Wednesday, September 20, 2017

One In Eight: Awash With Rentals

One holiday apartment for every eight residents. The statistic is quoted in an article that was published in El País last week. The information came from Airdna, which isn't some type of Airbnb watchdog but is in fact an Airbnb's data analytics business. The website sounds like Airbnb such is the virtue made of, inter alia, its "rentalizer", the first automated valuation tool for short-term rentals.

Among various statements on the website is this: "Short-term rental earnings are blowing away the returns seen in any other real estate investment category. Savvy investors are purchasing properties where lodging supply is low, travel demand is high and regulation is favourable. Learn how to identify the perfect Airbnb investment opportunity." Another states: "Our sophisticated technology picks up every intricate data point on every Airbnb listing in the world. Whether you want to analyse short-term rental rates in Mallorca or regulatory impacts in Manhattan, Airdna has the most comprehensive and longest spanning data set."

How strange it seems that an American website should select Mallorca to be one of two places highlighted under "unmatched global Airbnb coverage". Perhaps it was for alliteration purposes - Mallorca and Manhattan. Perhaps not.

El País was clearly taking Airdna at its word. What better data analytics can there be? They must even outdo those used by Terraferida in mapping Airbnb interests in Mallorca. The article's headline referred to the Spanish municipalities most awash with holiday rentals. The original Spanish was "inundado". The translation could also be flooded, inundated or swamped. It couldn't be saturated but it's not so far off. The municipality with one holiday apartment for every eight inhabitants is the most awash of all. Any guesses?

A few weeks ago I came up with an estimate of how many illegal holiday rentals places there might be in Pollensa. On the basis of what El País (Airdna) says, I wasn't far wrong. Around 11,000, though it was probably a bit on the high side. Pollensa has some 16,200 residents - 16,222 according to the 2016 figure. It therefore has more than 2,000 holiday apartments. That is an absolutely staggering number. So much so that I find it almost hard to believe. Based on the most recent figures I've seen, this would mean that around 18% of all dwellings in Pollensa is an illegal apartment, and that's before you add on the licensed villas and houses.

But that's how it's reported, and almost as staggering is the municipality in fourth spot - Alcudia with one for every twelve residents. That would translate to around 1,600.

Four years ago I took part in a public debate about holiday rentals. To my right were Alvaro Middelmann, a one-time president of the Mallorca Tourist Board (among many other things), the lawyer Javier Blas, and a lady from the tourism ministry whose name I now can't remember. She was in something of a minority in her defence of the then Partido Popular's legislative approach to holiday rentals. I asked her at one point what planet her boss, Jaime Martínez, was on. I was in favour of far greater liberalisation of the rentals' market. The tourism ministry and government were not.

If you want to know why I've changed my view, then look at those numbers. I don't believe they are anything to celebrate. Bear in mind that these are just Airbnb properties, though it is quite possible that they have also been on other websites. Or were on them. The figures quoted by El País were for July. There has been frantic deleting since then.

But more than the numbers it is those quotes from Airdna. They encapsulate everything that Airbnb has distorted and every way that Airbnb has allowed itself to be distorted in growing so phenomenally as a business. Savvy investors, short-term rentals earnings, and people still talk about the collaborative, sharing economy? Who are they trying to kid?

Manel Casals is the manager of the Barcelona Hotels Guild. You would expect him not to be a fulsome advocate of holiday rentals, but when he said in an interview recently that the collaborative economy is a ridiculous invention (the translation could also mean comic invention), then he wasn't far wrong.

I have sympathy, and I've said it before, for those apartment owners who had been renting out either legally (by the tenancy act) or not up until the time Airbnb suddenly exploded (and it hadn't at the time of that debate). It might have satisfied the views I held only four years ago if Airbnb had not come along and destroyed the chances of legalising so many apartments. Those chances would have been significantly greater than they now are because of how the government has acted - has been forced to act.

"Analyse short-term rental rates in Mallorca"; it says it all. The collaborative economy wasn't a comic invention. It was a decent one before it became ridiculous.

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