Three top Democratic senators were working with the hotel industry when they wrote a letter to the Federal Trade Commission last year urging it to investigate Airbnb and others in the "sharing economy."
The letter from Sens. Elizabeth Warren of Massachusetts, Dianne Feinstein of California and Brian Schatz of Hawaii was part of a coordinated, multipronged strategy by hotel lobbyists to use federal regulations to cripple Airbnb, which has emerged as a major competitor to the traditional hospitality industry.
Minutes from a 2016 board meeting of the American Hotel and Lodging Association show that the senators wrote the letter "after working closely with AHLA for several months." The minutes describe the senators' letter as "highlight[ing] our strategy of pushing for transparency while calling out the public policy issues and the need for a level playing field."
The trade group was particularly pleased that it had enlisted the Massachusetts senator's support: "Senator Warren's status as one of the more prominent lawmakers among progressive activists has helped mobilize additional grassroots and political support."
Warren's office declined to answer questions regarding the trade association's claims. Her office issued the following statement: "In the face of a growing affordable housing crisis, we need reliable nationwide information on the rapidly expanding short-term rental market, including data from Airbnb, to understand whether these changes are increasing housing shortages and costs in our communities — and, if so, how to limit those harms. Senator Warren has called on the FTC to use its authority to collect data on the percent of these short-term rentals that are offered by multi-unit commercial operators and make that data publicly available for analysis, and hopes that they do so."
Tom Mentzer, spokesman for Feinstein, told the Washington Examiner that Schatz's office wrote the letter and that Feinstein only signed on to it.
"You'd need to talk to his office regarding with whom they worked and how closely," Mentzer said. "This is an issue Senator Feinstein has been involved with for quite some time. She's very pro-neighborhood and believes an unregulated Airbnb increases rent, decreases housing stock and alters the nature of communities, and those concerns are what led her to get involved."
The existence of the minutes was first reported by the New York Times on Monday. The libertarian magazine Reason published excerpts of them Wednesday. Representatives of Airbnb could not reached be for comment, and Schatz's office did not respond to a request for comment.
The minutes make clear that the trade group views Airbnb, which facilitates people offering their residences as short-term accommodations, as a major economic threat. "Airbnb has grown exponentially in recent years and has an estimated market cap greater than any hotel company, and ... it is the largest player in the short-term rental market."
AHLA sought to cripple Airbnb by "ensur[ing] comprehensive legislation in key markets around the country" and "advanc[ing] federal legislative efforts to level the playing field in specific areas."
Key to this effort was to "aggressively counter Airbnb's 'we're just trying to help the middle-class make ends' narrative." The association would sponsor "personal testimonials of consumer harm through a 'My Neighborhood' paid and social campaign."
"As a trade association, AHLA has a clear mandate and mission to vigorously advocate on behalf of the hospitality industry and its millions of employees," said Troy Flanagan, the group's vice president of state and local government affairs. "It should come as no surprise that we made our board aware of our efforts to protect communities and travelers from the commercial operators who use websites like Airbnb to run illegal hotels in residential properties, ignoring common-sense zoning and safety regulations and civil rights laws that all lodging businesses must follow."
The senators' letter to the FTC, sent in July, asks the commission to "study and quantify the degree to which the rapidly expanding short-term lodging rental market consists of persons or firms acting in a commercial manner by renting out entire residences or multiple residences simultaneously." In other words it wants to know whether Airbnb hosts really were mostly regular folks renting out a room or were professionals using the company's brand to escape regulations. The hotel industry has pushed the latter argument, often citing a 2014 report by the New York Attorney General's Office, which Airbnb has disputed.
The FTC released a study in November covering Airbnb and ridesharing companies such as Uber and Lyft. The commission found that "participants and commenters generally report that platform suppliers in both sectors are typically individuals or small entities, who are collectively numerous and diverse." The report was not definitive, however, and the commission indicated that further study was needed.
As far as the broader public was concerned, the FTC could find no alarm. "Overall, the comments were overwhelmingly positive regarding the sharing economy — about 90 percent of commenters made positive statements about the sharing economy. This included about 1,500 positive comments about Airbnb." The majority of the negative comments (nearly two-thirds), it found, came people competing with Airbnb.
The minutes also offered clues as to how the association was able to enlist Warren to go to bat for it, stating that it was "actively coordinat[ing]" with labor groups, though it does not specify which ones. Airbnb has been targeted by service industry unions, which represent many hotel workers.
In April 2016, the company entered into talks with the Service Employees International Union to create a cooperative agreement that would require Airbnb hosts to use only unionized housekeepers. The union also wanted Airbnb to support the $15 minimum wage movement, which is primarily financed by SEIU. However, the talks fell through after a few days. That was three months before the senators sent their letter to the FTC.
Federal Election Commission reports show that the hotel industry association's political action committee donated $5,000 to Feinstein's Fund for the Majority PAC in 2016. Schatz has received $17,500 from the group since 2013, FEC filings show.