• Legislation catching up with sharing

The UNWTO has released a study of the global legislative response to peer-to-peer lodging.
The study was published as Booking.com said that, that on average, seven guests per second were checking into a home, apartment or unique place to stay.
The UNWTO drew on 21 global case studies and noted that most of the measures implemented referred to areas of ‘fair competition’ and ‘consumer protection’, specifically measures related to taxation and registration and permits. In comparison, measures relating to ‘planning and sustainability’, were less commonplace.
The report highlighted the challenges destinations faced in implementing rules and regulations, with a lack of local capacity and a lack of clarity over whose responsibility it is to monitor and regulate short-term tourist accommodation.
UNWTO secretary-general Zurab Pololikashvili said: “With the emergence of new online platforms for short-term rentals, the market has been growing at an unprecedented rate. According to projections, it will continue to outperform the growth of traditional accommodation providers in the coming years.
“There are significantly more regulations than we thought and it is encouraging to see destinations taking the initiative. However, many challenges remain, including the practical implementation of rules and regulations relating to the short-term tourist rental market. Good governance and effective cooperation between the public and private sectors are key to successfully meeting these challenges.”
Cities such as Paris, Amsterdam, Barcelona and New York were among the more active. The study was released as Brussels announced plans to limit the growth of illegal short-term rentals.
Brussels mayor Philippe Close and town planning councillor Ans Persoons told The Brussels Times: “We want to see around a thousand properties back on the rental market by the end of this legislation.
“Airbnbs have become big business, but they are often run by professionals who buy a large number of properties and rent them through the site. Some neighbourhoods are left with fewer and fewer apartments available to rent and the balance between residents and tourists is threatened.”
The pair said that around 7,400 properties in the Brussels region were listed for short-term rental on Airbnb, with 2,200 of them located in the capital itself.
Persoons said: “Most of the Airbnbs in Brussels are illegal and don’t respect Brussels legislation on tourist accommodation. We want to avoid becoming like Paris or Amsterdam, where the site is even more popular. We don’t want just tourists living in the city centre.”
Last month the company said that it had more than 7 million listings in over 100,000 cities around the world, more listings than the eight largest hotel groups have rooms, combined. In 2019, it reported that nearly 1,000 cities have more than 1,000 Airbnb listings; back in 2011, only 12 cities did.
The group added: “Our experience has shown that our community can continue to grow even when strict regulations are put in place. In San Francisco, where one of the most restrictive laws in the country was implemented in 2018, the number of Airbnb listings increased by 22% in one year. Overall, total booking value in San Francisco was unchanged in 2018 vs. 2017, driven by a 42% increase in the number of nights hosted per listing. These metrics reflect the continued strong demand from guests and the ability for our hosts to increase hosting frequency to meet the demand.”
Booking’s announcement came alongside the launch of new tools and product enhancements aimed at the platform’s short-term rental landlords. The group said that, according to its research,
43% of travellers planning to stay in a new type of accommodation this year. Olivier Grémillon, VP, global segments, said: “We have engaged in active conversation with our short-term rental partners to identify ways the short-term rental industry can continue to respond to increasing traveller expectations and an ever-growing appetite for exploration.
“This meaningful dialogue has not only strengthened our relationships and partnerships with the short-term rental industry, but is actually helping to push the industry forward, as we see our partners’ input helping to shape the future of travel. Particularly as homes, apartments and other unique places to stay continue to grow faster as a category than traditional segments, it is exciting to look ahead to see what is next in our partnership, as there is so much potential to grow together.”

HA Perspective [by Katherine Doggrell]: The publication of the latest chapter in a biography of Margaret Thatcher has had folk of a certain political ilk frothing over at how the markets can solve all problems. Supply, demand, maybe a dash of government’s guiding hand and you can cure anything.
So far this has not proven the case with Airbnb, in part because bringing many of the accommodations to market doesn’t involve any significant outlay. You don’t have to build the thing. And because of that, handing over a bit in tax isn’t too upsetting.
The second issue is that many local lawmakers don’t know what they want. Well, they do, they want cash, as the UNWTO found. The fear is that, certainly in the UK, this will be used to bolster the coffers of councils suffering from austerity, rather, than, say, building new homes. Until there is a coherent plan to address these wider issues, legislation will flutter around the edges to the satisfaction of no-one.

Additional comment [by Andrew Sangster]: The UNWTO, in an earlier report published in 2017, refers to “new platform tourism services (or the so-called sharing economy)”, and this sentence captures the lie at the heart of the likes of Airbnb.
These are not, principally, about the sharing economy: they are new distribution platforms which often sneak under the radar of regulatory oversight and sneak between the gaps left by legislation which is failing to keep up with industry developments.
The big question is how sustainable are the business models of these platforms if (surely when) regulation does catch-up with them. I have significant doubts that many will survive, and very few indeed in the form in which they are currently constituted.
The platforms have undoubtedly disrupted markets but the scale and depth of the disruption is questionable. In August, the Wall Street Journal published an article which quoted first quarter growth rates at Airbnb at 30%. While the quarter recorded a loss, Airbnb is adamant that it is EBITDA positive for the year as a whole.
The WSJ article also said that the room nights booked through Airbnb in that first quarter exceeded the number of room nights booked at Expedia. This is the good news. The bad is that Airbnb might be spending something above USD2bn on marketing annually – so much for its ability to acquire guests more cheaply than the big OTAs like Expedia and Booking.
What Airbnb looks to be evolving into is an OTA in all but name. But it is an OTA that is focused on the Long Tail of smaller businesses that cost significantly more to service. How it will succeed in servicing these businesses while generating the profits to justify its current USD38bn valuation is a big question.

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