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Short-term rental bans and the hotel industry: Evidence from New York city

Author

Listed:
  • Anastasi, Sebastian C.
  • Marsella, Alexander
  • Melo, Vitor
  • Stephenson, E. Frank
  • Wagner, Gary A.

Abstract

We examine the gains and involvement of the hotel industry in New York City’s short-term rental ban. Building on capture theory, we document that the hotel industry was better positioned to overcome collective action problems associated with lobbying and spent an order of magnitude more than home-sharing platforms like Airbnb in political contributions, particularly prior to the ban. We find that hotels’ average daily rates increased by $14 to 19 per night, depending on specification, and revenue increased by roughly $2.1 to 2.9 billion over the first eighteen months following the ban. By contrast, the effect on room nights is small and imprecisely estimated, so the revenue increase was mostly due to the increase in room rates.

Suggested Citation

  • Anastasi, Sebastian C. & Marsella, Alexander & Melo, Vitor & Stephenson, E. Frank & Wagner, Gary A., 2025. "Short-term rental bans and the hotel industry: Evidence from New York city," European Journal of Political Economy, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:poleco:v:89:y:2025:i:c:s0176268025000850
    DOI: 10.1016/j.ejpoleco.2025.102725
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    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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