Residents, authorities, hoteliers grapple with global sharing economy

Spain’s Balear­ic Islands has announced it will pen­al­ise land­lords for illeg­ally rent­ing apart­ments to tour­ists with fines of up to 40,000 euros (~US$47,000). Rent­ing apart­ments without a licence was banned in the Balear­ic Islands in 2012, how­ever enforce­ment was lack­ing which is per­haps a big reas­on why rent­al prices in Palma de Mal­lorca have ris­en 40% since.

This tough new stance comes amid a pop­u­lar back­lash against mass tour­ism across Spain, includ­ing of course, Bar­celona. Along with Venice, Italy, the Span­ish city has prob­ably attrac­ted the most unwel­come atten­tion from the world’s travel & tour­ism trade media for its over-tour­ism woes.

In isol­ated cases the back­lash has become so viol­ent that it presents a real phys­ic­al threat to tour­ists. Last week, masked mem­bers of Arran ambushed a sight­see­ing bus in Bar­celona, slash­ing its tyres and paint­ing slo­gans on the win­dows. Win­dows of five-star hotels were broken and bicycles ren­ted out to tour­ists were dam­aged. And in Palma, Mal­lorca, protest­ors let off smoke bombs and ran through res­taur­ants before break­ing win­dows. Arran appar­ently wants to bring about the “end of the cap­it­al­ist sys­tem and glob­al injustice” and believe that mass tour­ism is des­troy­ing cit­ies and “con­demning the work­ing classes of the Catalan Coun­tries to misery”.

Bar­celona. By Ilkka Har­man­en (CC BY 2.0) via Flickr.

In the UK, the Asso­ci­ation of Brit­ish Travel Agents (ABTA) has been very out­spoken. Com­ment­ing on the attack in Bar­celona, ABTA chair Noel Josephides told The Times: “These protests are a wake-up call. It is a great shame but we will see more of them. They are adopt­ing dan­ger­ous tac­tics and that shouldn’t be hap­pen­ing. But the reas­on it is hap­pen­ing is because the loc­al gov­ern­ments haven’t been listen­ing or tak­ing over­crowding seriously.”

And ABTA CEO Mark Tan­zer, speak­ing about a phe­nomen­on seen by many to be a major con­trib­ut­or to over-tour­ism — the shar­ing eco­nomy — told Radio 4 that the pre­val­ence of web­sites like Airb­nb meant gov­ern­ments could no longer eas­ily reg­u­late tour­ism num­bers which had tra­di­tion­ally been con­trolled by hotel licences.

Sources: Reu­ters; MSN; TTG.

Let’s take a hop, skip, and jump through the media to see what’s been hap­pen­ing recently in oth­er parts of the world. It is clear that some des­tin­a­tions are strug­gling more than oth­ers to adapt to the shar­ing economy.

Leveling the playing field in the Caribbean

Across the Atlantic from Europe, two Carib­bean des­tin­a­tions are tak­ing a pro­act­ive and pre-empt­ive approach to reg­u­lat­ing the shar­ing eco­nomy. A val­id con­cern of tra­di­tion­al accom­mod­a­tion pro­viders (and taxi drivers in the case of ride-shar­ing) is that the products offered by reg­u­lar people are not bound by the same licens­ing and tax­a­tion regulations.

Col­our­ful Cur­açao. By Nelo Hot­suma (CC BY 2.0) via Flickr.

That would be why the Cur­açao Hos­pit­al­ity & Tour­ism Asso­ci­ation (CHATA) advoc­ates for “a level play­ing field” where all tour­ism industry stake­hold­ers exer­cise their respons­ib­il­ity by adher­ing to laws and pay­ing taxes. CHATA Pres­id­ent & CEO Miles Mer­cera reck­ons this is the destination’s top pri­or­ity as tour­ism should be a col­lect­ive effort.

CHATA thinks the Carib­bean nation could be col­lect­ing more than 10 mil­lion guild­ers (~US$ 5.6 mil­lion) annu­ally by intro­du­cing and enfor­cing tight­er reg­u­la­tions. These funds would con­trib­ute to air ser­vices and tour­ism mar­ket­ing budgets, which are seen as lack­ing in the country.

