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How is the growth of the traditional hospitality business model being affected by companies such as Airbnb and VRBO?

We are interested in developing hotels and motels through EB-5, a practice that has long been popular for the program, but we are concerned about the future potential of the hospitality and lodging industry, given that other companies such as Airbnb are affecting the marketplace. Is there still room for more hotels and motels in a private vacation rental world? Are cities fighting back against the incursion of vacation rentals in their neighborhoods?

  • Farazad Investments
    June 20, 2018

    It is certainly being affected. However, various authorities are implementing strict regulations on Airbnb-style concepts. For example, recently a survey said 61 percent of respondents support a New York City Council bill requiring Airbnb to provide the names and addresses on all its listings in the city to the Mayor’s Office of Special Enforcement. Only 20 percent were against the proposal and 19 percent were undecided. The survey was commissioned by Share Better, a group pushing for the bill’s passage, and funded by the hotel industry and Hotel Trades Council. As you can see, the hotel industry is working hard to try to minimize the use of Airbnb. We still believe there is room for growth in the hospitality sector across the United States and, of course, Europe. Please refer to for all activities across the hospitality chains taking place in the United States. That should provide you with reference of solid and streamline growth.

  • Greenberg Traurig, LLP
    June 24, 2018

    Airbnb and its progeny are certainly affecting the lodging industry in major ways. It has been difficult to accurately determine just how much these disruptors have impacted ADRs and occupancy rates at the various types of hotels. Most feel that the most affected sectors are extended stays and four- or five-star urban hotels. Less expensive select service hotels and motels seem to be less competitive with Airbnb in most locations, at least at the present time. In some cities, there has been major pushback from governments to restrict their activities in various ways. New York and San Francisco have imposed some serious regulations, making it more difficult for users to get accommodations through Airbnb. The pushback is led mostly by the hospitality industry (and their service unions) as well as apartment building owners or condominium associations who don't like hotel-type transients in their properties. Many of these regulations are being challenged in courts by Airbnb and by homeowners, and I would expect different outcomes in different states. New York and San Francisco seem to have restrictions that will help limit the disruption of these companies, at least to some extent, and the challenges so far have not limited the regulations. In Texas, however, there was a recent case upholding the rights of a property owner to rent his home through a service. The regulation limiting it was struck down by the courts there. So, this is an evolving legal trend that is being closely watched by the hospitality industry. That said, these disruptor companies are likely here to stay at some level as another branch of the hospitality sector that will reduce the demand otherwise directed to hotels.

  • Marcus & Millichap
    June 25, 2018

    Many of our hospitality owners share the same concern about Airbnb and VRBO. However, we don't see a huge impact at the moment for the brand-name hotels (at least not yet). The clients/travelers who stay at the brand-name hotels usually have a brand loyalty and they look for something consistent, as these brands have a very strict standard with regards to upkeep at their hotels (such as the size of rooms, layouts, services, etc.). However, smaller boutique/private hotels might have a bigger impact due to the brand recognition as well as the service standard. Also, many cities are not allowing short-term rental types through Airbnb, VBRO, etc. (such as Anaheim near Disneyland, Irvine and other coastal/tourist areas).