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What do we gain and what do we lose without a short-term travel accommodation rental market?

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Illustration, Photo: Shutterstock
Illustration, Photo: Shutterstock
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

Mayor of Barcelona Jaume Colboni announced plans to ban short-term rentals on June 21, 2024. in the city starting in November 2028.

The decision is intended to solve what Colboni described as "Barcelona's biggest problem" - a housing crisis that has forced residents and workers out of the market.

The intention is to return to the real estate market 10.000 apartments that are currently listed as short-term rentals on Airbnb and other platforms.

Barcelona is not the only city that strictly regulates – or even bans – short-term rentals specifically.

It has become illegally from September 2023, it is illegal to rent an apartment short-term in New York unless you are registered with the city and present in the apartment while someone is staying there – a change that was also made to alleviate the crisis in the real estate market.

Berlin banned Airbnb and short-term accommodation rentals back in 2014, bringing them back under the strict restrictions 2018. years.

In many California coastal cities, including Santa Monica, short-term rentals are either banned or severely restricted.

It's all part of a bigger story: worldwide, Airbnb, which dominates the short-term rental market with more than 50 percent of all online reservations, and others, including VRBO, Booking.com and Expedia.com, are facing criticism while questions are being raised Who is tourism for?, and where the line lies between equal benefits for tourists and locals.

Since its founding in 2007, Airbnb has been a major revolution in the travel industry, offering flexible rental accommodations in cities around the world with the promise of "living like a local" that hotels couldn't match.

In recent years there has been severe reactions on this brand, which has been blamed for the spike in property prices and the impact on locals who feel they are forced to live next to unregulated hotels.

But what do we gain and what do we lose without a short-term travel accommodation rental market?

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"Short-term rentals give you the opportunity to stay in a location that's a little more authentic," says Lucy Perrin, travel editor and hotel specialist at The Times.

"It's usually less sterile, and the more local experience and prices can obviously be more affordable. It usually works well for families, groups, and more adventurous travelers. Those who are looking for something safe, who know exactly what they're going to get, tend to stay in hotels."

It seems obvious that excluding short-term rental accommodation from the tourism market will lead to to higher accommodation prices for tourists.

"I would be surprised if hotels didn't take advantage of this situation," she adds.

For Caitlin Ramsdale, from the family travel platform Kid & Coe, there is only one obvious loser: families.

"You have a lot of groups for whom hotels as the only option just don't work," she says.

"Although the hotel industry has worked hard to become family-friendly, the room layout and pricing don't work for most families (especially those with two or more children) looking to take a short vacation to a big city."

"There has to be a way to balance the goals of cities while also catering to these travelers – it's a huge loss for parents who want to introduce their children to the world."

The question is: does banning or restricting short-term rental accommodation actually reduce housing prices or affect the contingent of available properties at all?

Study Harvard Business Review on the impact of New York's ban, published early last year, concluded that in this case, short-term rentals are not the ones contributing most to high rents and that regulation, rather than bans, would bring greater benefits to the city and residents alike.

One obvious result of the city's ban is that hotel room rates have soared to record highs, on average. 300 dollars per night.

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So why do tourism and city authorities continue to do this?

Perhaps the real reason is that it's not just about numbers, but also about the attitude of local people towards tourism.

Spain is at the epicenter European overtourism crisis, with locals vocally opposing what they see as a tourist industry from which they have no benefit, in destinations such as Malaga, Mallorca and Canary Islands, just like Barcelona itself.

In many ways, it seems like an echo of the "second home" debate that has raged for decades in places like Cornwall.

In heavily touristed destinations, where locals are routinely priced out of the market, forcing them to live in caravans or commute hours each day to work, it seems extremely unfair to find local towns flooded with holiday rental apartments that go unused for much of the rest of the year, when locals could benefit more from them.

This is not the only problem causing the housing crisis – stagnant wages, especially for public sector workers, and limited housing construction programs are also to blame – but it is probably the most visible.

In British Columbia, Canada, Premier David Abe succinctly described the situation as he explained new rules for short-term rental accommodation.

"If you renovate and resell homes, if you buy homes to rent them out short-term, if you buy homes to sit empty, we send you a message consistently, publicly, and over and over again: Don't compete with families and individuals looking for a place to live with your investment money."

Successful on paper or not, these bans send a signal to locals that politicians are listening to their complaints and that they are more important to them than tourists.

There is, however, an alternative to direct bans.

Many destinations, including Berlin, limit owner-occupants to a maximum period of 90 rental days during the year.

This allows them to continue to earn additional income, but at the same time prevents them from buying up a contingent of properties and turning them into permanent short-term rental accommodations.

A problem for all countries moving in this direction, including Great Britain, which suggests something similar, is in the regulations.

How to do that and how much extra does it cost to do that?

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However, it seems that this news is very bad for travelers.

When it comes to restricting short-term rentals, hotels and guesthouses seem to be the main winners in the story, where supply exceeds demand, and they can charge whatever prices they want without much competition.

But Perin can also see the advantages based on experience.

"I think banning short-term rentals will turn travel to cities like Barcelona into something more authentic," she says.

"When locals are pushed out of the city center, the atmosphere and culture can be lacking. This will offer a better experience."

"It will also force travelers to be more inventive about the parts of the cities they stay in and perhaps lead them to cities where they can travel from place to place. In the long run, I think it will offer a richer experience for tourists and less animosity among locals, which is a good thing all things considered."

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