Airbnb has no impact on Manhattan's room demand

Airbnb doesn't have any "material" impact on hotel-room demand in New York's borough of Manhattan, research firm STR said in a report released this week, contradicting what many analysts, hotel operators and housing advocates have said about peer-to-peer housing's effect on the lodging industry in the largest U.S. city.

While Airbnb's Manhattan units accounted for about 9% of the borough's approximately 92,000 lodging units (comprising hotel rooms and Airbnb units), Airbnb accounted for just 3.5% of its lodging revenue for the fiscal year ended Nov. 30. The reasons for that are that Airbnb units' occupancy rate is substantially lower than Manhattan's 87% hotel-room occupancy rate, and Airbnb's room rate is about $100 less than the average hotel-room rate in the borough.

Additionally, STR pointed out, 61% of Airbnb units compete against midscale and economy hotels; those categories account for just 13% of Manhattan's hotel-room units. And while most Airbnb units are rented out for at least a week, just 4% of Manhattan's hotel rooms are in extended-stay properties.

Many analysts, hotel operators and lodging-industry lobbyists have decried Airbnb as a largely illegal operation because, they allege, many Airbnb hosts violate New York's laws against short-term rentals.

Those critics have cited New York's recent lodging statistics as proof of Airbnb's detrimental impact on hotels in the Big Apple. Last year, New York's room rates fell 1.6% from a year earlier, making it the only U.S. market out of the largest 25 to have a price decline. Others have attributed that price drop to the 3.2% increase in New York's room supply.