City targets startup Guesty for facilitating illegal Airbnb networks

At a Midtown event last week, a marketing manager for Israeli startup Guesty said New York was “one of [the] biggest, if not the biggest market” for the short-term rental management company. The city now says most of that market is illegal.

The mayor’s Office of Special Enforcement announced Monday that it had opened an investigation into the firm, and has filed a subpoena seeking records about its activities in the city.

“You’re not using Guesty in New York City if you’re renting out your own home occasionally; you’re using Guesty if you have multiple listings on a short-term rental platform that you’re trying to manage,” OSE executive director Christian Klossner told Wired.

“And as a result, they are getting a direct commission from the perpetuation of these illegal short-term rentals.”

Guesty, a preferred software partner of Airbnb, helps large-scale commercial operators manage networks of short-term rental properties across multiple platforms, including Booking.com, and HomeAway.

In particular, the city claims Guesty played a key role in the operations of brokerage firm Metropolitan Property Group, which the city hit with a $21 million lawsuit last year. The brokerage was accused of running an illegal network of Airbnb rentals across 130 apartments in 35 buildings in Manhattan.

“Metropolitan Property Group used Guesty to help manage the majority of their illegal short-term rental accounts on Airbnb and generate millions of dollars of ill-gotten income from placing unwary guests in dangerous and unsafe conditions,” court filings state. “And scores of Guesty accounts have been associated with another still-ongoing investigation.” [Wired] — Kevin Sun