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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Holidaymakers enjoying the cafés of Barcelona last weekend experienced a welcome they didn’t expect: several thousand protesters marching past, a few wielding water pistols, others with placards reading “Tourists go home”. The anti-tourism backlash reflected several factors, including overcrowding and the number of cruise ships docking in the city port. But a key element of the protest — and of Barcelona’s response — related to short-term rentals via platforms such as Airbnb, and their impact on housing costs. The city mayor reiterated a pledge to phase out short-term tourist letting licences by late 2028 and return 10,000 apartments to the residential market.
Barcelona is far from alone in taking such steps; New York City imposed a de facto ban on short-term lets last year. But many travellers view the likes of Airbnb, Vrbo and Booking.com as positive disrupters of the hospitality market. The online platforms make affordable rooms and an appealing “local living” experience more accessible to visitors. They also provide a simple path for homeowners to earn extra income by letting a spare room or a part-time residence — and have opened a new line of business to local entrepreneurs who can buy and let out flats full-time.
Hotels have had to adapt. Affordability has improved; according to hotel data analytics firm CoStar, the extra supply of lodgings has made it harder for hotels to use “surge” pricing, or inflate their rates, in peak travel seasons. Realising that travellers seek “authentic” experiences, some hotels have sought to make their offerings better fit their location by offering local food and immersive activities.
Yet new marketplaces often create unintended consequences, which lawmakers are now starting to address. Increasing numbers of residential properties in popular destinations are being converted into short-term rentals. Families and long-term residents often complain about the noise of tourists partying, or constantly wheeling cases along hallways.
The squeeze on housing has been a particular issue in Barcelona. Leftwing mayor Jaume Collboni says residential rents have soared 68 per cent in the last 10 years. He has blamed the city’s more than 10,000 short-term rentals, and hoarding of properties by full-time hosts, for helping to make it untenable for workers to find affordable places to live.
Depending on the locality, some manner of regulation can be reasonable. Reducing the number of apartments available exclusively for short-term rentals can help to ease stretched housing markets. Taxing hosts at a rate commensurate with hotels is equitable. Ensuring renters abide by existing noise, commercial and zoning regulations is sensible, too.
But while short-term rentals make for an easy target in the complex quest to provide sufficient affordable housing, outlawing them is unwarranted and no substitute for addressing broader structural issues.
Outright bans can also be inefficient. If a homeowner is only a part-time resident of a city, it helps the housing market for them to rent out their property when they are absent. Many large cities, such as San Francisco, Tokyo and Vienna, have passed or proposed 90- to 180-day caps on the number of days a property can be listed for short-term rentals. Such caps are more logical — allowing residents to earn extra income, while barring full-time hosts from hoarding housing supply.
Local authorities need to determine what is right for their town or city. “Overtourism” is becoming a genuine problem in some locations. But tourists bring lucrative revenues and support jobs and commerce, too. They ought not to be barred or priced out by excessive curbs on short-term lets.
