The trend in its European markets is not Airbnb’s friend.
By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.
Airbnb has a big problem on its hands in Europe, its most important market for listings. The region’s bustling tourist destinations are growing increasingly disaffected with tourist rental property platforms as the cons of unfettered tourism — a squeezed housing market, surging rents, overcrowding, overstretched public services and infrastructure, and the erosion of the town or city’s distinctive character — begin to heavily outweigh the pros.
Even one of the supposed main benefits of mass tourism — job creation — is riddled with caveats. As a spokesman for a new campaign group, the Network of Southern European Cities in response to Mass Tourism, points out, “the tourist sectors of the hospitality and catering trade [in Spain] have the worst working conditions: low salaries, fraud in the number of hours declared in the contracts — when there are any — and outsourcing.”
As summer approaches, the backlash is intensifying. On May 18th and 19th, two days of protest will be held across 14 Southern European cities, including Barcelona, Venice, Seville, Palma, Lisbon, Malta and Madrid, all under the unified banner of “Stop the exploitation of our cities.”
In Spain, the rise of “tourism-phobia” risks harming an industry that represents around 13% of the entire economy and has played a vital role in Spain’s economic recovery, accounting for over a quarter of the new jobs created since 2013.
In the Balearic Islands, almost 40% of the new jobs created there since 2013 depend on tourism. But that didn’t stop the islands’ capital, Palma de Mallorca, Spain’s eighth largest city by population, from imposing a blanket ban on all tourist apartments last month.
A week later, the government of Valencia, a region that includes many popular coastal resorts, proposed a law that would restrict licenses for tourist rentals to ground-floor and first-floor apartments. If the law is passed, an estimated 65%-70% of the region’s current tourist apartments would no longer be able to operate legally.
In even bigger markets such as Paris, Berlin and Barcelona, the problems are also stacking up. In Paris, Airbnb’s second largest global destination, the authorities have filed a lawsuit against the company and two other firms for failing to respect local laws regulating holiday rental properties.
Berlin, Airbnb’s ninth most popular destination, has gone a step further by banning whole-home rentals outright, while preserving limited rights to rent out rooms within homes on a short-term basis. According to the Berlin Senate Department for Urban Development and Housing, the measure helped return 8,000 units to the city’s long-term rental market, in the process deflating the city’s rental housing bubble.
As for Barcelona, the home rental platform’s sixth largest market, it will be watching developments in Palma and Valencia very closely. The City Council has been been locked in a three-year battle with Airbnb over unlicensed tourist apartments. In 2017 local residents went so far as to identify mass tourism as the biggest problem the city faces. Now, even in Madrid, a city that at first embraced the recent explosion in tourist arrivals, the Mayor’s office is planning a response to the “AirBnB effect.”
Clearly, the overall trend in Europe is no longer Airbnb’s friend. The constant growth in tourist numbers is coming at ever higher costs to the local population. But that doesn’t mean the company is going to just give up.
It already has a vital ally on its side: the European Commission. According to a report published by non-profit research and advocay group Corporate Europe Observatory (CEO), lobbyists from AirBnB, HomeAway (owned by Expedia), and their principal lobbying group, European Holiday Home Association, are small in number compared to other sectors, but when it comes to influencing the Commission, the EU’s executive branch, they “punch well above their weight.”
Sharing economy platforms have been able to use the EU’s e-commerce directive, which dates back to the year 2000, to overcome some of the policy measures passed against them by local city authorities. Until now local authorities have been able to opt out of at least some of the obligations and limitations in the e-commerce directive on public interest grounds. But that could soon change.
In a meeting with Commission representatives in 2016 the EHHA lodged a formal complaint against the cities of Barcelona, Berlin, Paris, and Brussels, which could ultimately lead to action by the European Court of Justice (ECJ). So far there is no indication that the Commission has referred the case to the ECJ. But lobbying pressure on both continues to mount.
