AIRBNB’S PERCEIVED ONGOING march toward conquering the hospitality industry continues, as does opposition to that growth from traditional elements. At issue is the online stay-sharing company’s intent to acquire hotel booking service HotelTonight, a move that drew more criticism from the American Hotel & Lodging Association. At the same time, AHLA is celebrating a legal ruling against the company.
Airbnb announced the HotelTonight acquisition in early March, calling it part of its effort build “an end-to-end travel platform that combines where you stay, what you do, and how you get there, all in one place.”
“A big part of building an end-to-end travel platform is serving every guest, whether they plan their trip a year or a day in advance,” Airbnb CEO and Head of Community Brian Chesky.
One attraction for the company to HotelTonight is its deep relationships with boutique hotels. Last year Airbnb entered a partnership with online booking agency SiteMinder that targets independent boutique hotels and bed and breakfasts.
“Together, HotelTonight and Airbnb can give guests more choices and the world’s best boutique and independent hotels a genuine partner to connect them with those guests,” said HotelTonight Co-founder and CEO Sam Shank.
But, like the Siteminder partnership, AHLA sees the HotelTonight acquisition as another indication that Airbnb wants to enter the hotel business while evading industry regulations.
“It’s also likely a realization by Airbnb that their current business model is flawed with its reliance on income from illegal activity by commercial investors using their site,” AHLA President and CEO Chip Rogers said. “If Airbnb wants to enter the hotel business, then it needs to do so on a level playing field and be regulated, taxed and subject to the same safety compliances and oversight that law-abiding hotel companies adhere to each and every day.”
Rogers also said several major cities, including New York, Boston, Los Angeles and Washington, D.C., passed strong short-term rental laws last year in response to Airbnb’s expansion. The association also spoke out in support of a ruling last week by a three-judge panel of the United States Court of Appeals for the Ninth Circuit defeating Airbnb’s appeal to Santa Monica, California’s law regulating short-term rentals.
“We applaud the court for this critical decision and believe it will encourage other city leaders, who have yet to act, to now pass similar laws to rein in illegal commercial operators who are removing permanent housing off the market, driving up housing costs and making neighborhoods less safe,” Rogers said. “Santa Monica’s law is similar to ordinances passed in other municipalities, including New York, Boston, Los Angeles and Washington, D.C. and affirms the legality of those bills.”
Last month AHLA and AAHOA released statements condemning Airbnb for two other situations the associations called examples of unfair business practices by the online giant.
AAHOA’s case focused on Airbnb’s voluntary tax agreement with Florida that it claims in a petition with the state’s Division of Administrative Hearings violates proper approval process and public disclosure rules defined by state law. AHLA’s statement revolves around information uncovered in a New York Times article on a supposed scheme using 100 misleading host accounts and 18 corporations to run what AHLA called an illegal hotel business in Manhattan. The purpose of the scheme, perpetrated by a third party through Airbnb, was allegedly to avoid lodging taxes and oversight.