New York City's crackdown on Airbnb has been a jackpot for hotels. After the city effectively banned most short-term rentals in 2023, hotel prices jumped by up to $19 per night, netting the industry an extra $2.9 billion in just 18 months.
The study, published in the European Journal of Political Economy, reveals how the hotel industry flexed its political muscle to shape the new rules. In 2023, hotels outspent Airbnb on lobbying by a staggering 20-to-1 margin.
This lopsided influence is a textbook case of what economists call "regulatory capture" – when an industry manipulates government rules to boost its bottom line. It's like letting the fox design the henhouse security system.
"The hotel industry was better positioned to overcome collective action problems associated with lobbying," the researchers wrote. In other words, it's easier for a few big hotel chains to team up and twist arms than for thousands of individual Airbnb hosts to organize.
While supporters claim the ban protects affordable housing, critics argue it mainly shields hotels from competition. The study found hotels raised prices without attracting more guests, suggesting they're simply cashing in on reduced options for travelers.
As other cities eye similar Airbnb restrictions, this research offers a cautionary tale about who really benefits when new regulations are passed. Lead author Sebastian C. Anastasi warns that such policies may be "driven by special interests" rather than public good.
The next time you're hit with a sky-high hotel bill in the Big Apple, you'll know who to thank.
Previously:
• Tokyo travel tips, day 1: Airbnb in Shinjuku and an adorable curry restaurant
