Greetings once more. I trust you’re either rejoicing in a well-deserved getaway or eagerly anticipating one.
For a significant amount of individuals, the notion of holidays equates to exploring lodgings such as apartments or homes through online platforms, rather than conventional hotel reservations.
Airbnb leads the pack in this sphere, holding an estimated 50% of the market. The platform emphasizes certain benefits such as experiencing local cultures more genuinely, or the sense of feeling right at home. Undeniably, choosing a home stay does provide more flexibility compared to hotel stays.
However, there’s a hidden cost to this arrangement. The dwelling that you’re occupying for your holiday makes one less available for locals seeking long-term housing in the same areas. According to a 2018 report by the comptroller of New York City, property owners could earn the equivalent of a month’s rent from a long-term tenant in just 11 days of short-term letting. This issue is becoming increasingly prevalent.
The rise of these platforms can somewhat be attributed to the disruption they caused in the global hotel industry which had been stagnant for several years in terms of improving client experience and cost. As such, growth in the private short-term letting sector has been substantial.
These services also afforded homeowners a convenient way to complement their income according to their daily schedules. However, these initial intentions can become blurred with the progression and expansion of the business model. Originally, the concept of Airbnb revolved around homeowners offering their rooms or beds to budget-conscious holiday seekers. However, with the influx of mainstream travellers and families, the demand for complete apartments and holiday homes has surged.
The landlords’ profiles have evolved too. In a recent statement, Airbnb highlighted that the platform’s hosts are typically “daily families” who rent out their primary residence for around three nights a month, and averaged an annual earning of over €5,600.
It was also revealed that over half of the hosts in Ireland utilise the platform to cope with the escalating cost of living and more than one third stated the additional income assists them with rising energy costs and mortgage repayments.
While it may indeed be accurate, there’s no denying the escalating presence of professional and corporate landlords on short-term rental platforms like Airbnb. In recent times, anyone using these services is likely to have encountered hosts far removed from the image of modest homeowners.
This development has sparked a wave of opposition from local residents across Europe, North America, Dublin, and other popular tourist areas in Ireland. The surge in short-term lettings leads to a shortage of long-term rentals or homes to buy, compounded by hiked rental prices as locals are displaced by increasing visitor numbers. This situation depletes the ‘local colour’ these platforms value so highly.
Over-tourism has sparked widespread protests, not only due to the lack of accommodation but also the influx of tourists arriving via cruise ships, often adding an average of 3,000 people at a time onto already congested streets. Certain popular destinations also suffer from the impact of insensitive visitor behaviour, which serves as a protest magnet.
Politicians are paying increasing attention to this issue. Notably, the abundance of short-term holiday rentals in cities where affordable housing is scarce sends a problematic message. Housing crises are far from unique to Dublin.
The mayor of Barcelona, Jaume Collboni, recently pledged to phase out all short-term tourist letting licenses by late 2028. This move is anticipated to return 10,000 apartments to the residential market. Stringent control measures like these have been implemented in cities as varied as Paris, Florence, Berlin, Amsterdam, Montreal, Honolulu, San Francisco, Singapore, New York, Scotland, and of course, Ireland.
Ireland enforces fairly tight regulations for short-term rentals, defined as stays under 14 days, within the 61 rent pressure zones in the country. These zones include not just significant urban areas but also places like Mullingar and Westport.
Renting the family home out for short-term lets exceeding a yearly total of 90 days, or for any duration in a second home, constitutes a requirement for planning permission. Promises of even stricter legislation have been voiced for two years now, with a certainty of including compulsory registration of short-term accommodation providers with Fáilte Ireland, and mandating a registration number on all online listings.
For property owners and online platforms, failure to comply with registration could result in fines of up to €300, and potentially, court fines up to €5,000. Globally, this form of registration, favoured by most industry players including Airbnb, is becoming more common as it promotes transparency in the sector.
This, in turn, ensures adherence to tax laws in markets that have been historically flexible in this regard. It is expected to strengthen health and safety standards, which are typically already closely maintained as a part of doing business.
The Irish law further proposes stricter short-term rental planning regulations. However, specifics about these regulations remain uncertain, leading to unease for business owners in the short-term rental market.
Through these changes, the government aims to convert around 12,000 of the 30,000 properties currently listed on online platforms into long-term rentals.
However, with tourism being a vital contributor to the Irish economy, particularly in rural and remote parts of the western state, striking a balance between alleviating housing crises and not harming one of the state’s largest employment sectors is crucial for policymakers.
In response, Airbnb highlights the effect on hotel rates in regions with stringent short-term rental rules. In New York, where rentals are only allowed if the guest shares the residence with the homeowner, and in Scotland, where stricter rules have resulted in a lower number of licenses granted, this has led to a 9% increase in Edinburgh’s hotel prices in one year, based on an industry report.
Globally, short-term rentals have brought many benefits for travellers and property owners. However, due to housing pressure and overtourism concerns, we are witnessing a gradual shift towards increased control over these rentals—regulating who can stay where and at what cost.
Despite the possibility of spending more or earning less, hosts and travellers are seeking clear regulations to better plan their activities.
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