Airbnb Rallies Hosts Against Pending Chicago Ban on Single-Night Stays

Online Travel This Week

Airbnb’s One-Night Stand in Chicago

If you are in Airbnb’s virtual bunker trying to set up an initial public offering, consider what it must be like coping with almost-daily headlines about house parties gone wild or regulatory setbacks that interfere with a more positive story.

A case in point on the regulatory front is Chicago, where the city council is slated to vote Wednesday on an ordinance that would ban single-night stays in short-term rentals. In the run-up to the vote on the measure, which was adopted in committee last month, Airbnb emailed hosts, urging them to communicate to elected officials “how this bill may negatively impact your ability to earn extra income.”

[Update: The Chicago City Council unanimously approved an ordinance Wednesday that bans single-night stays in short-term rentals in the city. That part of the ordinance, along with a measure to give the city increased authority to prohibit house parties, would go into effect October 17. Other provisions, such as the creation of tiered licensing fees, would be implemented April 1, 2021. See the ordinance embedded below.

In reaction to the adoption of the ordinance, Alex Dagg, Airbnb senior policy director stated: “While we’re supportive of the aspects of the ordinance that modernize Chicago’s short-term rental law, the one-night ban is a blunt instrument that blocks legitimate reservations, such as business travel to Chicago — hurting the eventual return of the tourism economy, tax revenue and income for responsible Airbnb hosts. We will continue to work with Mayor Lightfoot and remain dedicated to partnering with the City of Chicago.”

Philip Minardi, head of public affairs at Expedia Group, stated Wednesday: “While we are concerned with the unforeseen impact the new night limitations could have on economic recovery, we remain committed to our collaboration with Chicago as we all turn towards implementation of the new rules.”]

The mayor and the consumer protection commissioner introduced the ordinance as a way to enhance safety and clamp down on house parties. Airbnb is ramping up its own measures to stymie house parties, but a ban on single-night stays in Chicago — and elsewhere, if other jurisdictions enact similar measures —would be a blow to Airbnb’s business.

The measure would impact other short-term rental platforms, as well, but the adverse effects to a vacation rental platform such as Expedia’s Vrbo would assuredly be less severe because stays in whole homes tend to be longer than just a solitary night.

Master Lease Fallout

When it comes to negative press in the short-term rental space, the master lease crowd has had its share. Airbnb recently suspended Domio accounts and listings for bad behavior, Sonder is the subject of three lawsuits in New York City over a variety of issues and sued a landlord in San Francisco, and several of these quasi-hotel platforms, including Stay Alfred and Lyric have ceased most, if not all, operations.

Whether it is house parties, regulatory crackdowns, or corporate hosts drawing ire, none of these developments would help Airbnb’s eventual roadshow. It is also an impediment to companies such as Sonder and Domio as they seek new contracts and expansion. However, these real estate-oriented hosts have proliferated across Airbnb’s platforms, so it becomes a question of when — not if — Airbnb would reinstate Domio into its good graces.

Is making nice with Domio sooner rather than later worth the public relations headache or would Airbnb want to wait until the stock ticker starts moving?

Google Has Advertisers Paying Digital Services Taxes

When authorities in the UK, Austria, and Turkey levied various digital services taxes, ranging from 2-5 percent, on major tech platforms, did they envision that Google, Facebook, Amazon and Apple would just make their advertisers pay the bill? That’s what Google, Amazon, and Apple intend to do, although the UK’s Telegraph reported that Facebook won’t follow its peers in that country, at least.

These tax passalongs pertain to all advertisers on these tech platforms, not just travel advertisers. In a statement, Google said: It’s typical for customers to foot the bill for these sorts of taxes, and that governments should adopt international tax reforms rather than unilateral measures.

Still, those Google travel advertisers, who feel the search engine is relegating them into becoming merely its fulfillment arm, won’t take any solace in having to support Google’s digital tax obligations, as well.

In Brief

Bill Ackman Has a SPAC for Airbnb

Given tech stock market volatility on Friday and Tuesday, does hooking up with a special purpose acquisition company become more attractive to Airbnb? Bill Ackman, founder and CEO of Pershing Square Capital Management, argued that his SPAC can be a Valium-like antidote to the pricing uncertainties of an Airbnb roadshow. That because Ackman said he can guarantee a $5 billion cash injection. Skift

Tripadvisor CEO to Investors: We Got This

Tripadvisor CEO Steve Kaufer appeared on CNBC Tuesday, and had a message for investors: Like past crises, the pandemic will pass, travelers have huge pent-up demand, and the company’s “place in our ecosystem is secure.” Kaufer said Tripadvisor is reinventing itself with features such as a new service connecting consumers to travel agents, and added that it would be a “blessing” if the U.S. Department of Justice got more active in probing Google on antitrust issues. CNBC

Silver Lake Partners’ Airbnb Discount

The early bird catches the … Airbnb discount. Private equity firm Silver Lake Partners, which participated in April deals that provided Airbnb with $2 billion in financing at the height of the Covid-19 crisis in the United States, reportedly won the right to purchase Airbnb shares at an $18 billion valuation. It appears as though Silver Lake signed quite a deal when you consider the double-digit returns it expects along with the chatter that Airbnb could potentially command a much-higher valuation. The Information

Booking Holdings Tops Skift Health Score

Booking Holdings generated the highest score — 72 out of 100 — in the Skift Health Score in August. That mark was higher than 99 other publicly held travel companies in the index. Still, Google has a larger travel business than Booking, which faces numerous challenges, as does the entire travel industry. Skift 

SuperApp Grab Adds Attractions

Southeast Asian superapp Grab became even more comprehensive with the addition of tours and activities from Kook. Grab already offered ride sharing, food delivery, hotels, and financial services.  Phocuswire

Following is the Chicago City Council ordinance that bans single-night stays in short-term rentals, among other new provisions:

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