In July 2017, the EHHA sent a “Draft Principle on Regulation of Short-Term Rentals” to the Commission, in which it outlined the sort of regulations it would like to see enacted across Europe. CEO asked to see a copy of the document under EU rules on access to documents, but the Commission refused, citing an exception relating to “business secrets.”
The Commission had already published a set of guidelines that is broadly reflective of the legislative framework sought by Airbnb and other rental platforms. For the moment those guidelines are non-binding, but that could change. Last year, the European Parliament passed with an overwhelming majority a resolution that “condemns” any attempt by local authorities to restrict the supply of tourist accommodation from online platforms. It was yet further proof of how divorced the cosseted decision makers in the EU government bubble are from the regions, cities, and communities they’re supposed to serve and represent.
If Airbnb and other tourist rental platforms ultimately win the regulatory battle in Brussels, local authorities will be rendered virtually powerless to regulate the local housing market and city environment in the interest of the people who live there. But the struggle for the heart and soul of Europe’s cities is unlikely to end there. In fact, if anything, it will merely intensify the simmering resentment and anger many local residents feel toward the platforms, their hosts, and the growing hordes of tourists they accommodate. By Don Quijones.
Amid a blossoming backlash against mass tourism, one place takes extreme measures. Read… Airbnb Just Lost a Limb in its Fourth Biggest Market
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.
Happening in Frisco as well
Airbnb are barking up the wrong tree. The EU will protect hotel trade and Berlin will have its way. Perhaps by some tax on Airbnb as the EU pen pushers needs all the income it can get.
It might work if the EU see it as a convenient way to grab more power.
What they actually say ia somethibg like this:
We like tourists just not the ‘cheapo’ ones that use stuff like Airbnb.
I mean if a tourist uses Airbnb, Uber, cooks their own meals and saves money as much as possible, then is not like they actually contribute muxh to the Tourism economy besides plane tickets, right?
And even then, if they are from a nearby country, they might horrors of horrors drive to our lovely country in their own car!
Cheapo tourists are considered way worse than no tourism at all by a lot of people, save sandwich markers and so on that still make money out of them.
To your point the flip side is if the CEO’s of US corporations are earning 400 x the salary of their worst employees we proles have no alternative to cook for ourselves and use AirBnB / Uber / Drive our own car. I can’t spend it if I’m not earning it! Can I?
When the ‘worst’ employees can create wealth, let them reap the benefits. Otherwise, let them collect their paychecks.
Your comment reminded me of what we used to say to one of my past employers, “You pretend to pay us and we’ll pretend to work”.
He got it. :-)
Paolo, that was one of the jokes that actually originated in the Soviet Union – sardonic and fatalistic humor as a coping mechanism was a distinguishing feature of Soviet culture.
You nailed it as far as I’m concerned. Where I live new arrivals are banding together with community meetings, saying, “We just have to get tourism going”!! I always ask them why? You don’t need the income, and you come from down Island where tourism and over population has already ruined the communities for residents who often go back generations. Plus, the jobs are all minimum wage. It won’t keep young people here and they can’t afford to live on what is paid.
The worst are cruisers with power boats. They buy absolutely nothing and then flush their toilets on the way out of harbour. Seems to me it isn’t too much for any society to ask visitors to stay in hotels/inns, (even campgrounds), and use the occasional taxi or train. BnB is another form of neighbourhood camping as far as I’m concerned. What’s wrong with small hotels or inns? It’s not like the tourists are masquerading as locals.
The local residents must be absolutely furious.
It’s happening in the US, too. Creative people work hard to make their city thrive. Then the tourists and the real estate speculators come and ruin everything by pushing out the very people who made it a desirable destination in the first place. Airbnb tempts greedy landlords and real estate speculators to turn into unregulated short term rentals the little downtown apartments that were the homes of people who prioritized experiences over property acquisition. Airbnb and the people who patronize it are helping change the world into one big suburb with nothing but corporate businesses, cheapo affluent people (because hey, news flash, low income people don’t travel for entertainment), and homeless. And the idea that it’s low cost is bullshit. Every city has hotels that are just as inexpensive as private apartments rented out on Airbnb. If you want to come to a city, stay in private home whose former residents can no longer live there, cook your own meals, and drive around spewing pollution instead of using public transportation, why don’t you just stay home and make the place you live nicer, the way the people you are pushing out did with our cities? We, the locals, hate you!
