The Real Deal New York

Foreign hostel execs rally against NYC ban on their industry

Firm heads are in town to back bill classifying illegal hotels as Class B buildings

November 28, 2016 04:50PM

Margaret Chin and a hostel dormitory room

Margaret Chin and a hostel dormitory room

Executives from global hostel companies will meet with City Council and members of the hotel industry next week, with the goal of reviving New York City’s ailing hostel industry.

A state law aimed at cracking down on illegal hostels wiped out most of the city’s legitimate hostels, Crain’s reported. Introduced in 2010, the legislation changed the law for Class A multiple dwellings, which accidentally banned a number of legal hostels. In order to fix the problem, Council member Margaret Chin is sponsoring a bill that would classify hostel-style properties as Class B buildings, which would exempt them from the ban.

Over two days in New York City, executives from Hostelworld Group, Clink Hostels, Yellow Hostels, Generator Hostels and Meininger Hostels will meet with city hotel owners and the hotel workers union to try persuade them to support the legislation. Those companies are based in England, Germany, Italy and Ireland.

That could involve assuring them that hostels will compete with Airbnb, rather than hotels. Having the Hotel and Motel Trades Council on board is also crucial for successfully lobbying government, according to the publication.

“Clearly there’s a lost opportunity there,” Bruce Blum, president of Liberty Hotel Advisors, told Crain’s. “Everybody thinks it’s just the younger traveler, but we think it’s a broader group of travelers interested in spending their money in the city as opposed to on the hotel room.”

The law in its current form is what makes many short-term Airbnb rentals illegal. Last month, New York Gov. Andrew Cuomo signed a bill into law that raised the fine for illegal Airbnb listings to $7,500. h The same day, Airbnb filed a lawsuit against Cuomo, Attorney General Eric Schneiderman and Mayor Bill de Blasio alleging “an unjustifiable content-based restriction on speech in violation of the First Amendment.” [Crains]Miriam Hall

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