Airbnb Comes Up Short In New York Ruling

06.12.2023 - 04:30 / skift.com / Srividya Kalyanaraman

A New York state court judge dismissed an Airbnb lawsuit against New York City, ruling the city had a right to require host registration and licenses, and that it was reasonable to require that Airbnb — and other platforms — verify that listings have licenses, or face penalties.

In Airbnb’s June lawsuit to block the enforcement of Local Law 18, it argued the rules were oppressive, and the registration requirements so burdensome as to amount to a de-facto ban on short-term rentals in the city.

Airbnb said it generated $85 million in revenue from the Big Apple in 2022, and a big chunk of that is at risk as the enforcement measures take effect September 5.

While some might argue the ruling is a victory for neighborhoods — the city received nearly 12,000 complaints from 2017-2021 — and a loss for short-term rental platforms, what’s clear is that it will crush the hopes of many tourists hoping to visit the city on the cheap. Airbnb has around 80,000 reservations on the books in the city for September 5 and later.

The ruling may give momentum to other cities that are likewise instituting short-term regulations. Many companies in the sector state that they are open to regulations — as long as they are reasonable. 

Airbnb is believed to be evaluating the ruling to see if there are grounds for appeal.

Occupancy is down, losses are mounting, and the company announced another round of layoffs last month. Despite this, the luxury hospitality brand Inspirato has a few wins: a new partnership forged with Capital One, a rewards program and other revenue-boosting measures like slashing prices and advanced booking discounts for members. 

For the quarter ending June 30, the Denver-based company posted a consolidated net loss of $47 million; its revenue totaling $84 million remained flat compared to last year. 

CEO Brent Handler told shareholders that in addition to the reduction in its portfolio and weaker occupancies, the headwinds for the quarter were travel demand leaning towards urban travel, an area that is not the company’s strong suit. 

“The high-end, traditional vacation rental markets were down this summer, more than I have ever seen,” Handler said. “Nantucket, Rosemary Beach in Florida, Malibu, Hilton Head Island in South Carolina —  this is where the bulk of our inventory is, and they have to do well for us.” 

More than two years after the Miami oceanfront condo tower collapse, Fannie Mae and Freddie Mac, have implemented stricter regulations for condo and co-op loans. These rules involve refraining from purchasing loans for condo units within projects that have postponed significant repairs or have been directed by local authorities to address hazardous conditions. Recently, the agencies made these rules