Hotel industry mounts attack on Airbnb with House bill

Airbnb and other short-term rental companies are worried that new legislation in Congress would require them to police their own rental platform and crack down on users.

The fight between the hotel lobby and rental platforms like Airbnb is entering a new phase as lawmakers on Capitol Hill weigh legislation that threatens companies that advertise short-term rentals.

The powerful American Hotel and Lodging Association (AHLA) and tech companies have been facing off in cities and states across the country in recent years, but that battle is now heating up in Washington as lawmakers and regulators weigh a host of measures to address home-sharing services.

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In the House, a recently introduced bill would strip online rental websites like Airbnb, HomeAway and Flipkey of federal protections that for years have given internet platforms legal immunity over content posted by third parties.

The Protecting Local Authority and Neighborhoods Act, introduced by Rep. Ed Case (D-Hawaii) on Friday, would make internet platforms liable when they host advertising for short-term rentals that violate state and city laws.

The measure is a top priority for the AHLA, which has spent more than $1.6 million on lobbying this year and has four firms on retainer, including Fierce Government Relations and Peck Madigan Jones.

Association members also pressed lawmakers to back the legislation during the group’s annual fly-in on Wednesday.

“For far too long, these Big Tech short-term rental platforms have been hiding behind this antiquated law in order to bully and threaten legal action against local elected officials who are simply trying to protect their residents from illegal rentals that are destroying neighborhoods and access to affordable housing,” AHLA President and CEO Chip Rogers said in a statement.

The group has a strong ally in Case, who was senior vice president and chief legal officer at Outrigger Hotels Hawaii from 2013 to 2018 and previously served on the AHLA’s board.

In a statement, Case criticized the short-term rental industry, saying it is responsible for “the loss of affordable housing as residential units are converted to transient accommodations for tourists.”

“Many of the owners and operators of these units are failing to comply with basic consumer safety, public accommodations and tax requirements that the legal lodging industry has had to follow in order to conduct its business,” he added.

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Case said that he resigned from the AHLA board in 2017 and has had “no further personal or professional engagements with the visitor industry (other than for representing a district where tourism is the top economic generator and private employer).”

His bill already has bipartisan support. Republican Reps. Pete King (N.Y.) and Ralph Norman (S.C.) are co-sponsors, as is Democratic Rep. Raja Krishnamoorthi (Ill.).

The measure now awaits action from the House Energy and Commerce Committee, where Chairman Frank Pallone Jr. (D-N.J.) and ranking member Greg Walden (R-Ore.) sent a joint letter last month to U.S. Trade Representative Robert Lighthizer urging him to avoid including language in trade agreements that’s similar to the federal third-party protections for internet platforms known as Section 230 of the Communications Decency Act (CDA).

“Sec 230 is meant to enable platforms to take down harmful content. It should not be a shield for inaction,” Pallone tweeted in May in response to news of Facebook addressing political disinformation.

The hotel-rental fight over Section 230 comes as the tech industry is facing increased scrutiny in Washington on a number of fronts; lawmakers in both parties have called for revisiting web companies’ internet protections.

President Trump signed a bill last year that limits the immunity of Section 230 on platforms that knowingly host content that promotes or assists human trafficking and prostitution. The White House is also reportedly working on an executive order to address anti-conservative bias on the internet that could affect Section 230. 

The short-term rental lobby is gearing up for a fight against the bill, pushing back on multiple aspects of its provisions. One of their arguments is that the battle should be at the local level.

The Travel Technology Association, the trade group that represents Expedia, Airbnb, VRBO, Booking.com, Priceline and Trip Advisor, argues that Section 230 is the wrong way to address the issue.

“Amending the CDA for every special interest, such as the hotel lobby, is a flawed approach,” Steve Shur, president of the association, told The Hill. “In the context of the broader conversation around Section 230 and legitimate societal challenges, to associate vacation rentals in the same conversation with extremism, illegal gun sales and the opioid crisis is outrageous in its assertion and downright ludicrous to even suggest.”

The group said its first step is to educate lawmakers about the legislation.

“The motivations behind this bill are clear — to serve the special interests of the hotel lobby — and Congress shouldn’t take the bait,” Shur said.

The bill is the latest battle in a long-running fight between the hotel industry and the short-term rental platforms, with hoteliers lobbying for tougher restrictions on businesses like Airbnb in cities and states across the country.

In Washington, the D.C. Council gave preliminary approval to a bill in October that would regulate Airbnb and other short-term rental companies but delayed passage because the measure, introduced by Democratic Councilman Kenyan McDuffie, was predicted to cost the city $104 million over four years. It would impose strict limits on property owners from short-term rentals on second homes, spare bedrooms or basements.

Companies that deal in short-term rentals argue they are working with local governments to address concerns.

“Expedia Group believes in sensible regulation for all segments of the travel ecosystem—including short-term rentals. We are working closely with cities and states on fair and effective policies that address community concerns, encourage compliance, and support local vacation rental homeowners and managers,” Philip Minardi, Expedia Group’s director of policy communications, said in a statement.

Expedia owns Hotels.com, Hotwire, Trivago, Orbitz and Travelocity, among other brands, and has spent $560,000 this year on lobbying.

Minardi noted that cities like Seattle and Louisville are implementing policies that work well for both short-term rental companies and the hotel industry.

“Unfortunately, the policy introduced today would jeopardize the important collaboration that’s taking place at the state and local level,” he said of the Case bill.

In the weeks ahead, Minardi said, Expedia will reach out to policymakers so they “understand the proactive work that is being done to craft fair and effective policies across the nation and the impact that this proposal would have on those efforts.”

 Shur, of the Travel Technology Association, called the Case bill a “hotel-backed proposal by a former hotel lobbyist turned member of Congress” and a “blatant attempt to do the hotel industry’s bidding … with the hopes of stifling competition from the innovative companies that have helped make short-term rentals and home-sharing popular.”

He added that the CDA “maintains a reasonable standard for e-commerce.” 

Tech companies have long praised Section 230 protections as clearing the way for the growth of the internet.

Steve DelBianco, president of e-commerce trade group NetChoice, which promotes free speech on the internet, called Section 230 “the greatest internet law that no one’s ever heard of.”

He said issues with short-term rentals should be addressed at the local level.

“Congress should not get involved with how the city of Austin, Texas, enforces its lodging and local zoning laws against property owners,” DelBianco said. “But Congress is being pulled into this competitive conflict because Section 230 is a federal law and bars local governments from imposing liability on a platform for commerce and communication that came from users.”

Carl Szabo, NetChoice’s general counsel, argued that Case’s bill would encourage platforms to be less responsive to take down content of bad actors, which is a component of Section 230 and could lead to platforms not doing any moderation at all, similar to how 8chan operates.

“This bill would create disincentives for short term rental platforms to engage in active, aggressive, monitoring of homeowners,” he said.

Like others in the short-term rental lobby, DelBianco said NetChoice plans to educate lawmakers “on the general hazards of punching holes in Section 230.”