Airbnbs in NYC are disappearing. Here's what could happen to hotel prices

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Many Airbnb users with bookings in New York City this Christmas are scrambling to find new accommodations.

The company announced plans to cancel and refund bookings for stays after Dec. 1, according to the Associated Press, after long-planned regulations aimed at curbing illegal short-term rentals in the city went into effect on Sept. 5. The regulations that caused a stir among short-term rentals and travelers require hosts to be present during stays less than 30 day. They also limit the number of people who can stay in one dwelling. Hosts must also register and get approval from the city — or both hosts and booking sites may be subject to hefty fines.

The travel industry website Skift estimates Airbnb short-term listings in New York City dropped 77% from June 4 to Sept. 10, likely sending many in search of new accommodations. “Over the past week, we’ve seen the strongest booking pace for the forward six-month period than we’ve seen at any time going back to 2015,” Kevin Davis, CEO of JLL Hotels & Hospitality’s Americas, told “Squawk Box Asia” Monday.

“In addition, if you look at Google searches, just over the past week for New York City hotels, those are up 24%, relative to the past 60-day period,” he said. We’re seeing an enormous amount of interest from people who want to stay in New York City hotels. Davis stated that New York City had more than enough hotel rooms to meet the demand of travelers. “Since 2020, there have been 10,000 new rooms delivered and another 10,000 will be added in the next two years,” Davis said. There is more than enough hotel room supply to accommodate the tourists who want to visit New York City. Davis says that hotel rates will likely rise now that most short-term rentals are off the table.

“The message to your viewers is to plan ahead and make reservations sooner than later if you’re considering coming to New York City,” he said. “We expect the prices to increase, especially as we move deeper into the year.” Davis told CNBC’s Mandy Drury that the fall in airfares will also boost demand as airlines attempt to stimulate travel in the United States.

In New York City for instance, the fares in August were 14% lower than those of July. Davis confirmed this. If you compare fares between major U.S. cities and New York City they are down 17%. Consumers can see a significant reduction in airfare today. “

Knock on effect

Cities around the world regulate short-term rentals, from London to Paris to Dubai.

But New York’s regulations go further than most, leading to concerns that other cities may adopt similar measures.

Airbnb crackdown in NYC causes uproar from hosts and some homeowners

“It’s certainly possible that they could follow the lead of New York City,” Davis said. Kevin Davis

CEO, JLL Hotels & Hospitality’s Americas

Stricter short-term housing rules are on the table in the United States — in cities like Atlanta, Dallas and New Orleans, as well as places like Florence, Italy and Melbourne, Australia, Davis said. “

What we’re seeing in the short-term rental space now is, frankly, a correction.

Kevin Davis

CEO, JLL Hotels & Hospitality’s Americas

Stricter short-term housing rules are on the table in the United States — in cities like Atlanta, Dallas and New Orleans, Davis said — as well places like Florence, Italy and Melbourne, Australia.

During the pandemic, many homeowners marketed their properties on Airbnb to make money during a period of unprecedented demand for short-term rentals by leisure travelers, Davis said.

“What we’re seeing in the short-term rental space now is, frankly, a correction and a reversion to the mean,” he said. “Leisure travel has started to slow down, and you can see a decline in the demand for short-term rentals in many markets. “

CNBC’s Chiew Tong Goh was a contributor to this report.