The fight over Airbnb boils down to a fight over taxes.
Airbnb has been in the news a lot lately for its incredible growth and popularity among customers. Proponents of the online accommodation site point to its ingenuity as a boon for the tourism industry and for the city.
But that popularity doesn’t extend to the hotel industry. They say the service is taking business away and not contributing to the community with jobs or tax revenues.
“Airbnb is a six letter word,” joked Glenn Coleman, editor of Crain’s New York, at the Future Conference this morning. “Why the pushback?” he asked the panel.
“The main thing with Airbnb is that it does things we can’t do in the hotel industry. We do things that we have to do; we have to pay taxes,” said Jonathan Tisch, the chairman of Loews Hotel chain.
He expressed a certain level of acceptance of Airbnb, although it was delivered with disdain. He noted that the tech company has found its place in the market by creating an easier process of finding accommodation for the customer.
“But they are not creating jobs,” he said, alluding to the fact that the hotel industry creates good jobs. “Men and women are sending their kids to college, they are making a commitment to their communities because they are working in a hotel.”
Daniel Doctoroff disagreed, he told the audience that if we want to keep up with competition, we have to keep up with technology. He touted the fact that the Highline is the ninth-most instagrammed site in the world and that Airbnb has 20,000 people staying in New York every night.
“I think tech for New York is an overwhelmingly great thing,” said Mr. Doctoroff. He said the more innovation there is – and the greater the access – the bigger the pie for the entire tourism industry.
He likened technology to physical infrastructure when it comes to access. If it were up to him he’d build more tunnels and bridges into New York City so more tourists can visit.
“Even with Airbnb, hotel room rates are near their all time high and so is occupancy, despite the fact that we’ve gone from 55 thousand to 103 thousand rooms. That’s amazing!” said Mr. Doctoroff.
Airbnb doesn’t appear to be going anywhere any time soon. It has created a market for itself and business is booming. “In the hotel industry, we understand that,” said Mr. Tisch.
But Mr. Tisch grumbled that “when someone is staying in a room, we pay lots of taxes, when someone sells an asset, we pay taxes. For the safety of coworkers, there’s lots of taxes, and we pay for fire safety codes.”
Maybe the hotel industry isn’t against innovation; it’s just angling for less taxes.