Bar­ba­dos Tour­ism Product Author­ity (BTPA) CEO Dr Kerry Hall has poin­ted out that tra­di­tion­al accom­mod­a­tion pro­viders use shar­ing web­sites too: “There is a view Airb­nb com­prises solely of tra­di­tion­al res­id­en­tial homes offered by aver­age Bar­ba­di­ans. In real­ity it is used by all types of tour­ist accom­mod­a­tion includ­ing vil­las, hotels, guest houses and con­domin­i­ums, sev­er­al of which are mem­bers of the Bar­ba­dos Hotel and Tour­ism Asso­ci­ation (BHTA).”

BTPA is sur­vey­ing the industry, includ­ing share hosts, about pro­posed new reg­u­la­tions that are pre­sum­ably inten­ded to level the play­ing field. “The BTPA’s role is to cre­ate a happy medi­um between main­tain­ing a high-qual­ity product offer­ing and ensur­ing Bar­ba­dos has an inclus­ive tour­ism industry where aver­age Bar­ba­di­ans can bene­fit from this dynam­ic sec­tor,” Hall said.

Sources: Cur­a­cao Chron­icle; Loop.

Prevention is better than cure in Mexico

Down­town Mex­ico City. By Ale­jandro Islas Pho­to­graph AC (CC BY 2.0 ) via Wiki­me­dia.

To the north­w­est of the Carib­bean, in Mex­ico City, Airb­nb has pre-empted prob­lems by agree­ing with the loc­al gov­ern­ment to col­lect and remit a 3% occu­pancy tax, which is the same as what hotels pay.

The occu­pancy tax is a first for Airb­nb. It is an exper­i­ment to ward off leg­al prob­lems it has faced in cit­ies such as New York and Bar­celona by giv­ing the author­it­ies and hoteliers what they want: reg­u­la­tion and a level play­ing field. It is study­ing wheth­er it can rep­lic­ate it in oth­er cities

“We want to strike the right bal­ance between the gov­ern­ments and our users,” Nath­an Ble­char­czyk, Airbnb’s co-founder and chief strategy officer said. “If there are con­cerns, we can work together.”

Mex­ico City Hotel Asso­ci­ation dir­ect­or Alberto Albar­ran agreed that the meas­ure was “pos­it­ive” but that it doesn’t go far enough. “We still have to pay licenses, per­mits, social secur­ity, income taxes, have fire alarms, seis­mic alarms and payroll, just to name a few,” he said. “There are still many challenges.”

In response, Mr Ble­char­czyk said: “There will always be a power­ful lob­by­ing group want­ing more.”

Source: The Nation­al.

Info wars in the United States

To Mex­ico’s north, in the US, Airb­nb has recently settled long-stand­ing dis­putes in two of the company’s most luc­rat­ive mar­kets. In San Fran­cisco, Airb­nb has agreed to require that hosts register their rent­al prop­er­ties with the city. In New York, the com­pany has agreed to per­mit its hosts to rent only one unit at a time, although that has­n’t stopped a loc­al hotel asso­ci­ation releas­ing a con­tro­ver­sial You­Tube video sug­gest­ing that Airb­nb prop­er­ties posed a pub­lic secur­ity threat …

And issues between Airb­nb, author­it­ies, and hoteliers con­tin­ue to sim­mer in Los Angeles and prob­ably a lot of oth­er cities.

In Santa Mon­ica, Scott Shat­ford was the first per­son to be con­victed for snap­ping up long-term leases in desir­able loc­a­tions and then sub-let­ting them via shar­ing plat­forms. He now scrapes data from Airb­nb to provide invest­ment inform­a­tion to those look­ing to pur­chase or lease prop­er­ties spe­cific­ally for the short-term hous­ing market.

Anoth­er out­fit scrapes data from Airb­nb but uses it against the shar­ing plat­form. Insideairbnb.com rose to prom­in­ence after Mur­ray Cox and Tom Slee dis­covered that Airb­nb had allegedly wiped more than a thou­sand New York list­ings just days before claim­ing their site was used for home shar­ing by eth­nic­ally diverse lower middle class and work­ing class pro­fes­sion­als in the Big Apple. Cox and Slee have con­tin­ued to use data to argue that Airb­nb has con­trib­uted sig­ni­fic­antly to the hous­ing crisis, exacer­bated gentri­fic­a­tion, and used the feel-good stor­ies of genu­ine home sharers as a front.

Source: The Guard­i­an.

Debate rages in Canada

Fur­ther north again, in Canada, a study by Montreal’s McGill Uni­ver­sity con­cludes that only a small num­ber of com­mer­cial prop­erty man­agers gen­er­ate the major­ity of Airb­n­b’s over­all rev­en­ue. And this is absorb­ing avail­able hous­ing stock and driv­ing up rents in Canada’s three biggest cities.

