The Hotel Industry Agenda: Punish the middle class

Airbnb has long believed that for us to win, no one has to lose. Even as more people share their homes, traditional hotels continue to take in robust or even record profits. Home sharing helps more people travel and that should be good news for everyone.

Some hotel industry officials disagree. We recently learned new information about the hotel industry’s multimillion-dollar efforts to protect their profits by attacking our host community. The internal documents are clear: the hotel industry has a plan to short-sheet the middle class.

The hotel industry is attacking middle class people who share their homes for two simple reasons:

The hotel industry wants to keep price gouging consumers.

Today’s New York Times reported “Airbnb has brought hotel pricing down in many places during holidays, conventions and other big events when room rates should be at their highest and the industry generates a significant portion of its profits, said Vijay Dandapani, chief executive of the Hotel Association of New York City, which works with the American Hotel and Lodging Association.”

This isn’t the first time hotel officials have expressed their concerns. On conference calls and in high-level meetings, hotel executives have raised concerns about Airbnb limiting their ability to price gouge consumers on so-called “compression night” — nights when hotels are at capacity.

In an earnings call in July 2015, Pebblebrook Hotels CEO, Jon Bortz, said his company used to have an “ability to price at maybe what the customer would describe as sort of gouging rates,” but, because of Airbnb, hotels have “lost a lot of that ability at this point.”

In December 2016, Laurie Paugh of Marriott lamented the fact that they “don’t get as much ability to really press pricing as much as we’d like” for leisure events because “we’ve got less demand compression because of Airbnb.”

It’s no surprise that hotel executives are concerned. The average price of an Airbnb listing on New Year’s Eve in popular cities was hundreds of dollars less than a typical hotel room.

All figures rounded to the nearest dollar. Hotel Average Daily Rate purchased from STR, Inc.

The hotel industry is concerned about losing ground with millennials.

As the travel and hospitality market continues to expand, Millennials and Generation Z have been quick to embrace home sharing. Census data indicates that Millennials and Gen Z will comprise 76% of the key demographic of consumers – 18- to 49-year-olds – by 2025. Based on our internal research, these consumers have an overwhelmingly positive view of Airbnb. Millennials already account for roughly 60 percent of all guests who have ever booked on Airbnb, and the number of Millennials who have booked on Airbnb has grown more than 120 percent in the past year.

The big hotels have responded to this changing landscape with a plan to eliminate competition and protect their profits by punishing the middle class. Their anti middle-class agenda includes:

A multimillion-dollar campaign against home sharing.

At a recent board meeting, the American Hotel and Lodging Association (AH&LA) laid out their plan to to spread misinformation about our host community in an effort to stop people from sharing their home.

Convincing cities to leave millions of tax dollars’ worth of revenue on the table in order to protect their own bottom line.

The Airbnb community wants to pay taxes, but hotel officials are actively lobbying cities to not work with Airbnb to collect taxes from our community. The New York Times noted that “In some markets, the [American Hotel and Lodging Association] said, Airbnb is dodging payment of local lodging taxes. In other places, it encouraged officials not to collect taxes from Airbnb hosts so as not to legitimize short-term rentals.”

Pay for Play “research.”

While many academics and experts are working to learn more about home sharing and the sharing economy, the hotel industry plans to pay for misleading research from individuals associated with different academic institutions.

Sadly, the hotel industry plan to fight the middle class isn’t new. For years, hotel officials and their leaders have been fighting efforts to raise the minimum wage, and strenuously opposing efforts to protect their workers. The latest campaign to punish middle class people who share their homes is just more of the same.  

Read it yourself, correcting the record.

We hope you’ll read the hotel industry agenda for yourself. If you’re an Airbnb host and don’t like what you see, join a Home Sharing Club and speak out. In addition to bringing hosts and guests together, Home Sharing Clubs help ensure that community leaders hear the truth about Airbnb, not the hotel industry’s spin.

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