Express Sessions Explores Airbnb and the Impact on Hotels and Motels

Sag Harbor Village Trustee Aidan Corish speaks during the Express Sessions on the local rental market and Airbnb on Friday. Michael Heller photo.

With the rise of Airbnb and Homeaway — and competitive pricing — local hoteliers say they are already feeling the impact on not only their businesses, but the community, and argue that the home rental service does not have a place on the East End.

“It does creep into our market, but I don’t see it being stopped because it’s everywhere,” explained Dot Capuano, assistant general manager of Barons Cove in Sag Harbor. “There is a worry, but I think that people that are looking to do Airbnb are looking for something a little bit different.

“With us, I feel that people want to have more of a resort feel, and they want the one-stop shop” she continued. “They go and they know they get great linens, there’s really great, delicious food here, and there’s a pool. It’s the whole package. With Airbnb, you don’t really know what you’re going to get.”

Sag Harbor Inn proprietor Nathiel Egosi has quoted 20-percent losses since 2016, with last year the most devastating of all, he said, even on the heels of a recent renovation.

“This isn’t fake news or somebody’s imagination of what’s going on. They’re calling us up and they’re also looking at the Airbnb website at the same time. They’re looking to beat the system, so to speak,” he said. “There’s a lot of people in the Village of Sag Harbor who do not care how it impacts my business, because they don’t own my business. Their attitude is, ‘Tough luck, Charlie, it’s your problem, not my problem. I’ve got my own problems.’ But here’s what’s important to me: this is my hometown, and I look at things from that perspective.”

At the Express Sessions last Friday, Leigh Gallagher, a senior editor at large at Fortune magazine and author of “The Airbnb Story,” said Airbnb is changing the ways hotels do business. “When it comes to Airbnb, [they] are selling rooms for the night,” she said. “That’s what hotels do. …it’s become very negative, but [Airbnb] is thrilled with the way the company has grown. The hotel industry realized there’s an appetite for this. Hotels are finally coming to realize, ‘Let’s claim some of this for ourselves.’”

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Judi Desiderio, a licensed real estate broker and CEO/President of Town & Country Real Estate noted that in some parts of the South Fork, hotels and motels are few and far between. “We’re not Miami,” she said. “We don’t have hotels, motels. We don’t have places for people to come in and visit our area. We are in this quandary. The public also wants to maintain the quality of this area.”

The dip in business is less of a bother to Mr. Egosi than Airbnb’s effect on the village overall, he emphasized, citing groundwater, safety and tax revenue concerns.

“At the end of the day, Airbnb circumvents the essence of community living and community support. Renting rooms, garages, attics or entire homes that are unregulated, untaxed, unmonitored and often unsafe are counter to the decades of building and preserving our wonderful village,” Egosi said. “Communities nationwide, including here in New York and Long Island, all recognize regulation is needed — and it needs to be quick. Town of Hempstead totally banned it. Period. They do not want any adverse impact on the quality of life, and they do not want to get involved with the loopholes and nuances of spending town money to pay lawyers to write it up. Simple, ban it.”

In lieu of a complete ban, Mr. Egosi said he would support regulation that mandates a minimum 30-day rental period in registered, owner-occupied homes that collect sales, sewer and occupancy taxes, and provide proof of liability insurance.

“Some people have a hard time making ends meet, and this is an opportunity for them to make some money. So, fine, regulate it, let those people make some money,” he said. “I see the benefits, but the question is, who is it benefitting? I’m happy to see it benefit those people who need the money, I get that. But then they have to be there, so they can monitor what is going on.”

At Express Sessions, Sag Harbor Village Trustee Aidan Corish said the village would try and strike a balance between an outright ban and protecting local businesses and residential neighborhoods. “We would think of drawing a distinction between Airbnb where the owner is present and where the owner is not present. … At what stage does this cease to be a residence and become a commercial enterprise,” he said. “This is a much bigger conversation we need to have in Sag Harbor.”

Being in the hotel industry, Ms. Capuano said she would favor an outright ban, as well, and anticipates that the Airbnb effect is only a matter of time.

“Obviously, the more and more people do it, it’s possible that it could become the norm,” she said. “But I still think people like to just go to places and enjoy themselves, which isn’t guaranteed with Airbnb.”

Last July, a couple found themselves at Baron’s Cove after reserving an Airbnb nearby. They had left the second they arrived, Ms. Capuano said.

“It looked nothing like the pictures. They told me that they were honestly afraid to stay there,” she said. “So they wound up booking with us and staying for a week, and having a magnificent time. So those are some of the things you have to be weary of, as well. You may get there and it’s not exactly what you were looking for. There are pros and cons to both, and you have to see what fits you the best.”

Additional reporting by Christine Sampson