Lisbon mayor Fernando Medina has pledged to ‘get rid of Airbnb’ once the coronavirus pandemic is over.
In a text written in English for the UK’s Independent, Mr. Medina admits that a third of the city center has been lost to holiday rentals, incurring incalculable social consequences.
The new Renda Segura (Secure Income) program launched in the Portuguese capital aims to enable key workers to return to the city center after being priced out due to a tourism boom.
The program works like this: Landlords afraid of their apartments lying empty can apply to rent them to the municipality, for a minimum term of five years. The city in turn takes on the burden of finding tenants, through an affordable housing program targeted at young people and lower-income families.
Rents are capped at levels between 450 euros per month for a one-bedroom to 1,000 euros for a generously sized house. For landlords, the income from these fixed rents might be lower than they could have earned from renting to tourists, but it is at least risk and hassle-free, and exempts them from both property and capital gains taxes.
The aim is to sign up 1,000 rentals this year. So far they have had 177 applications.
“We’ve paid a social price,” said Medina. “Essential workers and their families have increasingly been forced out as Airbnb-style holiday rentals have taken over a third of Lisbon’s city center properties, pushing up rental prices, hollowing out communities and threatening its unique character.”
In a statement, Airbnb said that it “helps local families stay in Lisbon and 60 percent of local hosts say the additional income they earn from hosting means they can pay the bills and support their families.”
Medina’s plan does not mean “we don’t want tourism or need visitors to return to Lisbon as quickly as possible”, he adds.“It’s simply time we do things differently and visitors will ultimately benefit”.
Why do tourists love Airbnb?
Mayor Fernando Medina’s decision to get rid of Airbnb as soon as the COVID pandemic is over does not please tourists. Indeed, this famous Portuguese city attracts a lot of visitors, yet organizing a tourist stay there is not often easy. An organization like Airbnb offers services that make this task easier. To understand this, we simply need to list the different offers of this agency.
For starters, before booking a trip, the customer can compare prices of airbnb in lisbon with cozycozy.com. Thus, he can choose the proposal that suits him. Rentals with this provider are always available in a local neighborhood, where the visitor can share his days with the locals, taste the local food and soak up the culture of the country.
The main advantage of this offer is its affordability. Indeed, the cost of hotel rooms in this city is very high, this organization allows people who wish to do so, to have a pleasant stay in Lisbon with an affordable budget. In addition to the attractive rates, this provider offers its customers a significant comfort. Also, it gives the possibility to organize trips for couples, families or friends, renting for example a whole apartment at very affordable prices.
It is understandable that visitors do not agree with the decision of the mayor of Lisbon.
The Portuguese capital is not the only European city hoping to curb Airbnb’s prospects.
Ian Brossat, deputy mayor of Paris in charge of housing, said in May that COVID-19 and subsequent fall in short-term rentals provided the city with “a unique opportunity to switch properties previously listed on Airbnb to conventional rentals and ensure that they again benefit Parisians.”
The French capital is looking at buying properties bought as investments and leased exclusively as short-term rentals from landlords who have been hard-hit by the COVID-19 crisis.
Amsterdam banned short-term vacation rentals in three central neighborhoods from July 1. Since the start of the pandemic, the Dutch city has seen 21% more rental homes on the market compared with the same time last year, an increase attributed to the decline of Airbnb’s business.
For the full text of Medina’s article click here
Airbnb is working with hosts from across the Czech Republic to provide first responders, doctors and emergency responders in the fight against the COVID-19 pandemic, with secure accommodation while they carry out their vital work.
Through this global initiative, hosts have already offered up nearly 200,000 places to stay in over 160 countries and regions. Frontline staff can book eligible and available stays in their area.
Airbnb will waive all fees on the first 100,000 stays booked through this program.
“In tough times like these, it is our priority to stand with the Airbnb community to do what we can to help so that frontline medical staff can carry out their vital work in the fight against the COVID-19 pandemic as well and as safely as possible. Hosts on Airbnb are ensuring that frontline workers can find free, affordable and convenient places to stay. We would like to thank all frontline workers throughout the Czech Republic and the many hosts who are already offering them a place to stay,” said Kathrin Anselm, General Manager DACH, CEE & RUS at Airbnb.
In the UK, Airbnb is working closely with hosts to provide National Health Service (NHS) staff and other frontline workers combating the COVID-19 pandemic with accommodation close to newly built emergency hospitals.
