It will create too many similar domains. None will have traffic, so you are buying a brand.
Well, in the first place, opening up an infinite amount of TLDs could solve the problem of "shortage" in "brandable" domain names. Atleast a solution was made possible by ICANN.
If they don't have traffic, then they are not supposed to be a nuisance to anyone surfing the internet since you will rarely stumble upon these websites anyway.
It's like a "don't care" factor in the internet world. People will continue to live their normal internet lives without even realizing gazillion domain names with exotic extensions were recently added.
It's up to the OWNERS of these exotic domains to SPEND the time, effort, and money, to promote their newly acquired domains.
Your problem will only start to surface when they begin having traffic, competing with you on search results, and gaining prominence in social media marketing blitz.
I think most existing domain owners are scared of the POTENTIAL competition from these new TLDs (which is a possibility).
After all, if you honestly believe none of them would ever gain traffic or top search rankings, then all these talk would be nothing but hogwash.
Domain owners are scared that their com/net/org portfolios would eventually get devalued. There is still a "scary" spot inside of them that they probably are in denial which is why this issue is dragging. If something is not a threat, then just bring it on, right?
I won't be scared of added competition.
I WOULD be scared if the rules were changed that will give certain competitors (especially the new entries) the advantage.
What is better?
Hotels.NYC
NewYork.Hotels
NYC.Hotels
NY.Hotels
There are too many confusing options.
People will not have the option to choose which is better. They will let Google choose which is better.
If it is confusing, humans will not spend the effort to even try to "remember" which is better.
They will just BOOKMARK the first ones they find appealing to them. The rest will be thrown into the garbage can.
Again, what i do believe will make sense: If a person is searching for "
hotels in bahamas" on Google, it would make sense if Google will return the .hotels domains first. The logic is valid, since .hotels is a restricted extension where owners are screened for authenticity that you actually belong to the hotel industry and not just a domainer with scraped content trying to game the system.
If Google does that kind algorithm change, then the COMs are toast. So far, i have only read "opinions" of seo specialists. I haven't read anything official coming out of Google promising they won't change their algos in favor of "domain extension priority segregation".