I seriously doubt hotels will get more expensive as they still have to compete with each other. I would say Airbnb has never had any influence on hotel pricing in NYC.
That being said, I tried Airbnb in NY a few times and it was absolutely disgusting. In most places Airbnbs will be a bit dirtier than a hotel but in NY it wasn't even close. Rats, cockroaches, showers that don't drain, grime everywhere... After a few experiences like that I was out. Hotels in NY offer a much better experience.
The problem is that it’s essentially illegal to build new hotels in NYC.
This is because NYC’s hotel labor unions successfully lobbied to enact a law requiring city council approval to build new hotels in the city. Effectively damning any new developments to endless hand wringing and grandstanding from NIMBYs and other interests.
Many new hotels in recent years were staffed with non-union labor, this was their way to secure leverage in perpetuity.
I’m sympathetic to the union’s position, but this law is going to damage the city’s economy and make NYC unaffordable for many wishing to visit.
> The problem is that it’s essentially illegal to build new hotels in NYC.
I really wouldn't classify this as a problem. It's completely possible today to book a hotel room in NY at all manner of price points. The prices are not noticeably different than anytime in the past few years.
There is a ton of hotel inventory in NYC. If I was a resident, I wouldn't even want more hotels built because the city is already full to the brim with tourists and lacking space for affordable residential property.
> lacking space for affordable residential property
We are not space constrained. Like in California, housing shortage is a policy choice by New York’s voters. (In this case, we chose to shift some of the burden onto tourists versus property owners.)
New York City’s population density, 11,200/sq. km [1], doesn’t even make the top-100 list globally [2]. There are a handful of blocks in Midtown, the Wesr Side and downtown that approach anything close to densities where our ability to build constrains us.
> There is no new Manhattan land showing up any time soon
I have a flat next to a surface-level parking lot in central Manhattan! We have a ton of infill potential before even asking about the two- and three-story buildings that make up most of our residential structures.
You said NY was not space constrained. It's a fact that it is space constrained. Maybe you could squeeze out a bit of density but it is most definitely space constrained.
I think you're both sort of right? NYC is dense for a US city, but not really so for a global city. We're sort of space constrained on an island like Manhattan -- since it's an island -- but much of the outer boroughs are 3 story buildings (with of course exceptions in places like downtown brooklyn, williamsburg, LIC, etc.) There are places in Manhattan we could build more high rise condos, but it's probably easier to focus on the outer boroughs. No one is going to bulldoze brownstone brooklyn, but if we even built more like Paris, which has a population density of almost 2x NYC without skyscraper condos, there certainly would be a huge amount of extra capacity.
I'm not a big fan of what happened to my neighborhood (Williamsburg) with all the giant condo buildings that have gone up over the past decade or so, but people do need places to live and we probably should be growing denser across the entire city. There's definitely a lot of space left, just not a lot of will to change things.
The city is already the sixth largest tourist destination in the world.
If you actually ask the average resident they would probably shrug or have a negative opinion of lowering the barrier to tourism. This also isn’t uncommon, major destinations like Barcelona and Venice are trying to limit arrivals outright.
Tourism isn’t even particularly good at being an economic driver in a rich economy; nearly all the jobs it creates are low paid, because by definition you’re limited to people’s travel budgets.
> At the end of 2019, New York City ended the year with 703 hotels operating in the city and 138,000 available rooms. A year earlier, New York City had 672 hotels operating with 122,000 rooms.
And that was before Covid took tons of inventory offline, though guessing a lot of that has rebounded.
It is low for what it should be. Like a lot of American cities - NYC routinely makes it difficult to build new hotels.
Fwiw for reference, I'm seeing that Las Vegas has ~150,000, LA has ~98,000, and Philadelphia has ~30,000. I'm assuming for a lot of these the numbers would expand/contract if you change the boundaries.
There’s high turnover and I would imagine that NYC is less seasonal than other tourist destinations relying on sun and fun; a fair amount of travel is business, a fair amount of destinations are indoors, and New York also has notable things to do during the fall and winter period, which is the slow season for most other destinations.
Vegas and Orlando have a lot of rooms but are also highly seasonal, and there are definitely off periods with lots of deals. Also unlike Vegas or Orlando New York has a lot of hotels in surrounding areas as well; hotels in New Jersey are not included in this number, but there are a bunch between EWR and Manhattan.
I assume both the 87% hotel occupancy and 20% airbnb occupancy are much higher on weekends or special days, for instance. Pretty easy to see how prices will rise in select areas and many days.
- You need a "long term" stay, like 3-6 weeks. When I travel over seas, I usually stay in a single city for at least 3 weeks. Having an AirBnB makes sense. I don't need daily cleaning and having a kitchen is great!
- You need a full house for a family gathering.
Neither of these compete with hotels.
Granted, there were options for these types of stays before AirBnB (VRBO and private listings), but AirBnB elevated these.
Where are you staying? That has not been my experience with any Airbnb in the last 5 years. I’ve stayed in airbnbs in New York City, San Francisco, Berkeley and Corvallis. It costs as much as a hotel, often misleading about having a “whole house” (they also rent the basement), and having a list of check out chores in addition to a cleaning fee.