In Italy, Airbnb is helping hosts to provide free accommodation for emergency responders who need to move to one of the crisis centres in northern Italy. This way, hosts are helping to protect frontline workers and their families by accommodating them on-site to reduce the risk of infection of others.
In France, hosts have already accommodated 1,000 medical professionals for free in the last two weeks. In partnership with the French government, hosts all over France have offered over 8,000 free places to stay throughout France since the launch of the program three weeks ago.
Frontline staff can request an accommodation under the program directly through the Airbnb Frontline stays platform where they can book eligible and available stays.
Frontline staff can select accommodation based on their needs, e.g. in terms of location. Once a responder has booked, Airbnb will review the professional information to confirm the booking.
To participate, hosts can offer entire homes free of charge or at a reasonable price.
The respective listings will be available exclusively for use by medical staff within the framework of the program.
You’re a host and want to offer your listing? Read more here
You’re a Frontline worker looking for accommodation? Read more here
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The coronavirus and subsequent lockdowns have left virtually no industry untouched. Among the many affected is the short-term-rental industry, much of which is powered by Airbnb and the similar platforms that followed its lead.
According to Euromonitor, the number of tourists who spent at least one night in Prague last year was over 9.1 million, more than in Amsterdam (8.8 million) or Barcelona (7 million).
As a result, real estate prices and rentals have risen steeply in recent years, in all parts of the city. In the wider center from Smíchov through Karlín to Libeň or from Vršovice through Holešovice to Dejvice, this increase was partly due to renting apartments via Airbnb and similar services, which reduced the supply of long-term flats despite growing demand.
Within less than a hundred meters, you could easily find fifty Airbnb flats. However, the coronavirus pandemic completely changed the situation.
According to bezrealitky.cz, in March the number of apartments for rent in the Czech Republic increased by 16 percent. In Prague by 41 percent.
“To imagine, there are currently about 30 apartments that were used by Airbnb on Bezrealitky every day. If we took the growth for the whole month, we are on the growth by half compared to the previous one,” said Hendrik Meyer, CEO at BezRealitky.
Airbnb is dead right now
Airbnb is in crisis and, according to Reuters, the company has suspended all its marketing activities to save $800 million this year, and the founders will not pay any wages for six months.
In his message, Brian Chesky, co-founder, and director of Airbnb praised the company’s property manager partners and acknowledged that Airbnb needed to do a better job communicating with them. Despite what the company did with earlier reservations, Airbnb will stand by and enforce host’s cancellation policies for any bookings made after March 14, he said.
“The last few weeks have been a bit of a wakeup call for us. We know we need to be closer to you,” Chesky said. “We’re going to build things in partnership with you. We really are partners — or at least I want us to be.”
The company set aside $250 million to reimburse property managers for 25% of the revenue they lost due to bookings cancelled as a result of the pandemic. It set aside another $10 million for so-called Superhosts — highly rated managers of popular properties — to help them pay their rent or mortgages.
“The expectations of Airbnb apartment owners are exaggerated”
Meanwhile, real estate prices are also falling in the rental market in Prague, which is, according to Meyer, a short-term effect related to coronavirus on the economy in general and not just Airbnb.
“The number of apartments to be withdrawn from Airbnb will increase. The main wave will not come until it is clear that the summer season will be without mass tourism,” added Meyer.
“In May and June, another 5-6 thousand apartments could be poured into the rental market.”
“Many Airbnb apartment owners have already decided to offer so-called mid-term rentals, for example, for a period of 2 to 3 months. They are often well below the market price of long-term leases, which logically scatters the dynamics of the market,” says the CEO of UlovDomov.cz.
According to Březina, however, most apartment owners are still waiting and hoping for the summer tourist season. If there is none in May and June, another 5 to 6 thousand apartments could be poured into the Prague rental market. However, those interested in rental housing should be very cautious in the coming period, especially if they come across suspiciously advantageous offers of apartments in the city center.
“We recommend them to conclude a contract for at least a year, ideally for two, and carefully study the terms and conditions – especially the articles related to the possibility of termination of the contract by the apartment owner. Although owners are temporarily forced to seek an alternative, it is more than likely that they will want to return to the original model and higher prices as soon as possible,” says Březina.
The fall in prices will not be sharp
Therefore, if the borders remain closed, rents will drop first in the central part of Prague and the decline will gradually arrive in other districts.
