88m3
Fast Money & Foreign Objects
By
Laura Kusisto
connect
Oct. 21, 2013 9:30 p.m. ET
Airbnb Inc. has long cast itself as a funky website facilitating informal apartment rentals to vacationers, but faced with a battle in New York state, it is employing a more old-school tool: economic data.
The company is set to release a study on Tuesday saying that its services generated $632 million for New York City's economy last year. It said it did so by attracting visitors who couldn't otherwise afford hotel rooms, making it possible for them to stay longer and allowing them to spend more money on food and shopping, rather than blowing their budgets on hotel rooms.
Enlarge Image
"It's really important to understand that this isn't a weird underground activity that a couple of hundred of people are doing," David Hantman, Airbnb's global head of public policy, said of the company's service. "It makes sense to make this safe and transparent by taxing it and moving forward with something that's working really well," he said.
New York City is currently Airbnb's biggest market, attracting 416,000 visitors between August 2012 and July 2013, according to the study conducted by HR&A Advisors for Airbnb.
Airbnb enables users rent their apartments to visitors on a short-term basis. The company has said the service is primarily used by people looking to make some extra money or struggling artists making extra cash by renting a spare room.
But critics say that the service is being used by companies that push out residential tenants to turn apartments into more lucrative hotel units.
Airbnb has come into conflict with a 2010 New York state law prohibits people from renting their apartments for fewer than 30 days if the occupants aren't also present.
An escalating feud between Airbnb and the New York hospitality industry could have widespread repercussions for Airbnb throughout the U.S. and for the lodging industry in general as the feisty startup continues to win business. Travel-guide creator Pauline Frommer joins the News Hub.
Related
New York state Attorney General Eric Schneiderman subpoenaed Airbnb earlier this month for information about 15,000 New York-area members who rent out spaces to determine if they are paying a New York hotel tax.
The hotel industry, which generated $493 billion in tax revenue in 2012, said it is hurt by Airbnb.
Lisa Linden, a spokeswoman for the Hotel Association of New York City, a trade group, said that hotels "are terrific employers and often provide entry level positions for people looking to enter the workforce in New York."
Airbnb said that while the company's hosts aren't hotels, it makes sense for them to pay an occupancy tax, with limited exemptions for those who earn under certain thresholds.
The Airbnb study found that the service's users spend money around the city that they would otherwise have spent on hotels. Airbnb guests on average stayed for 6.4 nights and spent $420 on accommodations and a total of $880 during the day, according to the study.
Hotel guests typically stayed for 3.9 nights, spending $535 on accommodation and $695 during the day.
Airbnb officials said they are also helping entice tourists away from Times Squares to places such as Harlem, Long Island City and Park Slope, where they spend money at independent coffee shops, local grocery stores and small boutiques.
Twenty-eight percent of Airbnb users stayed in Brooklyn and 4% stayed in Queens, according to the study, which surveyed 680 guests and 619 hosts who responded to a survey. The study estimated, for example, that visitors spent $14.5 million in Bedford-Stuyvesant last year, on accommodations and local businesses.
Critics said that if tourists want to appreciate the Upper West Side, the solution is to build more affordable hotels there—not to create unregulated vacation accommodations.
"They are subjecting tenants to unknown people coming and going through their apartment buildings, often engaging in late-night loud behavior that may or may not be OK in a hotel," said Assemblyman dikk Gottfried, who represents Manhattan's prime Midtown hotel area.
The service also provided a boost to a key New York demographic of freelance writers and graphic designers.
The study found that 23% of Airbnb hosts are freelancers and that 11% are supporting themselves while launching a business.
"This is the new workforce. People do some work by gigs, writing, being acupuncturists and also letting out their homes. All of these components are making up a career now," said Sara Horowitz, founder and executive director of the Freelancers Union.
http://online.wsj.com/news/articles/SB10001424052702303448104579149844259343658
Laura Kusisto
connect
Oct. 21, 2013 9:30 p.m. ET
Airbnb Inc. has long cast itself as a funky website facilitating informal apartment rentals to vacationers, but faced with a battle in New York state, it is employing a more old-school tool: economic data.
The company is set to release a study on Tuesday saying that its services generated $632 million for New York City's economy last year. It said it did so by attracting visitors who couldn't otherwise afford hotel rooms, making it possible for them to stay longer and allowing them to spend more money on food and shopping, rather than blowing their budgets on hotel rooms.
Enlarge Image
"It's really important to understand that this isn't a weird underground activity that a couple of hundred of people are doing," David Hantman, Airbnb's global head of public policy, said of the company's service. "It makes sense to make this safe and transparent by taxing it and moving forward with something that's working really well," he said.
New York City is currently Airbnb's biggest market, attracting 416,000 visitors between August 2012 and July 2013, according to the study conducted by HR&A Advisors for Airbnb.
Airbnb enables users rent their apartments to visitors on a short-term basis. The company has said the service is primarily used by people looking to make some extra money or struggling artists making extra cash by renting a spare room.
But critics say that the service is being used by companies that push out residential tenants to turn apartments into more lucrative hotel units.
Airbnb has come into conflict with a 2010 New York state law prohibits people from renting their apartments for fewer than 30 days if the occupants aren't also present.
An escalating feud between Airbnb and the New York hospitality industry could have widespread repercussions for Airbnb throughout the U.S. and for the lodging industry in general as the feisty startup continues to win business. Travel-guide creator Pauline Frommer joins the News Hub.
Related
New York state Attorney General Eric Schneiderman subpoenaed Airbnb earlier this month for information about 15,000 New York-area members who rent out spaces to determine if they are paying a New York hotel tax.
The hotel industry, which generated $493 billion in tax revenue in 2012, said it is hurt by Airbnb.
Lisa Linden, a spokeswoman for the Hotel Association of New York City, a trade group, said that hotels "are terrific employers and often provide entry level positions for people looking to enter the workforce in New York."
Airbnb said that while the company's hosts aren't hotels, it makes sense for them to pay an occupancy tax, with limited exemptions for those who earn under certain thresholds.
The Airbnb study found that the service's users spend money around the city that they would otherwise have spent on hotels. Airbnb guests on average stayed for 6.4 nights and spent $420 on accommodations and a total of $880 during the day, according to the study.
Hotel guests typically stayed for 3.9 nights, spending $535 on accommodation and $695 during the day.
Airbnb officials said they are also helping entice tourists away from Times Squares to places such as Harlem, Long Island City and Park Slope, where they spend money at independent coffee shops, local grocery stores and small boutiques.
Twenty-eight percent of Airbnb users stayed in Brooklyn and 4% stayed in Queens, according to the study, which surveyed 680 guests and 619 hosts who responded to a survey. The study estimated, for example, that visitors spent $14.5 million in Bedford-Stuyvesant last year, on accommodations and local businesses.
Critics said that if tourists want to appreciate the Upper West Side, the solution is to build more affordable hotels there—not to create unregulated vacation accommodations.
"They are subjecting tenants to unknown people coming and going through their apartment buildings, often engaging in late-night loud behavior that may or may not be OK in a hotel," said Assemblyman dikk Gottfried, who represents Manhattan's prime Midtown hotel area.
The service also provided a boost to a key New York demographic of freelance writers and graphic designers.
The study found that 23% of Airbnb hosts are freelancers and that 11% are supporting themselves while launching a business.
"This is the new workforce. People do some work by gigs, writing, being acupuncturists and also letting out their homes. All of these components are making up a career now," said Sara Horowitz, founder and executive director of the Freelancers Union.
http://online.wsj.com/news/articles/SB10001424052702303448104579149844259343658
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