United States: Soloway Discusses Regulation Of Airbnb “Shadow Hotels”
Last Updated: June 7 2017

Top hotel executives and other members of the hospitality community recently gathered for NYU's annual International Hospitality Industry Conference in New York City. Among the topics discussed was the surge in "illegal shadow hotels" advertised on Airbnb, which many hotel groups claim skirt taxes and inflate residential real estate costs to the detriment of local affordable housing.

Hyatt Hotels Corp. CEO Mark Hoplamazian stated during one of the conference panels that Airbnb listings by commercial owners with multiple properties are "problematic from a regulatory perspective," and expressed a desire for municipalities to clamp down on what he called "distortions in the housing market."

In October 2016, Airbnb filed suit against New York State and New York City after a bill was introduced which sought to impose heavy fines on Airbnb hosts who violated local housing regulations, namely, by advertising short-term rentals on its platform. The lawsuit was later settled, with Airbnb agreeing to abandon its challenge of the legislation and New York Attorney General Eric Schneiderman turning compliance and enforcement of the law over to the New York City Mayor's Office of Special Enforcement.

During the same NYU panel, Todd Soloway, Chair of Pryor Cashman's Hotel + Hospitality Group, called New York State's pact with Airbnb "an odd agreement," saying the law, on its face, holds both hosts and Airbnb liable for advertising stays of less than 30 days if the host is not in occupancy. "It remains to be seen how the state's agreement to a stipulated injunction and order for voluntary dismissal plays out," he added. 

As other conference-goers noted, Airbnb is extremely well-funded and can be expected to continue disrupting the hotel industry, even if it means challenging new legislation and regulation.

For more information on the impact of Airbnb "shadow hotels" on the hospitality industry, read the full Law360 article. 

More About Soloway's Practice

Todd Soloway leads Pryor Cashman's Hotel + Hospitality and Real Estate Litigation Groups. He has been named a leading attorney by The Best Lawyers in America and is a frequent contributor to industry publications on topics ranging from hotel management agreements to hospitality mergers.

To learn more about his work, please visit here.

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