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Airbnb allegedly costs NYC economy and lodging industry $2.1bn

The direct impact of lost lodging revenue caused by Airbnb over the twelve-month period prior to August 2015 was $2.1bn, according to findings released last week by the Hotel Association of New York City.

The association itself represents more around 270 hotels in the region and it has published a report called Airbnb and Impacts on the New York City Lodging Market and Economy.

According to the paper, Airbnb now dominates eight percent of the market demand in NYC and the amount of lost revenue it is estimated to have directly caused hotel industry over one year is more than $450 million.

The report also examined the impact on departments related to traditional accommodation such as food and beverage, tax and revenue, construction, etc. The study estimates Airbnb costs more than $226 million annually in lost tax revenues for local, state and federal governments.

“This study not only confirms that Airbnb’s operations in New York City have a negative impact on the hotel industry, but it also details the tremendous disruptive reach Airbnb has on the broader city economy and our communities,” said Vijay Dandapani, chairman, Hotel Association of New York City.

The report concluded that over 2,800 jobs are directly lost due to a lack of ability to service Airbnb demand, stating: “Hotels are labour-intensive operations that generate significant employment opportunities for a community. By removing demand from the market, and the need to service those rooms, so too are jobs removed from the market that would handle the operations of those rooms.”

“With the Airbnb revenue staged to potentially double in size, we only expect these impacts to grow proportionately and become a more significant and important factor in the competitive landscape of the New York City lodging market,” the report states.

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