Many Airbnb users with bookings in New York City this Christmas are scrambling to seek out recent accommodations.
The company announced plans to cancel and refund bookings for stays after Dec. 1, in line with the Associated Press, after long-planned regulations geared toward curbing illegal short-term rentals in the town went into effect on Sept. 5.
The regulations, which caused an uproar amongst travelers and short-term rental owners, require hosts be present for stays of lower than 30 days, with not more than two people staying in a dwelling at a time. Hosts must also register and get approval from the town — or each hosts and booking sites could also be subject to hefty fines.
The travel industry website Skift estimates Airbnb short-term listings in New York City dropped 77% from June 4 to Sept. 10, likely sending many in the hunt for recent accommodations.
“Over the past week, we have seen the strongest booking pace for the forward six-month period than we have seen at any time going back to 2015,” Kevin Davis, CEO of JLL Hotels & Hospitality’s Americas, told “Squawk Box Asia” Monday.
“In addition, for those who take a look at Google searches, just over the past week for New York City hotels, those are up 24%, relative to the past 60-day period,” he said. “We’re seeing an incredible amount of interest in people staying in New York City hotels.”
New York City has good enough hotels to fulfill traveler demand, Davis said, citing an unprecedented supply of recent hotel rooms in the town.
“Since 2020, 10,000 recent hotel rooms have been delivered, and over the subsequent couple of years, one other 10,000 recent hotel rooms will probably be delivered to the town,” he said. “So there’s absolutely good enough supply of hotel rooms to accommodate all of the tourists that want to return to New York City.”
Still, with most short-term rentals off the table, Davis said hotel rates are more likely to rise.
“The message to your viewers is in the event that they’re serious about coming to New York City, they need to plan to make the reservation sooner quite than later,” he said, “We expect prices will likely increase, particularly as we get deeper into the 12 months.”
Demand may also get a lift from a drop in airfares within the United States, as airlines attempt to spur fall travel demand, Davis told CNBC’s Mandy Drury.
“In New York City, for instance, actually August relative to July, fares were down 14%,” Davis said. “If you take a look at fares from major cities within the U.S. into New York City, they’re down about 17%, so consumers are definitely seeing a break in airfare today.”
From London to Paris and Dubai, cities the world over have regulated short-term rental markets.
But New York’s regulations go further than most, resulting in concerns that other cities may adopt similar measures.
“It’s actually possible that they may follow the lead of New York City,” Davis said. “My best guess, though, is that they will likely see what happens over the subsequent six to 12 months by way of enforcement and what the implications are for the town before you really see similar kinds of laws passed in other cities.”
Stricter short-term housing rules are on the table within the United States — in cities like Atlanta, Dallas and New Orleans, Davis said — as well places like Florence, Italy and Melbourne, Australia.
During the pandemic, many owners marketed their properties on Airbnb to become profitable during a period of unprecedented demand for short-term rentals by leisure travelers, Davis said.
“What we’re seeing within the short-term rental space now could be, frankly, a correction and a reversion to the mean,” he said. “Leisure travel is beginning to pull back now, and consequently, you are seeing a softening briefly term rental demand in lots of markets.”