Airbnb CEO: New York City hotels will get more expensive after short-term rental crackdown

02.10.2023 - 19:13 / thepointsguy.com / Summer Olympics / Brian Chesky / Christopher Nassetta

The head of Airbnb, the world's largest vacation rental platform, issued a warning to travelers considering a trip to New York City over the next year.

Hotels are likely to get more expensive following what the company describes as a "de facto ban" on Airbnb in the largest city in the U.S., Airbnb CEO said last week at the Skift Global Forum in New York City.

"I was always hopeful that New York City would lead the way and that we would find a solution in New York," Brian Chesky said. "Unfortunately, New York is no longer leading the way. It's probably a cautionary tale."

New York City represented most of Airbnb's business about 14 years ago. That's no longer the case, and Airbnb now has its largest footprint in Paris. The company estimates its Parisian presence will grow even larger in the run-up to next year's Summer Olympics in the French capital.

Back in the U.S., it doesn't appear the company is getting as much of a welcome from various city governments. The New York City restriction on Airbnb limits stays to two guests and requires the host to be present in the rental for stays shorter than 30 days. The measure is believed to have eliminated as many as 15,000 — or about 70% — of Airbnb's listings in New York City, Wired reported using data from housing advocacy group Inside Airbnb.

That's bad news for travelers, per Chesky.

"I think the consequence of this is going to be that next year hotel rates will be more expensive, and the reason why is we're not going to be building 20,000 more hotel rooms," he added. "So, it's going to be more expensive to stay in New York, and I think that's unfortunate."

It's too early to determine if the Airbnb restrictions are the main culprit of higher hotel rates in New York City. While the city has seen rate surges in the weeks following the loss of so many listings, hotel data provider STR chalks this up to events in the city like New York Fashion Week, the U.S. Open and the United Nations General Assembly.

Regarding the Airbnb crackdown in New York City, Chesky didn't fully point the finger at the hotel industry. But he did indicate he felt there was some involvement by its lobbying groups.

"I'm not an expert on that, and obviously they wouldn't tell me how much and how involved they were," he said. "I think that they were absolutely, you know, at the table."

But Chesky, like Hilton CEO Christopher Nassetta earlier in the week, indicated there's a difference in clientele and travel purpose at Airbnb compared to hotels.

Roughly half the nights booked off Airbnb are for stays longer than a week, and 80% of stays booked on the platform entail more than two guests traveling together, Chesky said. Travel styles like that are more conducive for a stay at a vacation