Mayor Bill de Blasio Wants Your Next New York Hotel Stay To Be More Expensive

It’s a mistake to think of Bill de Blasio as pro-consumer or anti-business. He’s a cronyist, supporting favored businesses with government regulation and protecting them from competition.

One set of businesses he’s out to protect – at the expense of consumers – is the city’s incumbent hotels.

De Blasio is proposing to eliminate the ability for new hotels to be built ‘by right’ as long as they conform to zoning laws, and instead require a special permit in “a process that would effectively grant the local City Council member veto power over any new hotel room.”

  • The largest hotel owners in the city say “they’ll rest easier if the city severely restricts the construction of competing accommodations.”
  • The “major hotel brands supported the mayor’s special permit initiative” as well.
  • That’s because incumbent players don’t like competition that might drive down the city’s sky high room rates and affect their profits.

Proponents complain about “a recent surge in hotel development” which was a complaint two years ago and four years ago without the predicted parade of horribles coming to fruition.

In the ‘upside-is-down’ world of spin, hotel owners argue that (1) new hotels will drive down rates, (2) which will hurt their business, and (3) they pay taxes — so more hotels mean less taxes. It’s not for their benefit but the benefit of the city’s coffers that competition needs to be limited. After all, while new hotels will pay taxes, they don’t pay taxes yet!

You’d expect hotel unions to back more hotel industry jobs that come from more hotels, but new hotels aren’t yet unionized so they want to stamp out competition too.

In 2015 New York’s city council voted for a moratorium on converting hotels to condos. They needed hotels! Which is it? You’d think the city would want more hotels since they need somewhere to house the homeless. Of course this wouldn’t be the first absolutely backwards New York City hotel law.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. NYC also needs housing. Major cities are working to try to control housing prices, which AirBnB has pushed way up (why would you rent an apartment when you can get 5-10x by being a ‘hotel’)? I’m not saying that what NY is doing is correct, but major cities have a HUGE housing pricing problem, and this is a way to control it.

  2. AirBnB Is not the cause of a housing crisis. The housing crises are due to too much NIMBY-type regulation, the growing disparity in incomes, and population growth of various sorts in an era where the hot spots for growth of various sorts get hotter while the cold spots just get colder. But the invisible hand will work its way anyway.

  3. @Joelfreak I’m sorry, but your comment does not apply to Gary’s blog. This measure has nothing to do with controlling housing costs.

    Unless every economics professor in history is wrong, increasing supply _lowers_ prices. The mayor’s plan is an attempt to prevent new hotel room supply, for the purpose of inflating the profits of the existing hotel players. It’s rent-seeking.

    It would have 2 obvious effects: raising the price of a hotel room, and simultaneously lowering the city’s hotel tax.

  4. Don’t get me started on Mayor Bill de Blasio. He wants to shut down Rikers Island, sell it to his developer donors, and then spend $9 billion in taxpayer dollars putting prisons all around New York City. His congestion pricing plan (charge everyone driving into downtown Manhattan) is a pure money grab. He is supporting Port Authorities plan for a drop off and pick up fee at airports. He is the worst.

  5. @OJS

    Rikers needs to get shut down. What’s your better plan?

    And one way to relieve congestion is to discourage the demand that creates it. What’s your better plan?

  6. Is there really a housing shortage, why cant we let the free market sort it out? Just because you have lived in a placed for decades doesn’t mean you have a right to stay there.

  7. The one good thing de Blasio has done is push for Rikers to close. The stigma of abuse is too much to overcome and putting up new jails locally does a few things. It makes it easier for people to have access to their loved ones and makes it easier for them to be brought to County criminal court and hopefully prevent the delays that has plagued the NYC trial system. Having brand new facilities that are clean and sanitary and promote safety is great. By reducing the beds this will hopefully mean the City will end the war on drugs and stop arresting people for non violent nonsense.

    Everything else about de Blasio is terrible. Manhattan is crowded as it is and doesn’t need anymore people or buildings. But that is not why de Blasio opposes ride sharing services, airbnb or new development of hotels or properties. It is because of cronyism and protecting a select class of elitists or special interests at the expense of everyone else. I’m stuck here for family reasons but have no hope given that the majority of the population here are as morally bankrupt and ideologically twisted as de Blasio.

  8. @ Gary — You know, I’ve never actually found the hotel rates in NYC to be that high. Granted, I expect to pay $200-$300 per night, but there always seems to be sufficient award availability somewhere nice to avoid the $300+ rates.

  9. It’s not about hotels it’s about control. Image President Trump coming before the NYC hotel authorities to ask to build a new hotel in his own home town. Even if you dislike Donald Trump this sort of policing would be very biased toward many people.

  10. @Roger Victor. Thank you for the reasoned response. I do not have a problem with closing Rikers per se. Maybe they should redo the prison.
    –I do have a problem with the $9 billion price tag of the replacement. New York City (NYC) and New York State (NYS) have easy to see financial difficulties going forward due to rising pension costs and spending on almost everything. When the great Mayor Koch saved NYC from bankruptcy, he did so with the help of a then financially solid NYS after the US Government refused to help. Currently, NYS has financial problems, and probably would not be able to bail out NYC. If NYC does not fix its spendthrift ways, it will not be a pretty picture.
    –Second, building the new jails is supposed to take 10 years, but then given the history of the 2nd avenue subway, building the new jails might be a life time job (LOL: for three or four generations).
    –Third, New York City real estate is very valuable. I certainly would not want them to build the jail near me. In line with this, every borough’s community board has already rejected the plan.
    –Fourth, de Blasio’s cronyism is legendary, as you suggested; therefore, I am sure someone is paying him off for every part of the prison plan.

    Maybe they should kick the can down the road until a less corrupt Mayor replaces de Blasio.

  11. Time for De Blasio to go. Everything he shares represents a false image, from his name to his platform to what he claims he’ll be focused on for his agenda

  12. @OJS

    Oh come on. 80% of your posts are trolls, and now you want to be serious?

    Yeah I support closing Rikers. It needs to go.

    As for congestion based pricing, well, when I go to NYC I take Amtrak and use the subway. So this fool’s money may or may not be soon parted. But if you want to discourage (or encourage) behavior, in the USA, money is a great way most of the time. Europe does it in some of the major cities. Hell, in DC, we have congestion based tolling on some of the roads.

  13. @Dan. You live in the swamp the DC swamp. That explain it. Oh, if you think any of my posts are trolls, you are an arrogant fool.

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