A new law threatens to demolish a $US85 million market for the home-sharing behemoth—but the Big Apple is just a small piece of its pie.
Last week, Airbnb filed a lawsuit against New York City over a new law that the company is calling a “de facto ban” against short-term rentals that threatens $US85 million in annual revenue for the home-sharing platform.
Set to go into effect next month, New York City Local Law 18 requires city residents who want to rent out a room or apartment to register first with the New York City Mayor’s Office of Special Enforcement (OSE) and attest that they will comply with what Airbnb calls “the maze of complex regulations in different legal codes governing short-term rentals.” Those who skirt the law are subject to a civil penalty of up to $5,000 for each violation.
Short-term rentals in New York City drove $85 million in annual net revenue for Airbnb in 2022, according to the lawsuit. While that’s not a small sum by most measures, it’s barely more than 1% of the company’s $8.4 billion annual revenue.
Dan Wasiolek, a senior equity analyst at Morningstar Research Services who covers lodging and online travel, likens the new law in New York to a natural disaster. “Just to put it in perspective,” he explains, “let’s say a hurricane impacts one of your markets and shuts it off for a period of time until the issue gets worked out. I see this as a one-off situation that comes up in a cycle every so often.”
www.forbes.com.au/news/lifestyle/why-airbnb-can-survive-a-de-facto-ban-in-nyc/