Short-Term Rentals Continue to Gain Market Share
("Booking Holdings breaks down private accommodation revenues for first time, now at
20% of total," Phocuswire, Feb 27, 2019)
Alternative accommodations, including short-term rentals, accounted for 20% of the overall annual revenue for Booking Holdings, the parent company of Booking.com. Notably, 40% of Booking.com’s active customer base booked an alternative accommodation within the past 12 months. We see no indication that growth in the short-term rental market will slow down anytime soon.
Partnering Early In the Multifamily Development Process
("Multifamily Developers Are Planning For Long-Term Partnerships With Short-Term
Rental Operators," Bisnow, Feb 26, 2019)
Multifamily developers are shifting away from viewing short-term rentals as a stopgap measure when units remain unoccupied in new multifamily buildings. Instead, developers are partnering with short-term rental operators earlier in the development process. This allows the short-term rental operators to have input on the building structure, layout and amenities. We view such early partnerships as being instrumental to effectively address the fire and life safety concerns that local governmental bodies have focused on as one of the blockers to allowing short-term rentals in urban areas, such as New York City.
New York City Continues to Battle Airbnb
("City issues subpoena for 20K apartment listings on Airbnb, The Real Deal - New York, Feb 20, 2019)
In an effort to identify “illegal hotels,” New York City issued a subpoena to Airbnb demanding the short-term rental site hand over the details of 20,000 apartment listings in the city. Airbnb responded via a letter stating it removed 5,000 listings in New York through the “One-Host, One Home” policy it implemented in 2016. We’ll continue to monitor whether Airbnb is successful in reaching an agreement with city officials.
Airbnb Has Big Plans For China and India
Skift Travel News on Feb 25, 2019
Airbnb will be making “aggressive investments” in emerging markets like China and India after seeing a huge spike in both number of guests and listings in these countries in 2018 over 2017. The homesharing platform attributes last year’s 131 percent growth in guests in China, and 65 percent in India, to a surge in domestic travel in these markets. What’s more, the countries are attracting growing numbers of international travelers. “In 2019, we will double our marketing investment in India to drive awareness of Airbnb across the country and reach millions of potential guests,” said Siew Kum Hong, regional director of Airbnb Asia-Pacific, giving an example of an aggressive push. “We are also working to integrate more local payment methods [in India] by the end of this year,” he added. Airbnb co-founder and chief strategy officer Nathan Blecharchzyk was in New Delhi over the weekend to launch a partnership with the Digital Empowerment Foundation to provide hospitality skills training to 15,000 potential women host entrepreneurs.
Oyo Partners With Yahoo to Bring Its New Home Rental Model to Japan
Skift Travel News on Feb 22, 2019
India-based hospitality company Oyo has targeted Japan as its latest market for expansion. The fast-growing startup has launched operations in Japan through a joint venture with Yahoo Japan and is fielding its new home rental model, Oyo Living, launched last October. “We are really excited about commencing our operations in our third and potentially the largest home market, Japan, through [this] joint venture [which] will be focused on creating unique living experiences for the Japanese citizens, students and young professionals looking for good-quality, affordable accommodations, starting with our fully managed homes brand, Oyo Life,” said Ritesh Agarwal, founder and CEO of Oyo Hotels and Homes. India and China are the other two home markets. In Japan, Oyo Life will be used instead of Oyo Living. Yahoo Japan is majority-owned by Oyo’s biggest funder, SoftBank.
Regulation & Legal Developments
Hotel group challenges validity of state’s Airbnb agreement
Florida Politics on Feb 26, 2019
The state’s agreements with Airbnb and HomeAway that have the companies collect sales taxes from their client vacation rental home operators and remit them to the Florida Department of Revenue are being challenged by the Asian American Hotel Owners Association. The hotel association filed a petition with the Florida Division of Administrative Hearings Tuesday charging that 2015 agreement and HomeAway’s 2018 pact were negotiated in secret, outside of usual rule making protocol, do not provide sufficient accountability, and should be voided. Airbnb was the first internet vacation rental home marketing company to begin working with Florida to collect taxes on behalf of the state from thousands of privately owned properties being operated as individual short-term rentals. HomeAway and its affiliated companies reached a similar pact last year. Airbnb has similar agreements with 40 counties and municipalities. The hotel association asserted similar complaints about those agreements in a news release, though the official petition deals only with the state agreement. Florida Politics on Feb 26, 2019
How it worked: Inside three ex-brokers’ $21M Airbnb scheme
The Real Deal - New York on Feb 24, 2019
The ringleaders, Max Beckman, Alon Karasenty and Simon Itah, used to work at Metropolitan Property Group A former real estate broker the city is suing for running an illegal network of Airbnbs wants to tell his side of the story. “We’re not criminals,” Max Beckman, an ex-agent at Metropolitan Property Group, told the New York Times. The scheme, which reportedly grossed Beckman and his partners about $21 million, was conceived after the resi game wasn’t working out for him. Beckman said he rented the first apartment that he then leased out on Airbnb to pay rent and pocket the difference in 2012. “It took off, and I made more money, and then I got another one,” he recalled, in the interview. “I couldn’t stop.” Beckman quit his day job as a broker three years later and convinced two of his fellow brokers, Alon Karasenty and Simon Itah, to join his venture. Together, they went on to rent out more than 100 apartments in 35 buildings and then relisted them on Airbnb to cover their costs and then some.
