Many Airbnb users with bookings in New York City this Christmas are scrambling to find new accommodations.
The company announced plans to cancel and refund bookings for stays after Dec. 1, according to the Associated Press, after long-planned regulations aimed at curbing illegal short-term rentals in the city went into effect on Sept. 5.
The regulations, which caused an uproar among travelers and short-term rental owners, require hosts be present for stays of less than 30 days, with no more than two people staying in a dwelling at a time. Hosts must also register and get approval from the city — or both hosts and booking sites may be subject to hefty fines.
The travel industry website Skift estimates Airbnb short-term listings in New York City dropped 77% from June 4 to Sept. 10, likely sending many in search of new accommodations.
“Over the past week, we’ve seen the strongest booking pace for the forward six-month period than we’ve seen at any time going back to 2015,” Kevin Davis, CEO of JLL Hotels & Hospitality’s Americas, told “Squawk Box Asia” Monday.
“In addition, if you look at Google searches, just over the past week for New York City hotels, those are up 24%, relative to the past 60-day period,” he said. “We’re seeing a tremendous amount of interest in people staying in New York City hotels.”
NYC hotel rates to go up
New York City has more than enough hotels to meet traveler demand, according to Davis. He mentioned an unprecedented supply of new hotel rooms in the city, with 10,000 new hotel rooms delivered since 2020 and another 10,000 expected to be delivered in the next couple of years. Despite this, he predicts that hotel rates will rise as most short-term rentals are no longer available.
Davis advises travelers to make reservations for New York City hotels sooner rather than later, as prices are likely to increase. He also mentions that airfares in the United States have dropped, further boosting travel demand.
Knock-on effect
While cities around the world have regulated short-term rental markets, the regulations in New York City are more extensive, leading to concerns that other cities may adopt similar measures. Davis believes that other cities will likely wait to see the outcomes and enforcement of New York City’s regulations before passing similar legislation.
What we’re seeing in the short-term rental space now is, frankly, a correction.
Kevin Davis
CEO, JLL Hotels & Hospitality’s Americas
Davis also mentions that stricter short-term housing rules are being considered in other cities in the United States, as well as in places like Florence, Italy and Melbourne, Australia. He explains that the current decrease in short-term rental demand is a result of the correction in the market after a surge in demand during the pandemic.
CNBC’s Chiew Tong Goh contributed to this report.
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