There is nothing quite like a family squabble the week of Thanksgiving. While not quite family, Marriott International and Airbnb are trading blows over Marriott CEO Arne Sorenson's comments regarding the home-sharing company's desire to fight regulatory action. The interview prompted Airbnb’s head of public policy, Josh Meltzer, to send a letter to Sorenson accusing the hotel company of using taxpayer money to subsidize hotel development. This letter was delivered after Sorenson said in an interview last week that Airbnb is quick to involve itself in public affairs, and just as quick to respond to changes in the regulatory climate.
“I don't know that I see that they're more willing to concede," Sorenson said during an interview with Fortune. "They're spending a lot of money on government affairs and they're playing pretty aggressive. I've had letters from Airbnb directly, demanding my response about some charge, I don't even know what it is, within hours. That's pretty aggressive, and I'm not going to respond to that."
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In Meltzer’s letter to Sorenson, which has been obtained by CNBC, Meltzer said Sorenson is “unwilling and unable to defend your industry's longstanding commitment to price gouging consumers, depressing wages and replacing workers with robots,” and accused Sorenson and the rest of the hotel association of launching “a series of misleading advertisements regarding safety and security.” Meltzer also alleges Marriott received $1.73 billion in taxpayer subsidies between 2008 and 2017, and suggested a portion of that has been used to fund Sorenson’s $12.3 million in earnings throughout 2016.
The battle between the largest hotel company and the largest home-sharing company has seen its share of public dust-ups, with a leaked report earlier this year from the American Hotel & Lodging Association detailing the hotel industry’s plan to curb the growth of Airbnb through regulatory action. Marriott, Hilton and Hyatt Hotels Corporation were named as members of the group taking part in this scheme. Since then, several major cities have taken part in ad campaigns and regulatory changes in opposition of home sharing, with one New York advertisement suggesting home rentals could be used to shelter terrorists.
There are a variety of anti-home-sharing advertisements Meltzer could be referencing, but two were released by the Hotel Association of New York City and allies in the ShareBetter coalition. One ad, titled “What Else Are They Hiding?” claims Airbnb fails to conduct full background checks on hosts and guests. Another, “The True Face of Airbnb,” claims the company shields illegal commercial operators, such as former Donald Trump campaign manager Paul Manafort, from regulation and law enforcement.
“One of Airbnb's hallmarks is its penchant for secrecy. While touting transparency and spending millions to promote its website – which attracts many unscrupulous commercial operators – Airbnb steadfastly refuses to cooperate with city agencies to stop illegal activity on its site allowing thousands of transient tourists to gain access to residential buildings, creating a danger to our communities,” New York State Assembly Member Linda B. Rosenthal (D-Manhattan) said in a release. “By sharing the addresses of short-term rental locations, Airbnb would demonstrate its commitment to New York's safety over its own profit, but it continues to refuse. If there’s nothing to fear, then there should be nothing to hide.”
Meltzer’s letter to Sorenson also comes one week after Morgan Stanley released a report finding “privacy and security concerns” at Airbnb have increased since 2016. The report also shows the rate of Airbnb adoption has slowed, though it still increased 25 percent over the past 12 months. The report said this deceleration is a result of growing awareness in the U.S. and Europe causing adoption to top out, as well as concerns about privacy and safety.
“We continue to believe that Airbnb does represent a headwind for the broader U.S. lodging industry, though with penetration rates slowing, we see the structural threat as lower than we previously thought,” the report states. “Our model implies Airbnb is having less of an impact on traditional hotels' [revenue per available room] in the U.S. and Europe. We now forecast 2018 U.S. RevPAR growth of 2.3 percent (up from prior 2 percent), which now contemplates a 50-basis-point headwind from Airbnb (prior 80 bps). For 2019, we expect RevPAR growth of 1.6 percent, which incorporates an additional 40 bps Airbnb headwind and a stable economic backdrop.”