Many Airbnb users who booked in New York City this Christmas are looking for a new place to stay.

According to the Associated Press, the company announced plans to cancel and refund bookings for stays after December 1, after long-planned regulations to curb illegal short-term rentals in the city took effect on September 5.

The regulations that caused uproar among travelers and short-term renters require Hosts must be present for stays of less than 30 days, with no more than two people allowed to stay in an apartment at the same time. Hosts must also register and get approval from the city – otherwise both hosts and booking sites face hefty fines.

Travel industry website Skift estimates that short-term Airbnb listings in New York City fell 77% from June 4 to September 10, likely sending many looking for new places to stay.

“Last week we experienced the strongest booking pace for the next six months than we have ever seen since 2015,” Kevin Davis, CEO of JLL Hotels & Hospitality Americas, told Squawk Box. Asia” Monday.

“Also, if you look at Google searches for hotels in New York City, they are up 24% in the last week compared to the last 60 day period,” he said. “We’re seeing tremendous interest in people staying in hotels in New York City.”

Hotel prices in New York will rise

New York City has more than enough hotels to meet traveler demand, Davis said, citing an unprecedented supply of new hotel rooms in the city.

“Since 2020, 10,000 new hotel rooms have been delivered, and another 10,000 new hotel rooms will be delivered to the city in the next few years,” he said. “So there are absolutely more than enough hotel rooms to accommodate all the tourists who want to come to New York City.”

But with most short-term rentals off the table, hotel prices will likely rise, Davis said.

“The message to your viewers is that if you’re thinking about coming to New York City, you should make the reservation sooner rather than later,” he said. “We expect that prices are likely to increase, particularly as we move deeper into the city this year.”

Demand is also being boosted by a drop in airfares in the United States as airlines try to boost falling travel demand, Davis told CNBC’s Mandy Drury.

“In New York City, for example, fares were down 14% in August compared to July,” Davis said. “If you look at airfares from major cities in the U.S. to New York City, they are down about 17%, so consumers are definitely seeing a reduction in airfares today.”

Domino effect

From London to Paris to Dubai, cities around the world have regulated short-term rental markets.

But New York’s regulations go further than most, raising concerns that other cities could take similar measures.

“It’s entirely possible that they could follow New York City’s example,” Davis said. “But my best guess is that they will probably see what happens in the next six to 12 months in terms of enforcement and what impact that has on the city before similar laws are actually passed in other cities.”

What we’re seeing now in short-term rental space is, frankly, a correction.

Kevin Davis

CEO, JLL Hotels & Hospitality Americas

Stricter short-term housing rules are on the table in the United States — in cities like Atlanta, Dallas and New Orleans, Davis said — as well as places like Florence, Italy, and Melbourne, Australia.

During the pandemic, many homeowners have marketed their properties on Airbnb to make money at a time of unprecedented demand for short-term rentals from vacationers, Davis said.

“What we’re seeing now in short-term rental space is, frankly, a correction and a reversion to the mean,” he said. “Leisure travel is now beginning to decline and, as a result, many markets are seeing a slowdown in demand for short-term rentals.”

CNBC’s Chiew Tong Goh contributed to this report.

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