Following the implementation of a short-term rental ban in New York City last year, neighboring cities such as New Jersey have reported significant economic growth. This ripple effect has benefited not only short-term rental owners but also a wide array of other industries due to increased tourism.
Industry experts are now pondering whether the travel sector should shift its focus towards these “second cities,” which could present lucrative opportunities for both corporate and leisure travel businesses.
Gareth Matthews, CMO at Didatravel, a global travel distribution provider, suggested that the appeal of second-tier cities is largely driven by affordability. “It’s not just about short-term rentals but also about providing competitively priced accommodations in less saturated markets, which could result in higher yields due to reduced competition,” Matthews explained.
However, the volatile nature of the hospitality industry, highlighted by such regulatory changes, poses challenges. Alex Barros, Chief Marketing & Innovation Officer at BEONx, noted that hoteliers need to diversify their offerings. “The ban has led to increased hotel prices in New York City and possibly in surrounding areas. Hoteliers must be prepared for these fluctuations by offering additional services that can supplement revenue,” Barros stated.
Ayşe Yaşar, VP of Sales at Bedsopia, emphasized the enduring demand for short-term rentals. “The situation in New York and New Jersey confirms the strong market demand. For travel intermediaries, securing a robust supply of these rentals is crucial, and partnerships with the right suppliers are essential,” Yaşar added.
Chris Hovanessian, Senior Product Manager at Cloudbeds, highlighted the importance of catering to the specific needs of guests who use second cities as a base for exploring major nearby destinations. “Offering early breakfasts and bundled transit passes can significantly enhance guest experience, making it easier for tourists to enjoy day trips to primary attractions like NYC,” Hovanessian recommended.
Lastly, Manuel Núñez from Servantrip pointed out the importance of offering activities in these emerging destinations. “In second or third-tier cities, providing tours and activities can greatly enhance guest satisfaction and lead to repeat business,” Núñez advised.
As second cities continue to benefit from spillover effects of policies in megacities like New York, the travel industry may need to recalibrate its strategies to tap into these growing markets effectively.
The article New York City’s short-term rental ban spurs growth in neighboring cities first appeared in TravelDailyNews International.