It’s been the case for me every time I’ve traveled to Europe in the past few years, including this year. I’ve routinely gotten great Airbnb rooms in major cities (including several capitals) with creative designs, central locations, plenty of space, and amenities (kitchen, washer, etc.), all for 25-50% cheaper than a hotel room lacking most of those traits.
I haven’t been to America in quite a few years, but 10ish years ago a private room in an Airbnb was cheaper than a hostel in NYC.
I’m currently in Poland and I’m renting an entire apartment on Airbnb for less than a bed in a hostel, let alone a hotel. Anywhere in Europe a room in an Airbnb seems to be on par with the price of a bed in a hostel.
They weren't more expensive before Airbnb. If they do get more expensive now, that'd be Airbnb's doing, in the sense that they might have forced hotels to reduce capacity to offset the traffic diverted to Airbnb.
But honestly, I'm skeptical. You have something like 60+ million people visiting NYC every year. Airbnb's inventory was tiny in comparison to that. Also, tourism absolutely cratered during COVID and hasn't fully rebound yet, so there's likely plenty of spare capacity.
> doubt hotels will get more expensive as they still have to compete with each other
They already have, by double-digit figures [1]. Both in terms of rates and average revenue per room.
There are a lot of hotels in New York. But within each lodging category, in each neighbourhood, it’s more limited. During marquee events (UN, fashion week, et cetera) or the holidays, a given set of hotels have a virtual oligopoly, as the alternative is hoofing it from New Jersey.
You don't need to doubt, simply check booking.com: hotels are already more expensive. It's practically impossible to find anything half decent on Manhattan below 350USD/night. Before, AirBnbs (and hotels), there were many sort of half decent options around ~250.
Meanwhile, office rental space are in trouble, such an irony.
Also, while this may not apply to NYC, I will never ever book hotels on a long term basis but apartments because I just don't want to eat out but instead feel at home with kitchen etc. Airbnb or booking.com flats are my go to option wherever I go. Again, not particularly relevant for NYC simply because it was already too expensive to stay there for an extended amount of time.
Agreed, as someone who needs to travel a lot worlwide, in cities where the hotel business is very active airbnb is systematically terrible. It might be cheaper, but you will wish you spent the extra bucks.
Its been a long time since I used AirBnB, but when I started, basically everyone lived at the home we were going to. You went into someone's actual home, actually decorated, with recommendations from people who actually live there.
Now, you didn't have 100% privacy, but back then, I just wanted a cheap place to stay.
Since then, AirBnB are just commercial properties.
I would imagine theres a body of research on this. But I would be surprised if Air BNB didn't put downward pressure on hotel prices - as more supply creates greater competition. I'm thinking of the "southwest effect" where entry of a low cost airline to a market leads to overall lower ticket prices across airlines serving that market. (even though incumbent airlines were already competing).
I have the same negative perception of AirBnBs in New York. I think the city also encourages hustler types, or people that are plugged in with local polls, who get away with everything they can.
You don't need to be a hustler or plugged in with local polls to get away with running a shoddy AirBnB, the site will happily let you do it and the space is completely unregulated.
Can confirm— stayed in a flat in Brooklyn and it was gross. Bathroom worked but the kitchen was full of roaches. Anything not sealed had to go straight in the fridge.
I rented a unit in a prewar in Hell’s Kitchen. The basement and trash chutes were roach infested. I had to go through absurd lengths to not get a roach infestation in my apartment. Taking out trash every night (into a roach infested chute), never keeping any cardboard lying around, caulking all gaps around (a surprising number of) pipes, plugging drains at night, applying bait and IGR every once in a while, having monthly exterminator visits (if the guy ever showed up), and then spraying a special insecticide I got every other week.
Even then, I used to occasionally see roaches in my unit. I can’t imagine what it’s like when you have an AirBnb with some very transient tenants and no pest control.
These effects are not required to occur in equal amounts, however. 40,000 units is a much larger proportion of the short-term rental stock than of the total NYC area housing stock.
Of course they'll have a much larger effect on hotel price than rental price. Hotels have more elastic demand (people can visit other places) and less elastic supply (building new hotels is effectively banned under NYC law).
The supply is lower now. The demand is the same. The prices must go up from the people competing for the smaller number of rooms.
This is also why it caused rents to rise.
Except it hasn't. Hotel prices are the same today in NY as they were when Airbnb was going full blast. Again, NYC has always had excess hotel inventory. There is no shortage that would effect pricing. You can check right now on Expedia and see that prices are roughly the same as last year and the year before that.
Supply and demand. Fewer AirBnB's mean more will use hotels who will otherwise use AirBnB, leading to hotels increasing their prices, even though they compete with each other.
That being said, I tried Airbnb in NY a few times and it was absolutely disgusting. In most places Airbnbs will be a bit dirtier than a hotel but in NY it wasn't even close. Rats, cockroaches, showers that don't drain, grime everywhere... After a few experiences like that I was out. Hotels in NY offer a much better experience.