HomeAway and Airbnb Lose the Battle Against Santa Monica
("Airbnb Loses Major Fight Over California City's Rental Law," Bloomberg Quint - Stories on Mar 13, 2019)
On March 13, the Ninth Circuit ruled against HomeAway and Airbnb in a closely-watched lawsuit the two short-term rental platforms filed against the City of Santa Monica. The lawsuit alleges that Santa Monica’s ordinance regulating the short-term vacation rental market is preempted by the Communications Decency Act and impermissibly infringes upon each company’s First Amendment rights. The ordinance authorizes licensed “home-sharing” (rentals where residents remain on-site with guests) but prohibits all other short-term home rentals of 30 consecutive days or less. It also requires the platforms to collect and remit taxes and regularly disclose listings and booking information to the city. We expect that this decision will bolster the confidence of some local governments that have been watching from the sidelines to determine if strict short-term rental regulations will hold up in court. An obvious corollary is that the industry is likely to invest more resources in jurisdictions that have shown greater hospitality to these platforms. In our view, some regulation is both necessary and reasonable if short-term rentals wish to stake a permanent claim in the travel industry. We will continue to monitor where that line of reasonableness is drawn as the arguments play out in the courts and local legislative bodies.
Short-Term Rentals Continue to Gain Market Share
("Booking Holdings breaks down private accommodation revenues for first time, now at
20% of total," Phocuswire, Feb 27, 2019)
Alternative accommodations, including short-term rentals, accounted for 20% of the overall annual revenue for Booking Holdings, the parent company of Booking.com. Notably, 40% of Booking.com’s active customer base booked an alternative accommodation within the past 12 months. We see no indication that growth in the short-term rental market will slow down anytime soon.
On February 19, Bisnow hosted its 2019 Pacific Northwest Hotel Summit held at the Four Seasons Hotel in Seattle. Reputed real estate property developers, hotelier and principal consultant of an architectural and design services firm convened to share their insights on how Seattle’s booming tourism is impacting the hotel industry, specifically with regard to the increase in development, investment, supply, and branding of hotel properties.
We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.