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OPINION Hotels should fight short-term rentals

While hotels pour money into marketing to try to boost their business, they are acting like they are unaware of the greatest challenge to their business model their industry has ever faced: the conversion of single-family houses into commercial short-term rental “mini-hotels.”

What is happening today to hotels in the coastal zone of California is exactly the same situation that taxi businesses in the U.S. faced in 2010 when ride-sharing began. Back in 2010, taxi businesses were unaware of the potential for ordinary drivers to become instant competition. They thought that local governments would protect their licensed business from a horde of unregulated drivers. But as soon as local governments realized they could make money from Uber, they abandoned taxi businesses for a new money source.

Ride sharing didn’t create new business. It just spread out revenues from basically the same pool of passengers. And by the time taxi businesses realized their revenues were declining, it was too late. Taxi businesses had to accommodate a future with extreme competition, lower revenues, and an eviscerated business model. This was good for consumers but very bad for taxi businesses.

A similar disruption of business model is happening today in the hotel industry with single-family houses being bought by investors and converted to “mini-hotels.” A main reason this is happening is because the California Coastal Commission has mandated that it alone has authority over California’s coastal zone under the banner of “beach access.”

Instead of more marketing, hotel managers in Oxnard would be better off joining forces with groups that are trying to save their neighborhoods from the Coastal Commission and participate more vocally in city meetings that will decide the fate of short-term rentals in the city.

Unlike the taxi industry, hotels could fight their challenge because they are not alone. Most HOAs and many cities in California’s coastal zone are on their side. They just have to wake up and get involved.

Ted Kuepper, Oxnard

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