The Real Deal New York

Hotels seek to file class action lawsuit against Airbnb

August 19, 2013 09:30AM

Hotels are looking to strike back against short-term lodging website Airbnb — which has dug into their profits — with a class action lawsuit alleging unfair competition, Crain’s reported.

“We are not sitting still,” Vijay Dandapani, chief executive of Apple Core Hotels in New York and a member of the Hotel Association of New York City’s executive committee, told Crain’s. “They are violating the law and we are the affected class.”

Services like Airbnb result in owners sidestepping taxes on income from renting out their homes, Dandapani said. “These people don’t pay taxes. The web sites may tell them they need to pay all taxes, but they don’t require it.”

Airbnb does file information with the federal government reporting income from “hosts,” Crain’s said.

The company also acknowledged that some hosts weren’t aware of local laws concerning illegal hotels. In May, the company added a pop-up screen when hosts register their apartments, which asks users to “review their local laws before listing their space on Airbnb.” It told Crain’s that it is “working with governments around the world to clarify these rules so that everyone has a clear understanding of what the laws are.” [Crain’s]Hiten Samtani