Airbnb – and other short-term rental platforms – have long been under fire for pricing local renters out of city-centres in popular tourist destinations. But Barcelona may emerge from the coronavirus pandemic with a better short-term rental market for all.
Trouble on the Horizon
According to a Euronews report in 2019, “the city centre’s residential population has declined 11 percent in the past four years. A major contributing factor is the amount of apartments being rented out to holidaymakers.”
One 2019 paper found that 6.84 percent of all rental properties in Barcelona were listed on Airbnb.
And tourists aren’t necessarily bringing much culture with them. The backlash against tourists that I’ve written about before is not matched by the welcome for immigrants.
“Immigrants bring their culture and contribute to society,” one Barcelona local told me. “Most tourists just come for a few days and take.”
Tourism Down
Travel has been one of the industries hardest-hit by the novel coronavirus pandemic. Many countries have closed their borders completely, while others have shut them to all but citizens or residents. In Spain the latest data show overnight hotel stays in March at 8.4m, down from 21.5m for the same month in 2019.
Some critics of Airbnb may well be celebrating. A recent Wired article indicates that Airbnb – essentially now the world’s largest hotel chain – is suffering along with the rest. “According to AirDNA, an online rental analytics firm, new bookings on Airbnb are down 85 percent; cancellation rates are close to 90 percent,” writes James Temperton.
The Good…
Don’t get me wrong, I quite like the concept of Airbnb. If you have some spare space to rent – which is where the whole Airbnb concept was born – it not only utilizes otherwise unused space, but it also encourages cultural interactions.
Brilliant.
Even if it is a holiday-house rental, it is at least putting otherwise unused property to good use. It possibly even contributes to making some seasonal holiday destinations feel lived-in, year-round. Temperton writes that these Airbnb hosts “will lament the loss of a reliable secondary income.”
…the Bad…
But there’s a whole other business that has sprung-up with Airbnb: professional hosts. Temperton reckons more than half the Airbnb listings in the US are with hosts that have more than two other listings.
And Barcelona is a particularly attractive market for professional hosts because of the large difference between the costs of long- and short-term rentals. Until this crisis, rental arbitrage has been a very lucrative business. Hosts take out apartments on long-term leases and then list them on peer-to-peer sites like Airbnb, and make a very good living, with very little upfront investment. Generally in Barcelona 10 nights of holiday rental income equates to a month’s long-term rental.
…and the Ugly
There are issues though.
Having lived under an (illegal) holiday rental, I can attest that it is more than a little annoying. People arrive at all hours, drag suitcases up stairs, clomp around in high-heels on hard floors, have parties, and generally make nuisances of themselves. If you’re okay getting reliable sleep between 3am and 6am it’s fine. On top of that the host doesn’t contribute anything for the extra wear-and-tear or cleaning of the common areas.
The good news in Barcelona is that the city had already reacted to the explosion of tourist rentals, and has not approved any tourist licenses since 2014. There are 9,600 legal tourist apartments in the city, and after a crackdown that started in 2016, Mayor Ada Colau, a former housing activist, reckons the supply of illegal rentals has dropped by 95 percent.
If you are renting an apartment, do everyone a favour and enter the address at https://www.fairtourism.barcelona to ensure it is a legal one.
Moving Forwards
In 2014 Colau, wrote: “It’s paradoxical, but uncontrolled mass tourism ends up destroying the very things that made a city attractive to visitors in the first place: the unique atmosphere of the local culture.”
“Of course, the answer is not to attack tourism. Everyone is a tourist at some point in their life. Rather, we have to regulate the sector, return to the traditions of local urban planning, and put the rights of residents before those of big business.”
As Mayor she has been working towards those goals. Even in January 2020 Barcelona was looking at ways to boost new attractions to decentralise tourism: “A change of the tourism model will also be sought to reduce passive tourism, relating to sun, sand and partying, and boost aspirational tourism, which seeks experiences relating to culture, gastronomy, architecture and sports.”
A Better Future
While the novel coronavirus pandemic is nothing to be celebrated, it does give cities the option to picture a different, better, outcome at the end of it all.
In some ways that has already started. According to a recent RTE article, the number of long-term rental properties available in central Dublin this year increased 71 percent compared to that same period the previous year (mid-March to mid-April) as “a result of short term lets like Airbnb coming onto the long-term market.”
At the other end, Airbnb CEO Brian Chesky, in a letter to staff regarding layoffs and the company’s response to the downturn, has stressed the company needs a “more focused business strategy.”
“This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences,” he writes.
Barcelona was already working towards a better Barcelona for residents as well as tourists before this crisis. Maybe the silver lining is that this pandemic offers a chance for a reset. Barcelona is set to emerge from the coronavirus pandemic with a better, more equitable, rental market. And it looks as though Airbnb’s plan plays into that. If some professional Airbnb hosts lose their shirts on that journey, it is a small price to pay.