francisco,
New Orleans, Los Angeles and Hawaii," stated the report from senior real
estate investment trust and lodging analyst Ryan Meliker and associate Michael
Kodesch. "As such, we expect a modest tailwind to unfold in the [revenue
per available room] performance of San Francisco hotels in [the second half of
2016] and follow in NYC shortly thereafter."
In 2015, San Francisco officials passed a law that
stipulated any short-term rental provider listing an unoccupied apartment or
home must be a permanent San Francisco resident renting their primary dwelling for
less than 90 days of the year. Hosted rentals, in which a resident is present
during guest stays, are exempt from the 90-day maximum, and absentee property
owners or owners of multiple properties are not eligible to rent. The city also
created the Office of Short-Term Rentals, with which hosts are expected to
register. According to Canaccord, only 1,324 listings of Airbnb's approximately
9,500 are registered with the office.
The newest bill, passed last week, requires Airbnb to remove
unregistered listings or face fines of up to $1,000 per day, per listing. Under
the terms of the 2015 law, some may even be ineligible to register. Cannacord
projects Airbnb listings will fall off 80 percent in the near term and close to
50 percent on a more stabilized basis. "With San Francisco leading the
way, we would expect other cities to adopt similar enforcement tactics to
eliminate the illegal listings on home-sharing sites," the report
stated.
The San Francisco decision comes as Airbnb attempts to play
ball with regulators in other markets over issues like tax collection. In
April, the company reached an agreement with the city of Newark, N.J., enabling
it to collect and remit occupancy taxes on behalf of its hosts. On June 15, the
same day Canaccord released its report, Airbnb reached an agreement with the
state of Pennsylvania to collect and remit its 6 percent occupancy tax.
Still, Airbnb and similar companies face headwinds in other
markets. In New York City, for instance, most short-term rentals spanning less
than 30 days are considered illegal under state law; one- and two-family homes
are OK, but an apartment in a three-unit building is not. With the city
struggling to police potentially illegal rentals, Assemblywoman Linda Rosenthal
has introduced a bill that would prohibit short-term rental companies,
including Airbnb, from advertising in the city. In Chicago, Mayor Rahm Emanuel
continues to tinker with a city ordinance to regulate Airbnb. The most recent
draft would add a 2 percent tax per listing to benefit low-income housing and
would charge Airbnb an additional $60 per listing to pay for city enforcement
of short-term rental rules.
Airbnb also finds itself squaring off against the American
Hotel & Lodging Association, which continues to release market-specific
installments of its
study, "From Air Mattresses to Unregulated Business: An Analysis of
the Other Side of Airbnb," conducted by Penn State University’s School of
Hospitality Management. AH&LA alleges that a significant portion of
Airbnb's revenue comes from commercial operators, those hosts who rent multiple
units year-round. Airbnb, for its part, previously
told BTN that the AH&LA study is "intended to mislead and
manipulate." The Canaccord report did say the analysts don't anticipate a
material impact from Airbnb on the lodging industry beyond the specific markets
earlier cited like New York, Hawaii and Los Angeles.
Hotelier rhetoric at the recent NYU International Hospitality
Industry Investment Conference did suggest that the industry is seeing Airbnb
as a more stable piece of the lodging landscape.
"I think that we can coexist," said Hilton
Worldwide CEO Christopher Nassetta. He added that hoteliers can learn from
Airbnb's methods as they begin to interact more directly
with customers. "I don't think what they're doing is all bad."
Marriott International CEO Arne Sorenson believes Airbnb has
entered a Phase Two, in which small-business people and entrepreneurs serve as
"micro hotel" operators. "The more you get into micro hotels,
the less disruptive it is, the more it's like a traditional hotel," he
said.
Choice Hotels International CEO Stephen Joyce said Airbnb
and companies like it have broadened travelers' definition of an acceptable
stay. "We actually like the space so much that we've joined them,"
said Joyce, referring to Choice's launch of vacation home rentals earlier this
year.
AccorHotels has gone a step further than other
hoteliers in its embrace of alternative accommodations, buying
Onefinestay for €148 million in April and making significant
investments in Oasis Collections and Squarebreak back in February. "We
jumped into that market because we do think that the hospitality market is not
only hotels," said Accor Christophe Alaux, CEO of North and Central
America and the Caribbean. "It's nonbranded hotels; it's home rental.
We're expanding the boundaries of hospitality and lodging."