Disruptive technologies: short term gain long term pain?

Airbnb and other short term home rental sites have been widely hailed as disruptive technology sites that have upended established players. That they have is borne out by their growing presence across jurisdictions in the US and abroad.

Along with their ascent in the marketplace have come numerous problems including crimes like burglary and prostitution in airbnb's
case which can only increase unless they are regulated. The latter only raises the question as to why not classify (and regulate) them like
regular hotels with, at a minimum, all their attendant fire &
workplace security issues.

Apropos the foregoing, a west coast publication, the Orange County Register recently reported on the measures being taken by Dana Point, among others, to rake in tax revenues while trying to pacify irate long-term taxpayer residents upset with noise and potential safety issues arising from unregulated tourist traffic.  The weekend's Wall Street Journal also has a story on a number of other locales around the US trying to square that circle.

The Journal reports on how these faux hospitality websites are seeking to position themselves as a legitimate industry and quotes a HomeAway official who announces, without irony, the creation of an alleged "non-profit"
website funded by the short-term rental industry  that will "push cities to enact "light"
regulations that steer clear of license and zoning changes but make it
easier for municipalities to identify short-term rentals and collect
occupancy taxes from them. Seems like they want to have their cake and eat it too.

Vacation rental sites also hope that the move will give them more firepower to aid
homeowners who are lobbying or litigating against vacation-rental bans. The HomeAway executive noted that "We want this industry to be a valid choice for travelers, and simply
want the legitimacy that comes with appropriate and fair regulations". "Fair" rules, presumably, are those that exempt them from zoning, labor, safety and quality standards associated with hotels.

Seeking to emulate the wannabe hospitality players in a related field is Flightcar, a site that bills itself as a "not a run-of-the-mill car rental service". The soon to be launched company plans on putting to use the tens of thousands of cars (idly) parked in the vicinity of the nation's airports by regular folk who go out of town whether for business or pleasure by "renting" these vehicles out! Apart from raising insurance issues, for which there may well be a market, the model, as yet, says nothing about differentiating between vehicle mileage levels and car quality, something which regular rental car companies promise and deliver at a reasonably consistent level.

In terms of disruptive technologies, perhaps, the next frontier is using millions of unused clothes lying in people's closets.


Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.