Air BnB – Time to Throw Tourism’s Problem Child out with the Bathwater

Tuesday, April 09, 2024. 11:33am

The problem child of the parents of Disruptor Business and Tourism is surely Air BnB. It’s all very well creating a worldwide system that allows everyone to run their own short-term tourist accommodation but there comes a point when the tail begins to wag the dog and that moment arrived in Ireland (and elsewhere) a number of years ago.

The problems that the phenomenon of Air BnB creates have been well documented over the last decade or so. One of the first is that as the growth of host accommodation centres means that less and less property is available for long-term letting. If you own a home and can get twice as much money by renting out your flat to a series of strangers, then why would you endure the pain and hassle of taking on a long-term tenant who’ll have notions of tenants’ rights and all that kind of thing? Air BnB works as a model because it serves both property owner and tourist very well. Breaking that model will inevitably involve making the process uninteresting for one or both parties.

Seán O’Driscoll, CEO of the iNua hotel group, is amongst those in the industry who would welcome any legislation change that would reduce the dominance of Air BnB in Ireland. He recently made some comments about the phenomenon on a LinkedIn post recently, responding to an article in the Irish Independent that exposed a number of shocking truths about how the system is tying up potential long-term lets in many towns. It’s also competing directly with registered accommodation but without the attendant costs around planning permission and business rates.

“I made some comments about this on LinkedIn in response to the Irish Independent,” says Seán. “They had done an analysis of a lot of towns and it showed statistics such as in Glenties in Donegal, who had 29% of the housing stock in the town as holiday homes… it’s obviously creating a problem in those communities because we’ve a situation where people who work in those towns aren’t able to live in them. And that’s not good for sustainable tourism.”

Seán O’Driscoll is Chief Executive Officer of iNUA Hospitality PLC, with overall responsibility for the strategy, growth, and performance of The iNUA Collection hotels. – Picture; David Creedon / Anzenberger

A recent episode of RTÉ’s Prime Time also highlighted the problem. Using statistics made exclusively available to their investigation team, they showed how the Government made a commitment to reduce short-term letting to get an estimated 12,000 homes into the long-term letting pool. The only time that the long-terms lets increased to the detriment of short-term holidays lets was during the Pandemic. Otherwise, the number of short-term lets has increased spectacularly during the current administration’s watch.

Air BnB listings

In Dublin, there were 1,682 properties listed on Air BnB in 2016. That rocketed to over 5,000 in 2019 before falling back to 3,300 during Covid and then up again to 4,700 at present. Countrywide, almost all of the 29,000 or so short-term lets are on Air BnB, with 70% of the total number classed as entire properties (i.e. not just a room in a house).

There is such a thing as planning permission for short-term letting but this has not been enforced, with an estimated 99% of all short-term lets either exempt or just not bothering with it.

On the plus side, the Government has been trying to oblige those letting short term via Air BnB to register publicly with Fáilte Ireland. After this legislation was eventually put forward towards the end of 2022, it ran into difficulty with the EU heads, who felt that the proposed legislation was in contravention to competition law.

In an effort to appease the wise heads of Brussels, the legislation was adjusted so that it wouldn’t include “rural areas”. The only problem with that is so much of Ireland is rural. The definition in the legislation counts any town with 5,000 people or less as a “rural area”. However, in Ireland, a settlement of 3,000 to 5,000 people is usually regarded as a town and often a minor regional capital. Towns such as Kenmare or Bantry, for example, would now escape the Air BnB clampdown legislation, due to the fact that they’re “rural areas”. 

It’s difficult to understand the sloth-like progress in this issue, particularly when one considers the lightning speed of reaction of the Government to the Pandemic crisis. Furthermore, other cities and countries in the EU haven’t dragged their feet so much. In Barcelona, they’ve recognised how Air BnB has been taking the heart out of city centre communities and have been clamping down for almost a decade. They’ve reduced the number of short-term lets in the city by 7,000 units. In the southern French city of Nice, short-term lets became virtually impossible due to local legislation introduced a decade ago, obliging homeowners to enter into letting agreements of no shorter than a month. For those that have been increasingly flouting the law, a new law was introduced last October, banning key boxes (for Air BnB users) in public places.

The reality in many towns in Ireland today is that tourism is locking people out of their own communities. In towns such as Kilkee in Clare, the problem is one of the most acute, with necessary workers being simply unable to live in the town without paying expensive tourist rates and moving house every so often. This kind of problem has always been there in tourist areas by the coast but in recent Irish history, we’ve known nothing like this.

“It was never envisaged by planners that a lot of this accommodation would become tourist accommodation,” says Seán, “because it wasn’t built as tourist accommodation but an awful lot of it ended up going up on Air BnB.

“But even more than that, you have an unequal accommodation market. In towns like Dingle, you could have a guesthouse next door to an Air BnB accommodation house. That guesthouse is required to follow all fire safety legislation and have a fire certificate. It has to follow hygiene regulations and disability regulations. It has to pay local authority rates and it has to pay Fáilte Ireland registration fees. And, very often, it’s also contributing to the local area destination tourism marketing. Meanwhile, next door is someone not having to comply with any of that… it’s very unfair on guesthouse owners who are trying to follow all the laws of the land and who are also trying to pay their way in terms of contributions to the local authorities and marketing.”

The situation is quite clearly untenable but as long as we have governments that don’t act quickly and decisively when there’s a problem but instead, wait for years to come up with legislation, then water it down to suit someone in Brussels’ warped idea of fairness, we will be waiting some time, it seems, for any kind of progress.

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