At $500 a night, your comment appears to be false. Additionally, the people that live there will have a harder time competing with people who can afford to live there part time at accelerated rates - which means, on average, the place next door is threatening to drive up rent everywhere around it.
You can't say I'm false and justify it by citing a single price. What would a hotel have cost?
I don't understand your second point at all. But remember, prices are "set" by firms competing for the lowest price/best value, not by "what the market can bear." There should be no reason rents will go up.
Why compare it to the average? This is a $8,000 a month apartment. A hotel room equivalent would definitely not be $281. More importantly, if this wasn't a good deal, why explains it being booked all the time?