Oh come on, now. they open their Schengen doors to unfettered and undocumented immigrants from the south and east in numbers untold, actually changing the “distinctive character” of the cities and towns, namely, their safety, and we are supposed to believe that they are really bothered by tourists that rent out airbnbs for a couple of weeks then go home?
I’ve taken no less than 10 trips to Europe in the past seven years, including eight different countries, and it isn’t the tourists that are changing the distinctive characteristics of old Europe.
Go to Poland You will love it Donald Rumsfeld was correct about something When he coined the phrase “ New Europe”
Recent migrants changing the distinctive characteristics of Europe? Who are you trying to kid here? Locals can’t even afford to live in those areas, and you try to convince us there is a significant presence of migrants in those highly praised touristic areas of the cities?!?!
Govts cannot claim necessity of preservation of distinctive characteristics of WHOLE towns or cities thus frowning on tourism simultaneously allowing unfettered migration(s) of thousands of permanent alien residents from foreign lands with foreign customs and foreign worship systems, displacing/disrupting labor and housing markets of entire native populations.
The tourist hordes are disturbing Europe. How interesting. It would be just so much better if these local cities can set up a go fund me site and have the $$$ rolling in without actual tourists. Those people are so bothersome and they destroy the culture.
They displace your culture.
So allegedly muppets have no money, and yet vacation numbers are off the chart, hence the protests.
So do muppets have money or not?
There are plenty of people with lots of money. And there are plenty of people with no money and lots of debt. Society is stratified.
I wonder. I’m no spring chicken but can’t afford to retire. But my body is shutting down. Maybe now is the time to live the dream and max out. Leave a not so decrepit corpse while my credit is still good.
It’s definitely a consideration.
Yeah, but that does not support the narrative that people are worse off. Percentages wise, things are either the same or better. Vacation is after all a luxury. If visitors continue to increase that means more people have more money than not, right?
Chinese? There are 1.3 billion of them. I’m starting to see a whole lot of Chinese tourists around here. Nice folks, young mostly. With better English than the French tourists.
I am flying to Barcelona next week. I’ll let you know how many Chinese tourists they are. The last time I was in Paris, the French seemed to have an aversion to English. If you speak English directly in small stores, you’ll often get a chilly reception, but if you open with Parlez vous anglais, service gets better right away.
One time though I mistakenly said Parlez vous francais, that got me a laugh and super fantastic service.
Also I haven’t noticed a marked increase in Chinese tourists in SF and I work on Market Street and would often pass Powell on the way home.
Workers need housing.When rents are 60-80% of net income
they have no choice but to lash out.The target maybe wrongheaded
but that is all they can see.
Homeless are everywhere. What are you people thinking? Soylent green?
Feed them and they will come. Seattle is contemplating a 75 million dollar business tax to build more homeless accommodation because so many have been welcomed and are sleeping in public spaces and soiling the streets. Suicidal policies to buy votes that result in taxpayer revolt.
San Francisco is another example, LA is not far behind, and Toronto is buying houses in residential neighborhoods and moving them in next door to people that have worked and spent to improve their often formerly distressed properties.
And let us not forget – every homeless person requires a bureaucrat to supervise them … a recent budget figure worked out to $50K a head per year for the 5,000 homeless who are accommodated in abysmal conditions, often just a dirty mattress thrown on the floor.
I remember someone mentioning that the population of Barcelona is 1.5 million, tourists are another million!
Wasn’t AIRBNB used for money laundering by Manafort? I heard someone say this is happening in Europe (for exampel, Austria?) too. I am thinking they collect money for guests who “never show” etc.
