Airbnb data analytics foundation AirDNA – which analyses data from the online hospitality service’s 4 000 000 rentals globally – shares performance insights from its listings worldwide and estimates that the vacation rental industry will grow to amount to $170 billion by 2019. The rapid growth of Airbnb listings has also had adverse impacts on property markets, however, and in some instances, tourism sentiment.
Having grown from 85 total cumulative rentals in 2010 to 36 378 in 2018 in Cape Town, would-be renters are finding it increasingly difficult to find full-time rentals in the city and the surrounds as owners are opting for short-term letting.
The phenomenon is not unique to the Mother City. In an article published by the Wall Street Journal, a paper is cited as confirming that Airbnb use resulted in increased home prices and rental rates, stating “a 10% increase in Airbnb listings leads to a 0,39% increase in rents and a 0,64% increase in house prices,” looking at data in the USA between 2012-2016.
Above: Images shared by The South African from AirDNA data illustrating Airbnb hosts renting out single rooms (in blue) and entire apartments/houses (in red) in Cape Town.
READ MORE: 2018 travel trends by Airbnb
In light of factors such as the above, joint CEO of Knight Frank, Tony Galetti, says: “There is also a trend now in some apartment complexes to ban Airbnb completely,” in a blogpost on the “ugly” side of Airbnb by the commercial property and industrial property brokerage.
While Airbnb’s ability to support the tourism sector both locally and abroad goes without saying, this too has come with its own setbacks. Recent reports have stated that the new coalition government of Netherland’s capital, Amsterdam, may soon also ban the service. According to UK publication Express, the GroenLinks Green party announced plans to half the number of days permitted for short-term rentals such as Airbnbs for tourists in the coming year. This is one of the city’s tactics to crack down on “tourist nuisance and provide more affordable housing for people on middle incomes”.
In response to the new measures, an Airbnb spokesperson told the publication that “while Airbnb accounts for just over 4% of visitors to Amsterdam, it economically empowers locals, drives guests to outer neighbourhoods and supports environmentally-friendly travel habits.
In 2016, New York Governor Andrew Cuomo set the precedent by making letting out entire apartments for under 30 days illegal, a move Airbnb challenged with a $10 million campaign, reported The Verge. The city council of New Orleans has recently put forward a motion to ban short-term rentals due to the impact on its housing economy.
Come July, Palma, capital of the Spanish island of Majorca, also plans to ban short-term rentals to alleviate its housing shortage. Majorca’s secondary housing market experienced the fastest growth among Spain’s cities, according to the New York Times, and locals want the influx of unruly tourists contained. This has been to the dismay of existing Airbnb hosts, who believe the city’s Mayor has bowed to pressure from large hotel groups.