There's not a David and Goliath battle happening here. It's more like new money versus old money, and we expect to see some excellent public relations work on every side.
Over the weekend, The New York Times published an article, “Inside the Hotel Industry’s Plans to Combat Airbnb,” which included pages from a 2016 internal American Hotel & Lodging Association (AHLA) document, detailing the organization’s plans for limiting the growth of short-term rentals and the platforms that enable them, namely Airbnb.
That action plan includes the launch of a new ad campaign called “My Neighborhood” that would feature testimonials from people negatively impacted by short-term rentals, as well as funding research that purports to demonstrate how Airbnb and other platforms are predominantly used by commercial operators, not everyday middle-class Americans.
Is it a battle for the future of the middle class, as Airbnb consistently positions this? Or is it just another business battle between multi-national hotel chains and a venture capital-backed company valued at $31 billion?
The AHLA’s Job
The New York Times article described AHLA as “a trade group that counts Marriott International, Hilton Worldwide and Hyatt Hotels as members,” interchangeably using “AHLA” and “the hotel industry” throughout its piece. Fighting illegal hotels is just one of many issues AHLA tackles. It also has campaigns aimed at preventing human trafficking, stopping online hotel booking scams, encouraging more youth to have careers in hospitality, and fighting increasing wage legislation that targets the hotel industry specifically.
The organization also runs its own political action committee, which spent $2.43 million on lobbying efforts in 2016, an increase of nearly 31 percent from the $1.86 million it spent on lobbying in 2015.
AHLA’s chief executive, Katherine Lugar, has been at her post since 2013, and formerly served as a top lobbyist for the Retail Industry Leaders Association. She is also the daughter-in-law of former Senator Richard G. Lugar (R-Indiana).
The more than 24,000 members that AHLA advocates for do not only include the Marriotts, Hiltons, and Hyatts of the world, but the roster also extends to hotel owners, real estate investment trusts, independent hotels, beds and breakfasts, and everyone from hotel company CEOs to the person staffing the front desk.
What the Document Revealed
For people who work in the travel and hospitality industry, The New York Times article and the internal document no doubt reaffirmed what many already know: That the AHLA and Airbnb are combatants fighting with one another in the arenas of public policy and public perception.
AHLA wants the federal and local governments to be tougher on short-term rentals, a number of which can be classified as illegal hotels, and limit the growth of a business that is, no doubt, having some impact on its members. All of this is taking place, however, as data from various sources have conflicting analyses on the real impact Airbnb is having on hotel business. How big a threat Airbnb is to the hotel business is unclear, but what’s certain is that the industry, and AHLA, see it as a viable one.
“Though we welcome the practice of true home sharing, where the owner is present during the guest’s stay, we’ve found that accounts for less than 20 percent of Airbnb’s business,” said Maiettta. “While 81 percent of Airbnb’s revenue nationwide – $4.6 billion – comes from whole-unit rentals where the owner is not present. That’s not home sharing, that’s a business.”
She added, “We call on Airbnb and short-term rental companies to stop misrepresenting their platform as one that simply supports the middle class when it’s clear the bulk of Airbnb’s revenue is coming from commercial activity. They have the power to report their data, remove commercial activity when appropriate, adhere to commonsense safety and security measure and pay their fair share of taxes. And they refuse to take even simple steps to do any of that.”
Airbnb Is Working for Legalization
Airbnb wants to gain legalization in jurisdictions around the world and it’s worked hard for the past few years trying to convince mayors and other lawmakers that homesharing is a win-win for all — that it’s an economic empowerment tool for the middle class. The company is also trying to convince those same lawmakers that having laws of any sort to regulate the sharing economy is misguided.
Airbnb spokesperson Nick Papas’ response to The New York Times article was as follows: “With more than 250 government partnerships over the last year we have shown our seriousness of purpose when it comes to putting in place fair rules so everyday people can use their homes to make extra income, but from opposing raising the minimum wage to attacking home sharers, it’s clear the hotel cartel is intent on short-sheeting the middle class so they can keep price gouging consumers.”
“The hypocrisy is almost unbelievable: the hotel cartel wanted Airbnb to collect taxes and when we implemented a way to do so, they changed their position and lobbied cities to leave millions of dollars on the table. And their ‘model legislation’ would charge a middle class family $2,500 if they wanted to share their home for even one night.”
While AHLA’s strategy was the main focus of The New York Times article, Airbnb likewise has its own similarly multi-pronged strategy for battling the hotel industry that is gaining steam under the leadership of Chris Lehane, global head of public policy, and backed by significant spending on lobbyists in state capitals around the U.S., as well P.R.-driven stories about citizenship at Airbnb Citizen. For instance, in February, Airbnb launched “a campaign tracking the big hotels’ fiscal flip flops.”
In another case, Airbnb has sponsored self-described “national watchdog blog,” Checks and Balances Project, which publishes articles portraying the “hotel lobby” and any opponents — from academics to city council members — of homesharing in a negative light. Its primary target? A Penn State professor who authored a research study about Airbnb that received funding from AHLA.
In other words, both AHLA and Airbnb are doing whatever they can to advance their respective missions in the back halls of Washington, as well in the hearts and minds of the American people. It’s an ongoing battle, and one that isn’t going away anytime soon.
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Photo Credit: The American Hotel & Lodging Association is lobbying federal, state and local governments to clamp down on Airbnb. The U.S. Capitol is seen at dawn in Washington, D.C. in this April 4, 2017 photo. J. Scott Applewhite / Associated Press