Airbnb and New York’s Recovery Should be Synonymous

New York City aerial view

Even with the hope of federal aid streaming to New York, the state will need to make up a significant budget shortfall due to the effects of the COVID-19 pandemic on the state’s economy. The Governor’s recognition of the opportunity and need to tax some short-term rental platforms in his proposed budget is an important step and one which Airbnb supports. In fact, we have supported legislation that includes this type of tax collection since 2016.

However, we see the Governor’s proposal as one part of a bigger equation when it comes to short-term rentals helping the state recover. Once it is deemed safe, the quick return of tourism to New York City will help create and sustain jobs across multiple sectors including restaurants and theaters, while putting needed money in the pockets of everyday New Yorkers.

New York City welcomed 66 million visitors in 2019, generating $70 billion in revenue and helping to support an estimated 400,000 jobs in the city’s many restaurants, theaters and other attractions.1 In 2020, it is estimated that New York City saw at least two-thirds fewer visitors as the pandemic shut down travel2

The effects of the loss of tourism cannot be understated, with the forced closure of tourism-reliant businesses and the associated loss of thousands of jobs in New York City. In December 2020, New York City’s unemployment rate remained in double digits and well above the national average.3 

Some have said New York’s recovery is a distant mirage. At Airbnb, we know better. We’ve seen our Hosts step up to help their fellow New Yorkers in a time of crisis, from opening their homes to displaced residents after Superstorm Sandy, to helping us partner with 1199SEIU and other organizations to house frontline workers during the pandemic. And we have seen the calls of New York’s demise proven wrong time and time again. 

Make no mistake, New York City remains a bucket-list destination for people from across the country and around the world. As the world looks toward a return to travel, Airbnb looks forward to doing our part to build a safe, sustainable, authentic model for tourism in 21st century New York by helping to quickly restore tourism and tax revenues. 

As our recent consumer polling tells us, there is pent-up demand for travel as people yearn to get out of the house and connect after months of pandemic-caused isolation, and the type of meaningful travel enabled by Airbnb is the kind of travel people will continue to seek even after the pandemic ends. 

Further, Airbnb has provided a critical and urgent social safety net to help many Hosts stay economically afloat in these unprecedented times. According to our recent report, among New York State Airbnb hosts with a single listing, 4,000 welcomed their first guests since the pandemic started. These 4,000 new Hosts have collectively made more than $36 million. 

By amending its law to further allow New Yorkers to share their space, the Empire State can boost its tourism recovery and set an example for the world on how to safely and sustainably rebuild a travel economy.

Airbnb Guests Drive Economic Impact4:

Of the $2.2 billion in Airbnb guest spending in New York City in 2019, more than $750 million is estimated to have been spent in the city’s restaurants. Of the data we collected, this represents the highest amount of Airbnb guest spending in restaurants anywhere in the world. 

At that time, there were more than 23,400 restaurants in New York City supporting nearly 318,000 jobs. Late last year, it was estimated that up to one-half of all restaurants operating in New York City could close due to the pandemic, which would possibly affect as many as nearly 160,000 jobs.5

With the pace of vaccinations increasing and the Centers for Disease Control and Prevention (CDC) loosening guidance on gatherings for fully vaccinated people, tourism fueled by Airbnb might help these restaurants and their employees get back on their feet through widespread economic impact. Airbnb keeps more of the economics of travel in the communities where it happens. Nearly 40 percent of the Airbnb guest spending in New York City happens in the neighborhood where they are staying. 

We estimate that more than $437 million was spent on entertainment in New York City in 2019, such as at theaters, concerts and other attractions. The artist community has also been disproportionately affected by the pandemic. An April 2020 survey by Americans for the Arts reported that 62 percent of artists have become unemployed, and an Oxford Economics study found that 95 percent of creative workers have experienced income loss in the US alone. 

Artists have long used Airbnb to supplement their income, whether through hosting or the Airbnb Experiences platform. During the pandemic, we launched Online Experiences, allowing people to digitally monetize their unique experiences and in November 2020, we partnered with Broadway and Westend actors and numerous other artists around the world to highlight their unique Online Experiences on the platform. 

We hope to help New York drive tourism that puts money back into the pockets of its vibrant arts community. 

Tax revenue when it is needed most

The benefits of the short-term rental economy go far beyond the tourism dollars spent in New York City’s establishments. In fact, by enhancing tax collection from the short-term rental economy, every New Yorker can benefit from this industry. Airbnb has long supported legislation that includes mandatory tax collection for all short-term rental platforms, helping to bolster New York’s revenue. 

All states neighboring New York have tax collection in place with Airbnb and other platforms at the state level including: Connecticut, New Jersey, Maine, Pennsylvania, Rhode Island, New Hampshire and Vermont.

While tax collection and remittance by some short-term rental platforms have been included in the Governor’s proposed budget as a revenue-building measure, the state could further close its budget deficit and avoid cuts to social services by modernizing home sharing regulations in New York City. 