Montreal sky­line from Mt Roy­al. By Taxiarchos228 (CC BY 3.0) via Wiki­me­dia.

Only 10% of hosts account for the major­ity of the rev­en­ue and nights booked on Airb­nb in Toronto, Van­couver and Montreal, accord­ing to Dav­id Wachs­muth, a McGill pro­fess­or of urb­an plan­ning and lead author of Short-term Cit­ies: Airb­n­b’s Impact on Cana­dian Hous­ing Mar­kets. He told CBC Montreal: “What we’re see­ing with short-term rent­als is that the right of prop­erty own­ers to make money is tramp­ling on the right of people to afford houses,” Wachs­muth said.

Airb­nb has dis­puted Wachs­muth’s find­ings with an attack on his pro­fes­sion­al­ism: “The author of this study has a his­tory of manip­u­lat­ing scraped data to mis­rep­res­ent Airb­nb hosts, the vast major­ity of whom are middle-class Cana­dian fam­il­ies shar­ing their homes to earn a bit of addi­tion­al income to help pay the bills.”

​In Decem­ber 2015, the Que­bec pro­vin­cial gov­ern­ment passed Bill 67 to reg­u­late short-term rent­als. People who reg­u­larly rent prop­er­ties need to get a cer­ti­fic­ate from the Quebec’s tour­ism min­istry, pay a lodging tax, and advise land­lords that they will be rent­ing to tourists.

Wachs­muth does­n’t think that’s enough. He pro­poses three regulations:

1. Hosts should only be allowed to rent their primary residences.
2. No prop­er­ties should be avail­able for short-term rent­als all year round. (Ams­ter­dam caps rent­als at 60 days of the year; Lon­don 90 days.)
3. Shar­ing plat­forms should be required to enforce the regulations.

Source: CBC.

A backlash is building in Japan

Shin­juku sky­scrapers and Mount Fuji. By Morio (CC-BY-SA‑3.0) via Wiki­me­dia.

Across the Pacific, in Japan, a back­lash is build­ing. There are grow­ing num­bers of com­plaints from neigh­bour­hood groups regard­ing secur­ity and noise and lit­ter­ing from tour­ists stay­ing in short-term rentals.

In the­ory, rooms can only be used for short-term lets if the own­er has a hos­pit­al­ity license. To let rooms com­mer­cially, the prop­erty has to be in a com­mer­cial dis­trict, have a super­visor present 24/7, and, if it is in an apart­ment block, the land­lord must have the con­sent of oth­er house­holds. In prac­tice, how­ever, many room sharers con­tin­ue to let private rooms regardless.

New legis­la­tion passed in June is meant to leg­al­ise home shar­ing and encour­age homeown­ers to register their activ­ity. The law is set to come into force in 2018, but reg­u­lat­ing the sec­tor is a work in pro­gress and the finer details have been left to loc­al governments.

Source: Nikkei Asi­an Review.

Stop weeping & moaning

To tour­ism and hos­pit­al­ity stake­hold­ers who would rather see the back of accom­mod­a­tion shar­ing plat­forms, the world’s top tour­ism boss might say “stop weep­ing and moaning”.

In April, UNWTO sec­ret­ary-gen­er­al Taleb Rifai, reportedly said: “[The industry] should recog­nise that [shar­ing accom­mod­a­tion] is not going to go away, so instead of weep­ing and moan­ing and yawn­ing and say­ing ‘no, no, no, we don’t want it’, it must find ways of com­ing to terms with this phe­nomen­on and make it work for their advantage.

“The so-called shar­ing eco­nomy has shaken our industry to its roots,” Rifai added. “I believe that our sec­tor is too con­ven­tion­al, too con­ser­vat­ive. It is not able to either embrace or know how to deal with the dis­rupt­ive forces of tech­no­logy, the pos­it­ive dis­rupt­ive forces of tech­no­logy […] Any­one who looks at this activ­ity as tak­ing away from oth­ers, they are mis­taken. It is bring­ing in new waves of trav­el­lers that have not been seen before. You need to come to terms with it, you can’t just fight it.”

Source: The Tele­graph.

Fea­tured image: At the Airb­nb launch of “Live There”, April 2016. By Kev­in Kre­jci (CC BY 2.0) via Flickr.