Furnished Apartments,Hotels & Short/Long Term Rental entities face off over regulation
The hotel industry and furnished apartments rental platforms and companies are taking each other on in the duel for a big piece of the travel market pie & are not afraid to trade barbs in the process.
As the short-term - furnished apartments rental market has grown to disrupt the hospitality industry in the last decade, rental platforms have frequently been at odds with hotel groups. who want to see rentals properties regulated in the name of fairness. Local municipalities have also argued for new laws over concerns that vacation rentals are changing the character of neighborhoods and reducing affordable housing. But the rental market industry is vehemently defending itself against policies they say go too far.
At Skift Short Term Rental Summit on December 5, representatives from both the hotel industry and rental platforms discussed and hotly debated what regulation might look like in the future for this still-young and growing sector of the travel industry where furnished apartments are increasing inventory by the hour.
Brian Crawford, executive vice president of government affairs at the American Hotel and Lodging Association (AHLA) said his group supports the homesharing economy but wanted rentals to be subject to many of the same laws that applied to the rest of the lodging industry in order to ensure a level playing field, due he was not speaking on the benefits hotels gets from local Gov. which furnished apartments companies do not get.
“It’s really a baseline of things that every business in America already has to comply with. It’s registering and licensing, and that includes providing local governments with actual real data of how many units are available. There needs to be accountability,” he said.
Philip Minardi, director of policy communications at Expedia Group, countered that AHLA was asking for far more than a level playing field. AHLA has consistently lobbied for measures detrimental to rental businesses, according to Minardi, citing as an example the association’s push for higher taxes and fees on short-term rentals in Chicago.
“We’ve really seen a change in the dynamic of what fair and effective policies look like. One of the biggest hurdles we’ve faced in local communities is the hotel association,” Minardi said.
Minardi also accused the AHLA of actively pushing stories that highlighted communities negatively impacted by the short-term rental industry, but Crawford saw nothing wrong with what his group was doing.
“I don’t think we’re heightening the fears. I think we’re reporting what’s in the news,” Crawford said.
LOCAL IMPACTS Communities like New York City, San Francisco, and Oahu have pushed for more regulation on short-term rental units, claiming the businesses were raising housing values beyond what local residents could afford — a point Crawford also made. But Lisa Jurinka, chief legal officer of Vacasa, saw no evidence that any new laws have improved the housing situation in those cities.
“Those areas have the strictest regulations, yet we are not seeing any change in affordable housing being made available. I’m not seeing how stricter regulation results in a change in affordable housing,” she said.
If there is a point that both sides agreed on, it’s that any new regulations should come from the local communities, who have the most at stake as the short-term rental industry continues to grow, instead of state and local governments.
“Local governments and localities know the impact on their neighborhoods. They should be the ones coming up with the most sensible regulations.” Crawford said.
Minardi was quick to point out, though, that the AHLA had actively pushed for anti-short-term furnished apartments rental laws at all levels of government, from local to federal.
Despite current tensions between those who support hotel properties and furnished apartments rental platforms, the line is beginning to blur, as both sides see their interests merge. Large hotel chains, such as Accor and Marriott International, have started to offer rentals themselves. Airbnb recently acquired HotelTonight and made a large investment in the Indian hotel chain Oyo.