No easing of condo short-term rental rules in Las Vegas
VegasInc All Stories Headlines on Feb 21, 2019
The Las Vegas City Council today struck down a proposal to allow more short-term rentals in multifamily complexes. Sponsored by Councilman Bob Coffin, the regulation would have permitted up to 5 percent of units in a complex to be rented out for fewer than 31 days, though homeowners’ associations could pass more restrictive rental rules. The proposal was an amendment to an ordinance narrowly passed in December limiting short-term rentals to only one within a 660-foot radius and only in owner-occupied properties. Proposed by Mayor Pro-Tem Lois Tarkanian, the original ordinance was written with single-family homes in mind. Coffin’s amendment would also have eliminated the owner-occupancy requirement for multifamily developments, such as condominium buildings. Councilwoman Michele Fiore joined Coffin in voting for the amendment.
Florida Watchdog: Two bills seek state preemption in regulating vacation rentals
Sayfie Review on Feb 19, 2019
Vacation rentals – exactly what they are and if the state or local governments should regulate them – will again be a hotly debated topic when the Florida Legislature convenes its 60-day session on March 5. At least three Senate bills related to the state’s $31 billion short-term rental industry have been pre-filed thus far, including two that would give oversight to the state’s Department of Business and Professional Regulation’s (DBPR) Division of Hotels and Restaurants. Sen. David Simmons’, R-Altamonte Springs, Senate Bill 812, and Sen. Manny Diaz’s, R-Hialeah Gardens, SB 234, are both pre-emption bills, limiting local governments’ capacities to impose restrictions on short-term rentals and giving the state that authority. Both bills have been referred to the Senate’s Innovation, Industry & Technology and Appropriations committees.
Some Spanish Town residents taking aim at Airbnb rentals, seeking tougher regulations
The Advocate - Louisiana News on Feb 16, 2019
Baton Rouge could become the next city attempting to rein in how and where short-term rentals are allowed to operate.
Scott administration announces study on short-term rentals
News 10 Albany on Feb 16, 2019
Vermont Gov. Phil Scott's administration plans to do a study of the state's short-term rental properties, such as those hosted by Airbnb, to see if they are negatively affecting the state's lodging industry.
Host Compliance and STR Helper to Merge, Accelerating Innovation & Improving Local-Government’s Ability to Make the Sharing-Economy Work for Everyone
PRWeb on Feb 25, 2019
Merger Creates Market-Leading Company with the Financial, Engineering and Customer Support Resources Needed to Deliver the Full Suite of Data, Software and Services Governments Need to Cost-Effectively Implement and Enforce Fair and Balanced Short-term Vacation Rental Regulations By merging Host Compliance and STR Helper we will be able to draw upon our collective experience and capabilities to innovate our short-term rental compliance software and services while remaining focused on delivering outstanding technology, services and financial benefits to local governments. Host Compliance LLC (“Host Compliance”) and Bear Cloud Software LLC, doing business as “STR Helper”, leading providers of innovative technology to local governments, announced today the merger of the two companies. The merger is effective immediately, and the new company will operate under the Host Compliance banner and fully combine their operations in the coming months.
London firms helping landlords break letting laws
BBC News - London on Feb 25, 2019
Companies have been exposed encouraging people to break strict short-term letting laws in London, an undercover BBC investigation has found. Landlords and firms that push the 90-night yearly limit are "undermining" London's housing market, an MP has said. Housing lawyer David Smith said firms such as Hostmaker and Cityrelay were "misleading" landlords about the risks. Hostmaker said it would "immediately conduct a full internal investigation". Short-term letting companies, such as Airbnb, have transformed the tourism industry by making it easier for anyone to rent out their home to visitors. But, landlords in London are only allowed to let their homes out for more than 90 nights a year on short-term lets if they receive planning permission from the council.
We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.