The current proposal projects vacation rental taxes would generate $10 million next year and $18 million annually after that across all platforms. This pales in comparison to what the city and state government could have collected from Airbnb had it been allowed to collect and remit on behalf of our Hosts (an estimated $130M in 2019 alone).

Jurisdiction Taxes Included Projected Revenue6
New York City  Hotel Room Occupancy Taxes State Administered City Sales Tax $75,400,000
New York State New York State Hotel Unit FeeNew York State Sales Taxes  $43,800,000
New York Counties State Administered Local Sales Taxes  $10,4000,000
Total $129,600,000

What this revenue means for NYC

With more than $75 million in additional tax revenue, New York City could help offset cuts made in last year’s budget, including: 

  • $15 million cut for arts education services in middle schools and high schools in the city 
  • $65 million cut from the Fair Fares program, which subsidizes mass transit for low-income New Yorkers
  • More than $75 million cut for the Summer Youth Employment Program 

What this revenue means for NYS

With more than $43 million in additional tax revenue, New York could: 

  • Almost eliminate the proposed cut to The State University of New York ( $46 million)
  • Full restoration of proposed funding cuts to New York’s libraries ($22.5 million)
  • Prevent cuts in services to individuals with developmental disabilities and special needs ($31.25 million)
  • Full restoration of proposed funding cuts for Aid & Incentives to Municipalities (AIM) for cities – which mostly funds local government personnel such as firefighters, police officers, school crossing guards and park staff.

What this revenue means for New York’s counties

Unlike other short-term rental platforms, Airbnb has proactively signed voluntary tax collection agreements with 34 of New York’s 62 counties to collect their local bed taxes. In 2019 alone, Airbnb collected and remitted approximately $3.3 million of these taxes to New York counties.

The proposed legislation would extend mandatory accommodation tax collections across all counties by all platforms, bringing additional funds to counties that already have agreements with Airbnb and bringing a new source of critical, sustainable revenue to other counties. 

This additional tax revenue could help offset the 10 percent reported decline in 2020 sales tax collection7, which is essential to maintaining crucial government services relied upon by the communities.

Hosts rely on Airbnb income: 

In New York City, many Airbnb Hosts use the income they earn through hosting to pay important bills. According to surveys of our New York City Host community: 

  • 51 percent rent out space to help make ends meet 
  • 46 percent say the money earned renting out their space in the last year helped them avoid eviction or foreclosure 

Additionally, our New York City Hosts come from diverse professional backgrounds: 

  • More than 20 percent of New York City Hosts work in education 
  • Nearly 10 percent of Hosts work in health care
  • Nearly 5 percent work in arts, entertainment and recreation

Airbnb data shows 53% of the new Airbnb Hosts in New York City with only one listing and who welcomed their first guests during the pandemic, are women. These new women Hosts have collectively earned nearly $3.5 million in income since March 2020. 

The time for sensible STR laws in NYC is now

For years, Airbnb has been committed to working with New York officials and our Host community to find a path forward for home sharing from Buffalo to Brooklyn. As New York and its residents look toward a strong recovery, it is more important than ever for Airbnb Hosts in New York City to have clear and fair rules for sharing their homes. Outdated restrictions hurt the pace of recovery of tourism revenue and hinder the return of NYC’s tourism-supported economy for restaurants, retail, theater, museums, transportation companies and small businesses. 

Two recent polls, one of New York City voters and one of New York residents living outside of New York City, show that an overwhelming majority of New Yorkers see tourism as being a positive influence in their communities, and the decline in tourism because of the COVID-19 pandemic as being a very negative development.

  • 87 percent of New York City voters believe that tourism was good for the City, including 7 out of 10 who believe that it was very good. 
  • 71 percent of New Yorkers residing outside of New York City say tourism is good for their local area, while only 4 percent say it is bad.

The poll also found that more than two-thirds of New York City voters also believe that New Yorkers should be allowed to rent out their home or a portion of their home through Airbnb, while only 23 percent oppose. 

The pandemic has allowed New Yorkers to reimagine their city in countless ways, from how we use our streets and how we develop our neighborhoods, to how we can build a sustainable, authentic tourism economy. Modernizing our short-term rental laws is part of building a post-pandemic New York that works for all New Yorkers and we stand ready to work with the City and State to achieve this historic reform. Now is the time.

  1.  NYC & Company 2019-2020 Annual Report
  2. NYC & Company
  3. New York State Labor Statistics
  4. All of the data in this report is based on global surveys of Airbnb Hosts and guests who used the platform in 2019 unless otherwise noted
  5. The Restaurant Industry in New York City: Tracking the Recovery, September 2020
  6. Tax projections based on 2019 Airbnb revenue only (not our competitors) and excludes locally administered County bed taxes, many of which have been voluntarily collected by Airbnb for years.
  7. New York State Comptroller’s Office