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Impact of short-term rental regulation on hotel industry: a difference-in-differences approach

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  • Yeon, Jihwan
  • Song, Hyoung Ju
  • Lee, Seoki

Abstract

While short-term rentals such as Airbnb have experienced very rapid growth in recent years, many local governments have been introducing intensive limits, restricting its operations. For example, in 2016, New York State prohibited listing an advertisement for illegal short-term rentals, which has raised an interesting of question whether the regulation affected the performance of the hotel industry or not. This paper, therefore, aims to examine the impact of the short-term rental regulation on hotel performance in an affected state. This study conducted a difference-in-differences technique in comparing the performance of hotels in New York and Washington D.C. Results show that the regulation had a positive ripple effect on the performance of lower-scale hotels.

Suggested Citation

  • Yeon, Jihwan & Song, Hyoung Ju & Lee, Seoki, 2020. "Impact of short-term rental regulation on hotel industry: a difference-in-differences approach," Annals of Tourism Research, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:anture:v:83:y:2020:i:c:s0160738320300839
    DOI: 10.1016/j.annals.2020.102939
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    Cited by:

    1. Thanasis Stengos & Michael L. Polemis, 2020. "Threshold effects during the COVID-19 pandemic: Evidence from international tourist destinations," Working Papers 2005, University of Guelph, Department of Economics and Finance.
    2. Boto-García, David & Balado-Naves, Roberto & Mayor, Matías & Baños-Pino, José Francisco, 2023. "Consumers' demand for operational licencing: evidence from Airbnb in Paris," Annals of Tourism Research, Elsevier, vol. 100(C).
    3. Bobrovskaya, EV. & Polbin, A., 2023. "Econometric modeling of the demand for short-term rental housing: The case of Airbnb in Moscow," Journal of the New Economic Association, New Economic Association, vol. 59(2), pages 64-84.
    4. Jiafeng Gu, 2024. "The impact of national tourism day festivals on inbound tourism: A spatial difference-in-differences approach," Tourism Economics, , vol. 30(2), pages 417-441, March.
    5. Bozana Zekan & Ulrich Gunter, 2022. "Zooming into Airbnb listings of European cities: Further investigation of the sector’s competitiveness," Tourism Economics, , vol. 28(3), pages 772-794, May.
    6. María Barrero-Rescalvo & Ibán Díaz-Parra, 2024. "Short-term rentals’ supply-side structure and the struggle for rent appropriation: Insights from Andalusia, Spain," Environment and Planning A, , vol. 56(2), pages 508-524, March.
    7. Lin, Chinho & Paengsri, Parinyakorn & Yang, Yiwen, 2023. "Impact of China’s National Sword Policy on waste import:A difference-in-differences approach," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 887-903.
    8. Polemis, Michael, 2020. "The impact of COVID-19 on hotel performance: Evidence from a Difference-in-Differences approach," MPRA Paper 102053, University Library of Munich, Germany.
    9. Michael L Polemis & Panayiotis Tzeremes & Nickolaos G Tzeremes, 2023. "Hotels’ occupancy rates and convergence: Empirical evidence from the first pandemic wave," Tourism Economics, , vol. 29(2), pages 533-542, March.
    10. Di Matteo, Dante, 2021. "Effectiveness of place-sensitive policies in tourism," Annals of Tourism Research, Elsevier, vol. 90(C).

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