It wasn’t looking good for hospitality stock Airbnb (NASDAQ:ABNB). Airbnb has made much of its status as the “anti-hotel” over the years, but it was facing some serious trouble in New York. However, conditions on the ground changed substantially, and now New York is pulling back on some of its rules while summer travel season is in play. That was good enough for Airbnb investors, who sent shares up nearly 6% in Monday’s trading.
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New York, as only New York can do, set up a new municipal law that required Airbnb hosts—or rather, “hosts of short-term rentals”—to register with the city for an operating license. Airbnb, in a move to protect both its hosts and its bottom line, stepped in to block the new regulation earlier this month. Legal wrangling ensued—not to mention the arrival of a lot of immigrants moving into around 50% of New York hotel rooms—and thus, New York City pulled back. New York announced its intent to not fine anybody over the operating license matter until September 5.
Airbnb, for its part, calls the new rules “overly complex” and a “…violat(ion) (of) privacy rights…” thanks to the sheer amount of personal information that the licensing forms require. The new move, additionally, comes at a time when the agency that would be tasked with enforcing such a law—the Mayor’s Office of Special Enforcement—is at half strength. Reports from The Gothamist noted that only 13% of submitted applications had even been reviewed. Seven applications were denied as they were connected to rent-regulated apartments, which are barred from participating in such activity.
Analysts are somewhat split on Airbnb’s overall trajectory. With 16 Hold ratings alongside 13 Buys and three Sells, analyst consensus calls Airbnb stock a Moderate Buy. Further, with an average price target of $128.17, Airbnb can offer only slight upside potential.
