Three months after Local Law 18 went into effect to regulate short-term rentals, a survey of travelers found people are less likely to travel to New York City once they are made aware of the new restrictive rules.
The poll, conducted by Penta between November 17-22, 2023 and commissioned by Airbnb, surveyed more than 1,000 past and future visitors to New York City. Past visitors were defined as those who have visited New York City in the past six months and prospective visitors were defined as those who have a visit to New York City planned in the next six months.
Key findings from the survey of travelers include:
- Less likely to visit New York City – Nearly one in five travelers (18%) say they are less likely to visit New York City after learning about the new restrictive rules.
- Rising hotel prices turn visitors off from NYC – 65% of respondents say they are less likely to visit due to recent increase in hotel prices.
- More visitors may turn to the black market – 54% say they are more likely to book short-term stays through unregulated platforms.
- More will opt to stay with friends or family instead of a hotel – 30% of travelers say they would rather stay with friends and family than pay for hotels, which will result in a loss of tax revenue.
- Less likely to visit boroughs outside Manhattan – 33% of travelers indicate the rules change how they approach their stay in New York City. According to the survey, they are less likely to visit the boroughs outside of Manhattan and more likely to seek out rentals on unverified platforms. They also indicated they plan to spend less money on other aspects of their visit (likely because they have to pay more for hotels).
New York City stands to lose over a billion in tourism spending
According to the U.S. Department of State, New York City attracted 56.7 million visitors in 2022, generating $6.2 billion in tax revenue and supporting 344,000 jobs. However, with more people expressing hesitance to visit New York City, the survey results suggest that the city could stand to lose an estimated $1.1 billion in tax revenue at a critical moment as the local government tightens spending.
Topline, New York City has a lot to lose due to Local Law 18, including the following:
- New York City could experience a decline in both visitors and revenue due to the recent implementation of these regulations on short-term rentals.
- The scarcity of short-term rentals coupled with the simultaneous surge in hotel prices has sparked a prevailing sentiment that New York City has become even more expensive and inaccessible for travelers.
- Individuals may resort to seeking short-term rentals through unauthorized and unverified sources due to the new regulations.
“This survey demonstrates Local Law 18 is bad for the local economy and visitors who are now faced with fewer places to stay and higher hotel prices,” said Theo Yedinsky, Global Director of Policy. “We’re seeing the predictable consequences of these regulations—short-term rental activity is moving underground forcing visitors to either pay exorbitant hotel prices or turn to unregulated black market accommodations, and travelers have fewer accommodation options in outer boroughs which means small businesses outside of Manhattan are cut off from the economic benefits of tourism.”
The survey results also provide insights as to why travelers choose to stay in an Airbnb when traveling to New York City. People surveyed listed the following as primary reasons for opting to stay in an Airbnb listing:
- 49% said cost savings
- 44% said availability of accommodation options in the area of their choosing
- 41% more space and amenities
- 32% proximity to friends or family
- 31% desire to experience local neighborhoods
Rules have led to higher hotel prices, fewer accommodation options
For the better part of the last decade, Airbnb and Hosts in NYC engaged directly with City leaders across multiple administrations to advocate for clear short-term rental rules that target illegal hotel operators and allow New Yorkers to continue to share their homes. Despite the efforts to reach a compromise, the City passed a law and issued rules that make it nearly impossible for New Yorkers to share their home. Among other things, the law and rules:
- Prohibit New Yorkers from sharing the home they live in when they are away due to work or travel
- Prevent Hosts from having internal locks on bedroom doors
- Require Hosts to certify they understand thousands of pages of complicated city codes
In the three months since the rules went into effect, New Yorkers are seeing some of the predictable consequences play out:
- Short-term rental activity is moving underground to unregulated third-party websites.
- Fewer accommodation options and are seeing higher hotel prices – according to the Trivago Hotel Price Index, hotel prices in New York City were nearly 5% higher year-over-year in December and up 16% from November.
- Rental inventory for New York City decreased 3.6% between August and November and vacancy rates remain unchanged, meaning we have not seen a large influx of listings converted to long-term housing as many predicted.