The traditional definition of tourism in economic terms is provided by UN Tourism as “the cluster of production units in different industries that provide consumption goods and services demanded by visitors.” The emergence of the sharing economy was recognised in 2017 when UNWTO presented its preliminary results of research into “‘private tourism services through digital platforms’, a phenomenon often referred to as the ‘sharing economy’, the ‘collaborative economy’ or ‘peer to peer’ (P2P) economy.”
There is still considerable confusion about what counts as the sharing economy. If a driver purchases a car to provide transport for tourists (or residents) and secures business through Uber, this may be perceived as the sharing economy. But, the vehicle has been purchased to provide a service in the same way that a taxi driver would purchase a vehicle. Similarly, the purchase of a property to let tourists and marketed through Airbnb is not what is generally understood as P2P sharing.
Daniel Pereira, back in August, published on the “Top 10 Airbnb Competitors & Alternatives.” His graphic reveals the issue. You may be surprised to see TUI included here, but TUI Villas specializes in private holiday homes and villas, which may be second homes or permanently let in the short-term rental market.
The spectacular growth of short-term rentals has been made possible by the Internet and the booking platforms that operate on it. Before the arrival of the internet, one might book a gîte or a B&B through a small ad in a newspaper or magazine. Gîtes de France still promotes B&Bs and campsites. The success of Airbnb has created a new business opportunity; companies like Lodgify, Hostaway, Hello Guest; providing “‘end-to-end’ Airbnb management services“ and Finest Retreats, which “specialise in holiday let management across Northumberland. More income, no hassle. We maximise your income and manage all aspects of holiday letting.”
Airdna provides short-term rental data, and there is a great deal of advice available on the internet about how to start a business marketing and managing short-term rentals. Companies like Lush&Homely, Host & Stay and many more provide total management and claim to maximise revenue for investment property owners.
Airbnb originated in San Francisco in 2007, with its roots firmly in the B&B, bed and breakfast tradition. Unable to pay the rent, two friends, Brian Chesky and Joe Gebbia, decided to rent out air mattresses in their San Francisco apartment to make rent. Joined by Nathan Blecharczyk as chief technology officer, launched Airbedandbreakfast.com in 2008. In 2009, the name was changed to Airbnb, and the offer was expanded to include spare rooms, apartments, and entire houses.
The photograph below was taken in Edinburgh, a city with a growing and increasingly acute overtourism issue, driven to a significant degree by the housing crisis generated by short-term lets and profit maximisation in a commodified housing sector. The proliferation of key boxes reveals the scale of the issue. Disintermediation is complete; the guest never meets the host. This form of accommodation creates work only for casual employed cleaners.
Residents in Rome, Florence and Milan have been reported sabotaging key boxes in protest against short-term lets. The Italian government has now banned the self-check-in system, citing “public order and safety risks”. Guests will now have to be checked in by the owner or their agent.
Inside Airbnb reports that 4,000 entire homes and apartments are listed in Edinburgh on Airbnb, compared with just 1,723 private rooms and that over half the places listed are part of multi-listings, ‘Altido’ has 102 ensuite homes or apartments listed in the city and ‘Alison’ 61. The benefits of renting out accommodation accrue to owners, who may or may not live in the area or even the same country.
While it is debatable whether Airbnb and similar platforms are predominantly Peer-to-Peer and part of the sharing economy in the way the B&Bs clearly were and are, Airbnb and similar platforms have been a major disruptor. Uber has six million active drivers in 70 countries and 10,500 cities. As usual, governments are playing catch-up as they extend regulations to cover this new form of disintermediated short-term letting and to tax the earnings of those profiting from it. Effectively, in many places around the world, a major part of the visitor economy has been unregulated. Taxis and hotels are licensed and regulated; short-term lets and rides on platforms like Airbnb and Uber are not.
Tour operators have rightly pointed out that this informal, unregulated sector has unfair commercial advantages, that they create only low-paid and casual employment and reduce housing availability for locals, including workers in the tourism industry. Canarian Weekly, in July, reported on a shanty town “an alternative settlement of makeshift homes, caravans, and cabins (…) housing vulnerable people and workers in the tourism industry.”
The availability of housing and rising rents have been major drivers of demonstrations against overtourism. There can be no doubt that the growth of largely unregulated short-term rentals has contributed to overtourism. Hotels and hostels generally require planning permission, and they are regulated and taxed; short-term rentals are not.
Steve Heapy, the CEO of Jet2 has warned that protests against overtourism “will get worse” without action, arguing that: “These protests we’re seeing are against incompetent and impotent governments that have failed to regulate unlicensed tourism – that’s people staying in Airbnb properties.” The authorities “say it’s too hard to regulate, but it isn’t. All they need to do is book a property on Airbnb, find out who owns it, go and knock on the door and say, ‘Hi, I’m from the local government. I’d like to see your tourism licence, your health and safety certificate and your tax return.’”
TUI CEO Sebastian Ebel pointed out back in July that “Tourism is sustainable and successful when local people see it as an added value for their city or region. They decide how much tourism is welcome and what kind of tourism it should be.” He argued that cooperation between the population, politicians and the tourism industry in holiday destinations was needed in order to strengthen the positive effects of tourism further and develop holistic concepts for living spaces and everyday life for local people. Only tourism that is accepted and supported by the local people can be sustainable tourism. Tui Group’s head of sustainability, Ian Corbett, has described overtourism protests as “shocking and upsetting” and went on to say “What matters most is having openness and the spirit of working together to find the right solutions.”
It is the responsibility of the local government, using the national legal frameworks available to them, to manage tourism and ensure that tourism benefits local people.
