Platforms such as Airbnb are now offering refunds for Christmas bookings
The alternative to hotels – short-term accommodation in private apartments for rent – suffered a heavy blow. After decades of disputes between the hotel industry and city governments around the world and platforms like Airbnb, this business was banned in New York. And this is expected to have an impact all over the world.
On Sept. 5, city government regulations went into effect that make it nearly impossible to rent out and use housing for short-term stays, such as 3, 5, 10 or 30 days. They are designed in such a way that they do not prohibit the activity of such platforms in principle, as attempts have been made so far in other major cities around the world. But they complicate their use so much that it
becomes almost impossible
Owners are required to reside in the property itself while guests are in it for less than 30 days. In addition, it is prohibited to rent it to more than two people at the same time. And the hosts themselves must be expressly approved by the city government, otherwise both they and the booking sites owe hefty fines – $5,000 for the platform and $1,500 for the host.
The rules are from last year, but when they were published, Airbnb sued the city and state of New York. But about a month and a half ago, he lost the case. All this is happening at a time when in the US the prices of plane tickets are going down. In New York in August compared to July they decreased by 14%. And flights from major US cities to New York are about 17% cheaper. Fall is sure to boost this trend because it’s generally a season when airlines lower prices to encourage travel.
The tourist market reacted immediately to the ban. Currently, if one types New York into Airbnb’s search engine, unusually few offers for such a metropolis come up. And most refer to places quite far from Manhattan or any other part of the city. Predominantly rooms for 1 person. The situation is the same in the Vrbo and Booking platforms.
Airbnb has already announced that it is canceling reservations and refunding paid amounts for accommodation after December 1, i.e. if anyone was planning to spend Christmas in the Big Apple and had already paid for an apartment, they would have to urgently find another place to stay. The tourism website Skift estimated that listings for short-term Airbnb rentals in New York fell by 77% from June 4 to September 10.
At the same time, hotels are booming
“Last week, we saw the strongest six-month forward booking rate we haven’t seen since 2015,” Kevin Davis, executive director of JLL Hotels & Hospitality’s Americas, told CNBC. According to him, hotel demand for the last week alone has increased by 24% compared to the last 60-day period.
And when asked if there are enough hotel rooms, he answers that since 2020, 10,000 new ones have been equipped, and in the next few years another 10,000 are expected in the city. And he adds that if anyone is thinking of visiting the city, you will need to make your reservation early because hotel accommodation prices are expected to increase in the near future.
In the US, stricter rules for short-term accommodation are also being discussed in Atlanta, Dallas and New Orleans.
Bad times are coming for Airbnb in many other places around the world as they undercut hotel prices.
This battle had subsided during the pandemic,
when many hotels were also closed and people did not travel. But tourism has already recovered almost to 2019 levels. In fact, in many places in Europe, short-term rentals are already restricted, though not in the way that New York did.
In Vienna, for example, from July 2024 home owners will be limited to renting to tourists for a maximum of 90 days a year. We are talking about the whole city, because in some areas such a restriction has been applied since 2018.
In Paris, if a local resident wants to rent out his home, he must register it with the municipality, and there he is warned that he can only do so for up to 120 days a year. For a longer time, he must register his home as a place of accommodation of a certain category.
In Berlin, a ban on the use of Airbnb was first introduced, but it was later lifted and a limit of 90 days per year was imposed. In Munich the limit is 8 weeks and in Stuttgart – 10.
Italy is also struggling with short-term rental platforms, though not always because it’s competition from hotels. In cities like Florence and Venice, for example, this is a measure against over-tourism. In Amsterdam, home owners can rent them out to tourists for no more than 30 nights a year.
In Portugal, restrictions on short-term rentals are trying to regulate the housing market because property prices have risen so much that they are becoming unaffordable for ordinary people. (See also in the text on the 2nd p. page).
In Spain, the only city that has completely banned any short-term rental platforms is Barcelona, as of 2021. In Palma de Mallorca, it is only allowed if it is an entire detached single-family house, but not an apartment . In Valencia, the ban is only for the historic center of the city.
In Bulgaria, the recent public unrest surrounding Airbnb literally preceded the outbreak of the pandemic in 2020 by a month. Since then, no one has thought of trying to introduce bans or restrictions on the short-term rental of apartments.
In November 2019, at the proposal of the then Minister of Tourism Nikolina Angelkova, a change was made to the Tourism Act. She predicted
registration of such properties in the municipality
such as uncategorized accommodation and payment of patent tax as well as tourist tax. Plus the introduction of a fine between 500 and 5000 BGN for persons or companies that provide tourist services without registering the residence.
It was also written in the project that the consent of at least 50% of the neighbors in the block where there are such homes is needed, and this was also voted on in the second reading in the departmental tourism committee. But when the texts reached the plenary hall in February 2020, then GERB MP Dimitar Boychev asked for the withdrawal of the last proposal and the hall supported him.
A lot was said in the heated debates. For example, Hristo Prodanov from the left, who later became acting minister of tourism, stated that there are thousands of low-cost tourists in the centers of large cities,
who are not customers of the big hotels
By hitting the short-term rental business, we are actually hitting the restaurants, the stores, the taxi companies, the museums, he said. And his colleague Yavor Bozhankov – then also a deputy from the BSP, stated that these changes were suggested “by a hotel lobby”, which, however, did not realize that it was about a completely different type of customer, who were never theirs.
In the end, only the registration regime was adopted. But there is no known case of any municipality registering such a property. For the simple reason that it had to be written into an ordinance that never saw the light of day during the ensuing pandemic and frequent change of governments. But
the disputes are yet to come,
because in our country regulations are made more slowly than in the rest of the world.
The introduction of restrictions will affect 2,792 apartments that are offered through the Aibnb platform in Sofia alone and perhaps three times as many throughout Bulgaria.
According to official data on the platform itself, occupancy in these apartments is lowest (40%) in January and highest (70%) in August and September. The average income of the owners of these apartments is $512 per month, reaching $622 in August and September.
2023-10-04 10:51:00
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