NEW ORLEANS -- The short-term rental business operators like Airbnb said business is booming this Jazz Fest. However, the housing craze is getting a cold reception in some neighborhoods where disapproving signs have showed up.

Jazz Fest continues to be a crowd pleaser bringing music lovers to town from around the world. Many tourists enamored by the unwavering hospitality of New Orleanians. However, this year signs frowning upon short-term rentals and their impact on the city are popping up in the Seventh Ward and in Mid-City next to the Fairgrounds. Businesses are also feeling the short-term rental pinch.

“It’s very discouraging because these people can just open their doors, collect money and put it right in their pockets,” said Bonnie Rabe, Innkeeper at the Grand Victoria Bed and Breakfast on St. Charles Avenue.

For the first time ever some members of the Professional Innkeepers Association of New Orleans are seeing Jazz Fest room vacancies. Rabe blames sites like Airbnb and VRBO operating illegally in the city.

“Twenty percent of PIANO members have vacancies over Jazz Fest that's a substantial number. These are all small businesses that took out substantial loans, hired staff,” said Rabe, who normally hires three people to help her during festival season. This year she could only employ one.

On Friday, Airbnb wrote an open letter on its website saying Jazz Fest business is booming in 15 neighborhoods across New Orleans. The company said it anticipates about 20,000 visitors to New Orleans this Jazz Fest and added that's two and half times higher than last year.

The Alliance for Neighborhood Prosperity New Orleans is also seeing an uptick in business. The group is made up of property owners in favor of short-term rentals.

“Over the two weekends of Jazz Fest we're going to host over 100,000 visitors in New Orleans,” said Eric Bay with the Alliance for Neighborhood Prosperity (ANP). “These are people who chose to stay in a private rental.”

One ANP member even posting a note of support to tourists on the Alliance's Facebook page to counter the negative signs appearing around town.

Bay said the group is willing to pay city taxes for short-term rentals and points to the potential revenue being lost by the City of New Orleans this Jazz Fest.

“That was almost $5 million in room revenue that we received as operators,” added Bay. “If the City was able to put a nine percent tax on that, I'm not a mathematician, but I think that's $750,000. If we’re licensed at a minimal amount maybe $250,000.”

As Jazz Fest does what it does best, the illegal short-term rental market continues to be felt in very different ways.

“In 18 years that I've been in this business, never have we seen properties with holes in their schedule at Jazz Fest time,” said Rabe.

That’s not the case with members of ANP.

“Most of us are booked for Jazz Fest next year, these are not fly by night visitors,” said Bay. “Five out of twenty-eight of these are educated, higher echelon people.”

Airbnb says the company will generate an estimated $17 million in economic activity for New Orleans during Jazz Fest.

City leaders are still trying to iron out new laws to better regulate short-term rentals.

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