On the battleground


Tennessee hoteliers take on short-term rentals

Hoteliers operate in a competitive industry home to dozens of franchise brands, independent properties, online travel agencies, and short-term rentals (STRs). Many AAHOA Members are first- and second-generation hoteliers running businesses that vie for market share in the same town where friends and families run their own lodging establishments.

In recent years, STR platforms facilitated a boom in the home-sharing market. As these platforms have grown, so too have their efforts to influence state and municipal policy. AAHOA’s state and local government affairs teams have worked coast to coast on advocacy campaigns to ensure a level playing field with STRs. And when STRs poured thousands of dollars into lobbying the Tennessee General Assembly in March 2022, local AAHOA Members got engaged.

The issue arose when House Bill 645 passed through Tennessee Senate and House Committees. While it was making the rounds, the legislative sponsor added last-minute amendments, drawing a groundswell of opposition. HB 645 intended to take the authority of short-term rental properties away from Nashville and hand it over to the state. For residents of Nashville, this legislation threatened to strip the city and neighborhood organizations of their authority to regulate the quantity and location of STR properties. And for hoteliers, the bill would have placed STRs outside of the local tax and regulatory oversight their properties are subject to, creating an unfair competitive advantage.

The bill was focused on the city of Nashville, a vibrant cultural centerpiece of Tennessee and home to a lucrative tourism market. According to www.data.nashville.gov, a site run by the Metropolitan Government of Nashville and Davidson County, Tennessee, the city has issued nearly 13,000 short-term rental permits. While the bill was targeting Nashville, it would have set precedent for similar legislation to preempt the authority of other cities and towns across the state.

AAHOA partnered with Hospitality Tennessee and other local organizations to communicate HB 645’s damaging provisions to members of the General Assembly. AAHOA Members on the ground played a critical role in educating Tennessee’s elected officials. They reached out to their legislators, encouraged others to take action, and made their voices heard. Working together, AAHOA Members sent more than 400 letters to the Tennessee legislature. The bill was defeated in committee by a vote of 18 to 1.

Janak (Jay) Patel, a Tennessee-based AAHOA Member, was one of the dozens of hoteliers driving the grassroots campaign forward. “Airbnb touts their platform’s tax revenue in the hallways of the General Assembly as a justification to strip our cities’ ability to regulate the lodging industry,” Patel said. “Hoteliers are living here, running our business here, and we are making sure our concerns are being taken seriously. AAHOA Members really rose to the occasion to oppose this bill and we’ll be on top of the issue again should it come up next session.”

As the STR platforms try to advance their legislative agendas, it is imperative that state, local, and municipal governments maintain the ability to tax, regulate, and manage STRs in their communities. AAHOA’s Government Affairs team is dedicated to ensuring our members can own and operate their businesses on a level playing field.


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