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Lobbyist money flows to push legislation to end ban on hostels in NYC, and attract tourists

2019-08-25

A hostel booking company spent $345,000 to push the City Council to pass a law ending a ban on low-priced, rent-a-bed dwellings, paving the way for international chains to get rich off New York tourism. (ullstein bild/ullstein bild via Getty Images)

It’s not your average bunch of rag-tag backpackers.

A hostel booking company spent $345,000 to push the City Council to pass a law ending a ban on low-priced, rent-a-bed dwellings, paving the way for international chains to get rich off New York tourism.

And now, Council members Mark Gjonaj (D-Bronx) and Margaret Chin (D-Manhattan) introduced a bill that would do just that, calling for the Department of Consumer Affairs to set up an office to license and regulate hostels.

Council members Mark Gjonaj (D-Bronx) and Margaret Chin (D-Manhattan)
Council members Mark Gjonaj (D-Bronx) and Margaret Chin (D-Manhattan) (New York Daily News/New York Daily News)

“This is making sure that we continue to support a very important part of our economy, and that’s tourism,” Gjonaj, who chairs the Council’s Small Business Committee, told the Daily News.

“This is going to give resources like Bronx Zoo, Botanical Gardens, Orchard Beach — just to name a few that are in the borough of the Bronx — creating a hostel will allow for visitors to come and enjoy these incredible parks at a very affordable means.”

Hostels are currently illegal due to a 2010 state law that changed rules for class-A multiple dwellings to end illegal Airbnb rentals, but which also clamped down on hostels. Gjonaj’s bill would put hostels in another class and establish safety and sanitation standards for them. He’s championing 2015 legislation introduced by former Councilman Mark Weprin (D-Queens).

Dublin-based Hostelworld.com hired Empire Government Strategies to lobby for the measure.

“The reality is that local legislatures and local governments work a certain way,” said Cathy Thomson of Hostelworld.com. “If you’re not based there and you don’t know how that works, it’s like anywhere — you want someone who can explain that to you.”

The company spent $90,000 lobbying Gjonaj and Councilman Robert Cornegy (D-Brooklyn) last year, and paid Empire Government Strategies $75,000 to lobby Chin and other lawmakers in 2017; $105,000 on lobbying in 2016; and $75,000 in 2015, according to city filings.

Jerry Kremer of Empire Government Strategies said after he lobbied to legalize hostels for nearly seven years, Gjonaj’s role as chair of the Small Business Committee made him a logical person to target. He said he’s also been in contact with hostel chains including Germany-based Meininger and London-based Generator.

“There’s about eight target companies that would love to come here and create jobs and take care of that younger group” of potential hostel customers, he said.

But the hostel industry could face opposition from the Hotel Trades Council, which spent $182,097.89 lobbying Council members on issues including hostel legislation in 2015.

The Hotel Trade Council, which is part of the AFL-CIO union, declined to comment.

Kremer said he’s been in talks with reps from the hotel sector, adding, “We’re willing to accommodate some of their suggestions.”

With tourism booming — the city is expected to see a record 67 million visitors by the end of summer, according to the city’s tourism agency — there’s enough business to go around for both hotel and hostel owners, said Thomson.

“We’re all part of the accommodation and tourism ecosystem in any city,” she said. “Where there are a lot of hostels, everybody works together symbiotically.”

A government watchdog noted the big bucks raise fundamental questions about Gjonaj’s bill.

“When you have a group spending hundreds of thousands of dollars over years, it creates a perception that their voice is amplified because of the money they have,” said Alex Camarda, a senior policy adviser at Reinvent Albany. “It raises questions about whether the issue is being considered on the merits or because of the money spent by the lobbyists and the company.”

Gjonaj rejected the criticism. “I understand the concern (about) lobbyists, but there’s a purpose for them," he said.

“Just because a lobbyist approaches you doesn’t really determine whether or not we support something.

“The opportunities that hostels offer to the tourism industry throughout Europe is incredibly successful,” Gjonaj said. “We should be looking at ways where we continue to thrive and allow anyone to visit and enjoy the great experience of New York City regardless of their wherewithal.”