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Hotel Development Insider

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Hotels vs Airbnb: The Gloves are off!

Airbnb, VRBO and other online short-term rental companies/services have been of of the most frustrating competitors of hoteliers all over the map. Hoteliers are seeing occupancy and ADR decline in areas with heavy concentrations of short-term rentals. This has led to a plethora of ideas and solutions to battle these services.

Most of those have failed, so now hoteliers are pulling off the gloves. As you can see in the below excerpt, hoteliers are banding together with politicians to change the game.

Excerpt taken from:

By: Romina Boccia

Travelers looking for unique accommodations at reasonable prices happily use Airbnb and other short-term rental platforms such as VRBO/HomeAway. And people like me who share our homes with visitors sure do like the additional income.

There is one big problem, however. Hotels don’t like the competition.

Instead of vying for customers by improving their facilities or service — or lowering their prices — the hotel industry has chosen a different approach: lobbying state, local and national politicians to quash the competition for them.

Their latest attempt is through H.R. 4232, the PLAN Act. This federal proposal would strip rental platforms of legal immunity for moderating user comments posted on their websites.

Section 230 of the federal Communications Decency Act shields blogs, social media platforms and a variety of internet applications from legal responsibility for much of the content posted by the public, except in criminal matters. This provision enables platforms such as Airbnb, Facebook and Craigslist to moderate public postings without the risk of legal challenge for user-generated content.

For rental platforms, this means being able to post lodging offerings without first having to verify that users are in compliance with all possible local zoning ordinances, homeowner association restrictions, residency requirements, etc. Now the hotel industry is seeking to compel Airbnb and other rental platforms to remove listings and content in cases where homeowners are reportedly in violation of such rules and restrictions.

The PLAN Act would amend section 230 to remove liability shields for rental platforms, making them liable in civil suits and subject to prosecution if they fail to remove listings and content that violate local zoning ordinances and other possible restrictions. It asks that “providers of an interactive computer service” that facilitates “the lease or rental of real property” engage in policing of user-generated content or face liability for lawsuits for “failure to cure the alleged violation.”

It would be patently impossible for an online marketplace to ensure third-party compliance with 50 state laws and rules imposed by tens of thousands of localities. And that’s precisely the point of the bill. According to documents obtained by The New York Times, the American Hotel and Lodging Association is fully committed to “reining in” competition from short-term rental providers.

By reducing the number of alternative lodging options visitors can access, the hotel industry can effectively confine more travelers to their properties, increasing the industry’s ability to charge higher rates in light of less competition.

A study by researchers at Harvard and the Massachusetts Institute of Technology found that hotel profits decrease slightly in markets with Airbnb activity. It reduces hotels’ ability to raise prices, especially during peak travel periods. Of course, it’s a boon to consumers who benefit from having more options at reasonable prices.

The PLAN Act would enable states, localities and others to request that rental platforms remove listings and content for zoning and other possible violations, directly reducing the supply of alternative lodging options the public can access on such platforms.



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