More Than Just Hot 'Air': A Legal View Of Short-Term Home-Sharing
By William A. Brewer III Managing Partner, Brewer, Attorneys & Counselors | December 30, 2018
For the last decade, Airbnb and the cadre of other home-sharing services have disrupted segments of the hotel industry, threatening to flip the script on market supply. Now, these services are poised for further growth, particularly within the super-luxury segment. In fact, home-sharing services are most popular among college graduates and Americans with higher incomes, according recent survey data from the non-profit Pew Research Center.
Take one listing featured on HomeAway.com---a 5-bedroom, 8-bathroom townhouse in New York City's Hell's Kitchen neighborhood. It boasts of Prima Callacatta marble, radiant heat floors, an oversize Jacuzzi tub, and a Japanese commode. The cost: as much as $20,000 a night---with a two-night minimum stay required.
Today, home-sharing is big business---reaching far beyond the shadow of Times Square. Owners of vacation homes, which traditionally sat vacant for months at a time, are now able to generate revenue in ritzy enclaves like Palm Beach or the Caribbean. After all, who wouldn't want on-site catering shaking a martini for you next door to Sean Connery in the Bahamas' Lyford Cay?
Of course, the challenge is that hotels---in the above examples, The Breakers or Four Seasons Ocean Club---are suffering lost business from would-have-been guests to an unforeseen source of competition when those projects were built. For the hospitality industry, the prospect of an overabundance of supply and a cascading effect on pricing and demand is chilling.
The proliferation of home-sharing has not only pitted global hotel chains against homeowners. It also has pitted major metropolitan cities against multi-billion-dollar tech interests, and with a measure of irony, against the property-tax-payers who use those services. Predictably, these economic collisions have given rise to intense lobbying efforts in city halls and state houses from coast to coast.
The Hotel Business Review articles are free to read on a weekly basis, but you must purchase a subscription to access
our library archives. We have more than 5000 best practice articles on hotel management and operations, so our
knowledge bank is an excellent investment! Subscribe today and access the articles in our archives.