Impact of Local Law 18 and Decline in Airbnb Listings
The surge in hotel rates can be attributed to the implementation of Local Law 18, which went into effect in September. This law imposes restrictions on Airbnb rentals, limiting them to two guests and requiring reservations for more than 30 days to be registered with the city. Furthermore, the law prohibits short-term stays in separate apartments or living quarters in both apartment buildings and private homes, punishable by fines of up to $5,000 per violation.
The new regulations have caused Airbnb listings to plummet by over 75% since their enforcement, eliminating a significant competitor for the hotel industry. Previously, Airbnb had helped keep hotel rates in check by offering additional rooms during peak periods when lodging options were limited.
Influx of Tourists and Impact on Popular Sites
The influx of tourists has had a noticeable impact on popular sites, with visitors waking up before sunrise to beat the crowds. For example, Rockefeller Center, usually swarming with selfie-seekers, has seen a surge of early morning visitors. Recently, some people braved the 35-degree weather and gathered at Rock Center as early as 4:45 a.m. to capture crowd-less pictures and witness the lighting of the famous Christmas tree at 5 a.m. sharp. The tree, adorned with a Swarovski crystal star and 50,000 multicolor lights, springs to life to mark the occasion.
Additional Factors Driving Higher Prices
Aside from the increased demand for hotel rooms, the surge in prices can also be attributed to the occupation of over 10,000 lower-cost rooms by asylum seekers. This further reduces the availability of affordable accommodations in New York City. According to Airbnb housing market economist Taylor Marr, the impact of these factors is expected to intensify after December, especially during peak travel nights like New Year’s Eve.
For comparison, Trivago’s findings reveal that in January, after the holiday season, the average nightly rate drops significantly to $261 — more than 102% lower than the current rate of $529 per night.