Why Is Airbnb So Expensive In NYC: Is Airbnb Worth It In 2024

If you’ve ever tried to book an Airbnb in New York City, you’ve probably experienced a moment of sticker shock. It’s like opening your monthly credit card statement, except instead of silently judging your own spending habits, you’re questioning the audacity of strangers to charge so much for what amounts to a glorified broom closet with “exposed brick charm.”

As a New York native, I’ve grown accustomed to NYC being a place only the cast of the “Succession” would be able to afford. However, I’d like to break down the “why” behind these eye-watering prices when it comes to Airbnbs. New York City, especially the downtown, has become the land of the expensive and home to the cramped. Space is as scarce as a cab in the rain, and everyone wants a piece of it. Landlords and hosts, in their infinite wisdom, realize they can charge exorbitant rates because, well, they can. Demand outstrips supply, and in the Big Apple, that supply is less “Apple” and more “core.”

Now, the Airbnb market in NYC isn’t just competing with itself. It’s up against hotels that charge as though their rooms dispense liquid gold. So, in a city where a cocktail costs as much as a small car in the Midwest, Airbnb hosts are playing the same game. It’s the New York way: if you’re going to overpay, overpay with style.

But the real question is, is it worth it? In the past, sleeping in someone else’s bed was definitely a cheaper alternative than booking a hotel in NYC. But, as of of 2024, opting for an Airbnb in NYC can be like choosing between a rock and a hard place, but with better interior design. On one hand, you get a more “authentic” New York experience, complete with a quirky landlord and a chance to live like a real New Yorker (which, as we know, is synonymous with spending too much money on too little space). On the other hand, the prices can make you feel like you’re personally funding someone’s retirement plan (and, to an extent, you are).

So, is Airbnb worth it in New York City in 2023? It’s a mixed bag. For those seeking a slice of NYC living, it’s a chance to dive headfirst into the city’s vibrant heart. But for the budget-conscious, it’s an exercise in self-restraint and possibly a quick lesson in why “affordable New York Airbnb” is an oxymoron. Let’s look at the issue more closely.

The Evolution of Airbnb: From Couch-Surfing to Cash-Surfing

Once upon a not-so-distant past, Airbnb was the digital equivalent of asking a friend if you could crash on their couch. A friendly, almost utopian concept, it promised a cozy corner in a stranger’s home, often for less than the price of a New York City diner breakfast (well, almost). Back then, the platform was a haven for budget travelers and homeowners with a spare room and a need for extra cash. It was a charming, novel idea, but in reality, the writing was on the wall for residential neighborhoods.

Fast forward to 2024, and the narrative has taken a sharp turn down Wall Street. Airbnb in NYC is less about sharing and more about economics. The platform has been swept up in the whirlwind of market forces, transforming from a humble bed-sharing venture into a sophisticated, profit-driven marketplace. In this metamorphosis, NYC, a city that never does anything by halves, has become a glaring example of Airbnb’s evolution.

This transformation is reflected not just in the types of properties listed, but in their prices as well. The once-modest offerings have expanded to include luxury lofts in Tribeca, renovated brownstones in Brooklyn, and penthouses with views that make the Empire State Building look like a quaint little structure. These aren’t just rooms; they’re fully-fledged, professionally managed accommodations that rival the city’s top hotels in both luxury and, unfortunately for our wallets, price.

The reasons behind this shift are as complex as a New York subway map. Demand plays a significant role. NYC is a global hub for tourism, business, and let’s not forget, escapism. The city attracts a diverse range of visitors, from the starry-eyed tourist to the weary business traveler, all willing to pay a premium for a slice of the Big Apple life, even if it’s just for a night.

Airbnb and the Local Law: A Dance of Dollars and Regulations

In the ever-evolving tango of New York City’s laws and the short-term rental market, there’s a new step to learn. January 2023 marked the debut of New York City’s Short Term Rental Registration Law. Under this new regime, hosts must register with the city to offer rentals shorter than 30 days, and there’s a catch – they must be physically present in the home during the rental, sharing living quarters with their guests. Imagine the awkward breakfast conversations!

law 18 nyc
UNITED STATES -July 12: Airbnb hosts hold a press conference/rally outside New York City Hall to speak out against current short-term rental regulations and call on the City to revisit the rules to allow New Yorkers to share their homes. The Press conference/rally was held on City Hall Park on July 12, 2023. More than 10,000 Airbnb listings for short-term rentals in New York City are likely to disappear when tight new housing rules take effect. (Photo by Luiz C. Ribeiro for NY Daily News via Getty Images)

This law, Local Law 18, brings more than a bureaucratic headache; it radically changes the short-term rental landscape. It introduces a prohibited buildings list and limits occupancy to a cozy two guests per rental​​. The city started enforcing these rules on September 5, 2023, requiring hosts to be registered or have Class B status to continue hosting​​​​.

Now, let’s talk impact – and it’s more dramatic than a New York Broadway show. Wired reports a staggering 70% drop in Airbnb listings​. In real numbers, this means about 4,000 short-term rentals vanished from the market, a significant chunk of the approximately 23,000 listings that existed pre-law​​. Moreover, since launching its registration portal in March, only 10% of short-term rentals have been approved under the new law​​.

What does this mean for pricing and availability? Picture this: fewer Airbnbs, more demand for the remaining legal options, and, naturally, a potential uptick in prices. It’s a classic case of supply and demand, with a New York twist. Tourists might find themselves paying more for their NY experience, or perhaps opting for a hotel instead. For the city, it’s a balancing act between regulating a booming market and maintaining its tourist-friendly allure.

Comparing Costs: Airbnb vs. Traditional Hotels in NYC

In 2024, the choice between Airbnb and traditional hotels in NYC isn’t about cost; it’s a dance of convenience, amenities, and the overall experience. Airbnbs used to be a beacon of savings compared to hotels, but not anymore. However, the landscape has evolved. Airbnb’s average daily rental rate has increased by 35% since the pandemic, dampening its reputation as the budget-friendly option​​. For longer stays, Airbnb becomes more cost-effective due to discounts and reduced impact of one-time fees like cleaning charges, which can be steep for short stays. The average seven-night stay at an Airbnb is 32% cheaper per night than a one-night stay​.

Bar Lounge in a skyscraper in New York City

Generally, hotels are more economical for short-term stays and for solo travelers or couples. A NerdWallet study found that for two adults, hotels are on average 29% cheaper than an Airbnb. However, for larger groups, Airbnbs tend to be more affordable, with costs for six adults being 33% lower than booking three hotel rooms.

  • Transportation: Hotels might offer shuttle services and are often located in walkable areas, whereas an Airbnb may require additional transportation arrangements​​.
  • Staff Availability: Hotels usually have more readily available staff and services, which can be a deciding factor for those who value immediate personal assistance​​.
  • Food and Additional Costs: Cooking facilities in Airbnbs can save on meal costs, but hotels sometimes include breakfast. Also, consider additional fees like resort fees at hotels or cleaning fees at Airbnbs​​.

While Airbnb can offer a more personalized, homely experience, especially for longer stays or larger groups, hotels provide convenience, standardized amenities, and often better pricing for short stays or solo travelers.