However, the decline, according to Meyer, will not be so sharp. Rents can reach the level of the beginning of last year, i.e. be six percent lower.
In the long run, however, residential housing prices are unlikely to fall. The willingness to buy will support central banks by lowering interest rates; buying real estate can still be interesting for investors seeking security against the economic downturn during the crisis.
“So, prices cannot be expected to fall – on the contrary, growth will continue, perhaps only at a more moderate pace. And the market is still not stopping for sales. In Prague, for example, we now see a 17% increase in sales over the previous month. The whole situation probably accelerated the already negotiated real estate sales,” adds Meyer.
At the expense of hotels, accommodation platforms in Prague are taking a growing share of the increasing business of tourists. The percentage of Airbnb platforms in tourist accommodation is increasing, and hotel owners are trying to counter this with new development projects.
Every year, three hundred thousand more tourists come to Prague. However, while the number of hotel beds has risen by 1.4 percent over the last two years, accommodation capacity via Airbnb platforms has grown by 34 percent. These results come from a study by the consulting firm Deloitte, according to which, last year Prague had available for short-term rental about fourteen thousand apartments.
“The possibility of profits through short-term housing platforms pushes people out of the city center. We expect this effect to extend farther,” said Deloitte’s property manager Miroslav Linhart.
According to Cushman & Wakefield, there are now in the capital a total of 16 hotel projects with 2900 rooms. However, only 42 percent of this capacity is being built. “Taking into account the strength and considerable size of the Prague hotel business, the planned construction is relatively modest and easily absorbed by the market. Especially when we realize that it may take many years for the hotels to be completed,” said Bořivoj Vokřínek, a hotel market specialist from Cushman & Wakefield.
According to him, an example of a complex path from the plan to the realization is the project of a luxury hotel of the Ritz Carlton chain in buildings near the Old Town Square. Builders are already working there, but the project has been under construction since 1998. However, the growth in accommodation platforms does not mean that Prague hotels are empty. “Their occupancy has been around 78 percent on average for the second year running. This percentage is a relatively high number. However, the average prices of accommodation are gradually increasing, and Prague is already close to the prices of Vienna,” said Václav Stárek, President of the Czech Association of Hotels and Restaurants.
Per room, the price for a four- or a five-star hotel in Prague in September is an average of ninety euros, and in Vienna 102 euros. Prague hoteliers year-on-year average prices increased by 2.2 percent, while the occupancy rate increased by 70 percent according to the hotel association statistics.
In addition to removing posters and signs, Prague public lighting maintainers have another task: removing the key boxes from the street lamps, which are placed there by the owners of apartments offered via Airbnb.
If the owner wants their box back, they must pay 1500 crowns. It is not surprising that no one has applied yet. Moreover, the value of the box itself is much lower.
“We will remove the illegally placed key boxes without damaging the box itself. Owners can contact our company where they will issue the boxes after paying the costs incurred by our company for removal and storage,” said Tomáš Novotný, Vice President of Technology of the City of Prague.
According to sales director Filip Brückner, however, boxes are not yet enough to require special warehouses or shelves for storage, and companies would incur additional costs. “To remove, it is necessary to leave the service vehicle, and it costs 1500 crowns. But we do not charge storage yet,” he said, saying that none of the owners have picked up their boxes yet.
The company also published a call for people who come across pillar boxes to report the case to the toll-free line at 800 40 40 60. “It’s the use of a strange thing, for the lamps are owned by the city. At the same time, it is unjust enrichment because the city leases masts for advertising accessories,” Brückner added. In some cases, the boxes can also cause complications when handling the lamps; for example, they can make the service hole unavailable, iDNES.cz pointed out earlier.
Box keys can bring more revenue
Boxes cost several hundred crowns and are primarily used by providers of shared housing, such as Airbnb. Thanks to the keys stored in the boxes, guests can stay at any time, and the hosts do not have to be physically present when handing over the keys. It is also an option for them to offer self-service accommodation
Boxes cost several hundred crowns and are primarily used by providers of shared housing, such as Airbnb. Thanks to the keys stored in the boxes, guests can stay at any time, and the hosts do not have to be physically present when handing over the keys.
It is also an option for them to offer a self-service accommodation process, allowing guests to access it. For example, guests can use a smart lock (fingerprint or mobile phone unlock), a code lock, a porter, or the locker in which they store the keys.
Self-service accommodation is also one of the conditions for a host to be classified as a business-friendly accommodation and to attract more potential clients.