Hotel Industry Announces Airbnb War

There are many different services in the world that help people to travel. The leaders are Booking.com, working mainly with hotels and Airbnb - a service for finding and short-term rental of private housing around the world. Both companies are doing well and continue to grow. But if Booking helps the hotel business, allowing you to get new guests, then Airbnb, on the contrary, takes away customers from the hotel industry. After all, if earlier it was rather difficult to agree on a short-term rental apartment, now this issue is solved in just a few clicks.

So, the hotel business is not satisfied with the current situation and plans to declare war on Airbnb. Rather, it is already underway. Only, of course, not on the battlefield, but in a legal, legal field. For example, in October, a new law was passed in New York, which prohibits short-term housing rental. It was the first bell, the action of the authorities, which made it clear that officials want to control the rental market for private housing. And the hotel industry is only at hand.

Last November, the American Hotel and Lodging Association announced that an investigation by the federal authorities in the rental market and a new law are “notable achievements." As for the law, it prohibits the rental of apartments for a period of less than 30 days. For violation of a penalty of $ 1,000 and up to $ 7,500. Together with Airbnb, it affects FlipKey, HomeAway and other similar services. The state of New York is the most active and extensive housing market in the world, and legal restrictions, of course, affect Airbnb revenues. State authorities believe that it was services like Airbnb that influenced a significant increase in rental prices.
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In November, representatives of the hotel business have formed a strategy for further struggle with Airbnb. Documents have come into the hands of The New York Times journalists to understand how seriously the hotel industry treats the service and its work. In particular, in one of the documents, a representative of Marriott International, a trading group that is part of the Association, writes that Airbnb "has become a major player in the delivery of housing for corporate representatives, which is our main business."

Perhaps this is true. Since 2008, Airbnb has evolved from a small startup into an international company. At the same time, in most cases, it manages to avoid the need to pay tax in any other countries except the USA. But the hotel business has to pay wherever there are hotels. According to Airbnb statistics, since 2008, 150 million people have used the services of the service, who have rented about 3 million different apartments, houses and other residential buildings in 191 countries.



For several years of its work, the service managed to earn more than $ 3 billion US dollars and get $ 1 billion of investments and loans. In this or next year, according to one of the company's executives, she may enter an IPO. The total estimate of Airbnb is $ 30 billion. At the same time, Hilton’s capitalization is only $ 19 billion, and Marriot is $ 35 billion.

Naturally, representatives of the traditional hotel industry do not like this situation. The documents referred to above state that in 2017 it is necessary to “create clear legislative conditions in the country using a wave of strict laws at the state level while simultaneously refining legislation at the national level, which will strengthen regulation of the short-term rental market”.

The “hotel workers” do not see any other way, since the service activities have led to a decrease in the rates for hotel rooms even during the holiday season, so this business has lost a lot of money and continues to lose them. One of the target groups to which the work of the hotel business is directed is representatives of the middle class. Now the Association plans to start poaching such customers from Airbnb when it comes to short-term rest at the hotel.

"Airbnb works in the hotel business, but does not play by the same rules," said Troy Flanegan, vice president of the American Hotel and Lodging Association.

As far as can be judged, now one of the main tasks of the Association is to influence politicians, lawmakers in order to reduce the number of sites available to Airbnb, and start investigating cases of "quiet" hotel business. This refers to the cases when people in residential buildings open, in fact, hostels and hotels, without paying the appropriate contributions to the budget, but which are paid by representatives of the hotel business. The association will operate in central Airbnb markets, including Los Angeles, San Francisco, Boston, Washington and Miami. In order to successfully advance in this direction, the Association forms various political and business alliances, creates influence groups in key regions. The Association has great opportunities, it is managed with billions of dollars, so there is influence and money here. The first results of this struggle are already there .



There are representatives of the hotel business and the national level. So, journalists say that the Association has already started working with senators from different states in order to prepare national laws that will allow introducing certain kind of restrictions for Airbnb and other similar services. “We are trying to dispel the myth that Airbnb supports moms and dads by letting them make some money,” said Flanegan.

In general, it can be said. That the struggle between the traditional hotel business and the services of short-term rental housing is just beginning. But the result of this struggle is difficult to predict, since Airbnb and its “colleagues” have money and instruments of influence, so it only remains to wait.