No go zones are a right wing fantasy.
In The Monkey’s Paw, a 1902 short story by William Jacobs, an old wise man from India placed a spell on a mummified monkey’s paw, granting the owner of said hand threee wishes. However the same wise man also placed a curse on the hand: each wish will be granted with terrifying consequences as a punishment for tampering with fate, as the characters from the short story will painfully learn.
Many places in Europe have betted heavily on mass tourism. And just like the characters from Jacobs’ short story they have discovered the £200 cheque came by the most horrible way possible.
Airbnb and HomeAway are just two vultures feeding on carrion but the local governments which now have to deal with all sorts of mass tourism-generated issues, very often of their own making, are offering them as sole scapegoats to their increasingly infuriated constituents, possibly hoping said constituents will display a typical trait of voters everywhere: very short memories and allowing themselves to be bamboozled by sycophantic local media.
Should Airbnb and Homeaway obey the law? Absolutely. But local authorities should also get serious about giving back to their constituents a remotely livable place.
This means, for example, fining tourists answering Nature’s call on somebody’s doorstep or the bar owners selling spirits and beer to minors. It means the police will answer calls about vandalism quickly and promptly. It means home and restaurant homeowners can kick out people bivouacing on their property without too much cerimony.
As a Yoga practicioner I can say there’s no gain without pain and any politician promising to solve Barcelona’s or Florence’s tourism-caused problems merely by fining Airbnb or outlawing HomeAway belongs to Kissinger’s 95% of the politicians giving the remianing 5% a very bad name.
“Airbnb and HomeAway are just two vultures feeding on carrion but the local governments which now have to deal with all sorts of mass tourism-generated issues, very often of their own making,…..”
Make no mistake, these companies are piling money in to the pockets of Politians. Come to Florida and see it is action. Airbnb are ‘blockbusting’ neighborhoods, and the State is all for it. Look what has happened in Key West. rich buy houses and duplex, kick out the locals working, give it to Airbnb, locals leave town, all for a few bucks Peachy.
I have absolutely no problem believing politicians will sell their constituents at the side of the road. I have worked for a town council in my youth and now I locked with other residents in a war of attrition against those turncoats in town hall.
However to think we are sold to speculators and other assorted shady characters for large sums of money is mostly wishful thinking. It may work that way in Saudi Arabia, Pakistan and China but not in the West.
Corruption exists everywhere and takes infinite forms, often far more odious and insidious than mere baksheesh.
And with that I must bid you good bye and good night.
I’m typing from an Airbnb in Budapest. My wife and I pay $240 a night. It’s a great one bedroom apartment. The airbnb is beyond any hotel we could have stayed at. The location and amenities are top notch.
Interesting observation about Airbnb: We’ve been in Europe for almost two weeks and have stayed at 3 Airbnb’s. All the owners we’ve worked with maintain and run several Airbnb’s. If cities start making it difficult for these people to make money they will probably sell off their apartments. I think the selling pressure and failed mortgage loans would disrupt the real estate market in many of these cities. Be careful what you ask for. Also since Airbnb’s make it possible for families to travel, banning them would cut much deeper into tourism then most realize. Lastly, much of Europe suffers from high youth unemployment rates. Those low paying service jobs might be the glue that keeps young people from thinking too much about their long term problems and what to do about it.
Hmmm … disrupting the real estate market is exactly what is required. If prices came down then locals might actually be able to afford a place to live in.
The problem with tourism is that most of the benefits do NOT go to the citizens of the tourist site.
Laws law everywhere a new law. We work hard creating new laws … while also trying to ignore most natural laws.
To the commenters concerning cheap tourists …your expensive is someone else’s cheap.
People can change the bylaws of their building. We did in NYC. No more parties, “events” and other drugs and prostitution traveling circus.
We don’t have a doorman, it’s a small loft building. Owner was making 2000$/night for events. Absolutely awful . We harassed the owner so much he’s selling. Done. Bye.