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New York’s Airbnb Ban Is Causing a Christmas Crunch

Hotel prices and tourism numbers are up as New York City goes through its first holiday season with new rules that ban nearly all Airbnbs and other short-term rentals.

People ice skating in park surrounded by highrise buildings

People ice skating at Central Park in New York City on December 16, 2023.Photograph: Liao Pan/Getty Images

Christmas is in full swing in New York City; lines snake through Midtown as tourists oggle department store windows and the Rockefeller Center tree, and the Union Square Holiday Market is bustling with vendors and shoppers. All the while, hotel prices are up and vacancies down compared to the 2022 holiday season—and there are almost no short-term rentals, like Airbnbs, for people to book.

It’s too soon to say there’s no room at the inn this holiday season—searches on Airbnb for places to stay during Christmas and New Year’s Eve in New York City bring up hundreds of hotel rooms, rooms in apartments, and rentals claiming to be exempt from new rules in the city. But many of the short-term whole apartment rentals that Airbnb was known for are gone.

With short-term rentals all but banned, early data shows hotel rooms are getting pricier and harder to come by. New York City’s new short-term rental regulations, which took effect in September, are among the most restrictive of any large city in the world. Such restrictions haven’t stopped people from visiting the Big Apple—and this holiday season is a major test of the city’s new rules.

The city’s clampdown on Airbnbs and other short-term rentals seems to be part of what’s sending interest in hotels soaring. Searches for hotels in New York City during the last two weeks of December are up 25 percent year over year, according to data from Expedia Group, which is also the parent company of Vrbo, another short-term rental booking platform. Times Square hotels in particular are up 55 percent in searches, and neighborhoods like Chelsea, Central Park South, Union Square, and Herald Square are all also seeing spikes.

Hotel bookings and prices are inching upward, too. In November 2022, 79 percent of hotel rooms were occupied, with an average cost of $307 a night according to CoStar, which tracks commercial real estate intel. But in November 2023, occupancy climbed to 84 percent, and the average nightly cost hit $333. By the first week of December, occupancy jumped to 90.3 percent, up from 89.6 percent in early December 2022. The average nightly cost swelled from $416 to $477 from December 2022 to December 2023.

It’ll only get busier. Some 64.5 million people are predicted to visit in 2024, according to New York City Tourism + Conventions, the city’s official tourism marketing organization. That’s up from a forecasted 61.8 million this year. This year’s tourism numbers didn’t top records set in 2019, but they got closer, showing that people are returning to travel at near pre-pandemic levels.

The disappearance of short-term rentals may disproportionately affect guests that don’t fit in a small New York hotel room, like families with kids. “Those people are either having to pay up for more expensive hotel offerings that are comparable to Airbnb, or are simply not able to visit the city,” says Sean Hennessey, a professor at the New York University Jonathan M. Tisch Center of Hospitality.

That’s what happened to Mia Heil, who is bringing her family of five to New York City from Houston the week between Christmas and New Year’s. She had booked a three-bedroom apartment on Airbnb and didn’t know about the rule change until the host canceled their stay the following day. Because they already had flights, Heil says she scrambled to find a hotel room that could fit the family. The effective end of Airbnb in the city doesn’t mean her family wouldn’t have visited New York, Heil says, but she might have come at a different time when hotel prices were lower.

Hennessey says the registration law may be just part of what’s driving prices up. Some people might be traveling for the first time post-pandemic. The city is also now housing thousands of migrants in hotel rooms—though many remained open to visitors this summer.

Airbnb allowed stays through December 1 to remain booked as part of a grace period, so this month is the first one where people are truly pushed to find other places to stay. “Visitors to New York City have fewer accommodation options due to the rule change, which means less choice and higher prices” says Taylor Marr, housing market economist at Airbnb. “As a result, many tourists could be priced out of visiting the city, especially during peak periods such as the holiday season, resulting in economic loss for local workers and businesses.”

The registration law was meant to crack down on a proliferation of short-term rentals in New York City, many of which had long been banned by a rarely enforced law. Those in favor of the rule say short-term rentals siphon away housing that could go to full-time residents and lead to rising rent costs. At one point in 2022, there were more listings for Airbnbs than there were apartments for long-term lease in New York City.

But opponents argue that it bans not only big-time landlords but also middle-class city residents who are renting out just one unit to make ends meet. Both hosts and booking platforms like Airbnb and Vrbo who violate the rule by listing unregistered properties can face fines. The number of short-term stays, those for fewer than 30 days, fell from some 22,000 this summer to around 3,700 as of November 1, according to Inside Airbnb, a housing advocacy group that tracks the platform. The number of short-term stays has always been dwarfed by hotel rooms, of which New York City has around 128,000, according to Vijay Dandapani, president and CEO of the Hotel Association of New York City. Dandapani says 15,000 of those rooms are housing migrants, and another 7,000 are closed.

As of Monday, the city’s Office of Special Enforcement, which oversees the short-term rental registrations, has received more than 5,000 applications from hosts, granted 971, denied 732, and sent more than 2,000 back to applicants for additional info. Christian Klossner, the office’s executive director, tells WIRED that the office has not issued any fines to those in violation of the registration law yet, as the city is still working with booking platforms on compliance.

To cope with the ban, some hosts are moving away from platforms like Airbnb and instead listing apartments on sites like Craigslist and in Facebook groups, and on alternative rental platforms such as Houfy. Some advertise their stays for Christmas and have weekly rates. One asks people to provide an Airbnb profile with guest reviews when requesting to book.

Ultimately, the short-term rental rule is good business for hotels—even if the jury is out on it being a good thing for New Yorkers. And some of that current occupancy squeeze may lessen in coming years: More than 70 new hotels are expected to open in the city in the next three years, bringing 10,000 additional rooms, according to New York City Tourism + Conventions. The end of Airbnb in New York doesn’t signal the end of tourism, but it’s already looking pretty different.

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Credit belongs to : www.wired.com

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