Fining Airbnb

Apropos the Balearic government having fined Airbnb 300,000 euros, someone said that the fine will never be collected. Someone else agreed. This had been tried in the Canaries, and the courts quashed it.

These two someones are in fact the same person. Technology is wonderful when one has access to certain applications; in this instance, a website back-end administration system. People talk to themselves under different names. It happens not infrequently. Funny old world.

This single-person chat is really a subject in its own right. Let's not detain ourselves by being concerned about it for now. Let's instead consider the Canaries fine, because there has never been one. The real story is that the Canaries High Court has on three occasions issued rulings challenging the Canaries government's holiday rentals legislation; a rather different matter therefore.

The Canaries government has not yielded to the court's rulings. The Supreme Court is to become involved. Legal certainty might therefore be said to be limited in the Canaries; the government had in fact banned holiday rentals in many resort areas. 

The Balearic government, the current government, has not banned anything as such. Rental accommodation, i.e. villas or houses that were legally registered, has been unaffected and will remain unaffected. The government has applied an interpretation of the tenancy act, which had been open to flagrant abuse because of the way in which clearly tourist accommodation (apartments in particular) was being disguised. The Madrid government might have challenged this; it did not.

The banning dates back to 1999. The Partido Popular passed the first Balearic tourism law. From that point on it was definitively illegal to rent out apartments for tourism purposes; the PP's second tourism law (2012) put more flesh on this. People still did rent out because of the tenancy act, but the principle of a ban came into existence almost twenty years ago, and it was introduced not by a left-wing government but by a right-wing administration.

You do hear some real old claptrap, such as the current government being in the pockets of the hoteliers. The PP were so far inside the pockets they were buried deep along with any loose change. That's why the PP failed to regulate in favour of openly marketed holiday apartment rentals in 2012. The PP are now playing political opportunism for all its worth, attacking a government which was left to try and sort out the mess that the PP might have lessened.

And it is a mess. The government's legislation is a mess but only because the situation became messy. And who does one blame for this? The former PP government yes, but the blame lies far more squarely with Airbnb and its ilk and what it has spawned in the years since the PP so lamentably failed to grasp the  nettle that might have prevented a great deal of difficulty for all the apartment owners who had been renting out but were not given the chance to "regularise" their situation when they should have been.

So, the government slaps a fine of 300 grand. Small beer to Airbnb. It might find that it does have to pay, which it didn't when a Catalonia government fine a tenth this amount was ruled out by the Catalonia High Court. The justification for the court's ruling was that Airbnb was merely a digital intermediary that wasn't itself offering a tourist service. The European Court's ruling regarding Uber has changed all that. Barcelona town hall's 600 grand fine of Airbnb may well stick, as will those imposed by other administrations in the EU.

Airbnb operates as though rules don't or shouldn't apply. It has accepted that there were properties in Mallorca without the necessary licence registrations on its website. Why should it worry? It can afford the fine but will do all in its power to avoid paying it. As for poor owners who find themselves being fined in Barcelona, what does Airbnb do? It hooks up with an online legal advisor to help these owners, which is very kind of the website but also a tacit admission that there are legal cases to answer.

Have you heard the one about the single "owner" in Ibiza who markets 500 apartments for holiday rental? You haven't. It was reported on in an Ibiza paper the other day. This is a business, one indicative of the speculation that the virtuous Airbnb has facilitated. The true small owner, the one who was renting out in a somewhat dodgy fashion for years before Airbnb came along, is the one I feel sorry for; not those who have emerged in recent years and are wholly distorting the market for accommodation. That true small owner has been caught out by the Balearic legislation, but don't blame the government. Control had to be applied. People have to live somewhere.

Whether the fines are ever paid, who knows.

Airbnb: Poacher Turned Gamekeeper

Booking.com is part of the American company The Priceline Group. It is also one of the four largest online travel companies in the world: the others are Expedia, the Chinese Ctrip and Airbnb. Booking offers all sorts of accommodation. As far as its rentals side is concerned, it has been commended by certain regional authorities in Spain for being rather more willing to comply with regulations than other online concerns: Valencia has been one, the Balearics another.

Expedia used to be TripAdvisor's parent company. The website that is ostensibly about user reviews was spun off from Expedia, which has since acquired HomeAway, perhaps the biggest rival to Airbnb. TripAdvisor branched out to become its online travel company as well. It, as with HomeAway and Airbnb, has fallen foul of regulators in Spain, such as the Balearics.

Airbnb, it doesn't really need pointing out, has grown to be the business it is by being an "intermediary" for non-hotel accommodation. This is now, however, all about to change. Airbnb, rather than just being an online travel company (which it would in any event dispute), is to become an online travel agency - an OTA, the term used for the likes of Booking.com. Again, of course, Airbnb would dispute that it is or will be an OTA.

What is changing is that a tie-up with another website - a non-exclusive one with SiteMinder - means that hotels which appear on SiteMinder can also go on Airbnb. Yes, Airbnb is to become a hotel distributor, just like Booking and Expedia. The website so maligned by the hotel industry will now, if hotels wish, become something of a friend. As Airbnb appears to have no limits in its ambitions in becoming an "infinite" company (CEO Brian Chesky's term), you can be pretty sure that the first foray into hotel distribution will only grow much bigger.

Hotels have already been able to use Airbnb, but only an individual basis. They now stand to be incorporated en masse, and they also stand to benefit from the vastly more favourable commissions. Booking and Expedia will be looking on all this with some degree of horror. The difference between Airbnb and Booking/Expedia commissions is anything from three or five per cent to fifteen or thirty per cent.

The Airbnb commission range may change, but for now it will look very tempting. And as such, it puts hoteliers into more of a fix. Can they carry on being as aggressive towards Airbnb if they want to take advantage of the more advantageous commissions?

The massive global industry that is accommodation is undergoing yet more revolution. There is Facebook and there is also Amazon. And as these global concerns move into new product areas, so they move further away from what they were originally, none more so than Airbnb. The disingenuous propaganda about the collaborative, sharing economy is further undermined by having a hotel product. There is nothing sharing about this; it is business pure and simple, and hugely profitable it is, too.

Moreover, the Airbnb (and HomeAway) argument about being merely intermediaries which operate in accordance with European e-commerce regulations is also further undermined. The European ruling regarding Uber, which basically determined that it is a transport services operator subject to member state regulations, has yet to be applied more broadly. But the European Commission will have greater evidence to rule that Airbnb is a travel services company (an OTA), which brings with it very different regulations to that of e-commerce. And that would mean that there would be far less defence against the type of fine that the Balearics and other administrations care to dish out.

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.

The Market That Broke The Rentals' Legislation

"We will create a legal framework for tourist rentals in 'plurifamiliar' properties so that, under established conditions, they can be rented." This comes from PSOE's manifesto for the 2015 elections in the Balearics. By plurifamiliar, if you're not familiar, this means apartment buildings.

"We will develop a new tourism law ... that will regulate ... tourist rentals." "We will make tourism a source of shared prosperity to ensure that the majority of the population actively participates in the benefits of tourism." This is from the Més manifesto for the same elections.

When Més referred to regulation of rentals, they meant regulation that was more permissive than allowed under the 2012 tourism law. When they spoke of shared prosperity, they were talking in general terms about a more equitable distribution of wealth but also in more specific terms. One of the party's prominent spokespeople on tourism, Toni Reus, the ex-mayor of Santa Margalida, had referred to the right of individual families to supplement their incomes from the renting of a property.

When Biel Barceló of Més became tourism minister after the elections, it was generally acknowledged that he had inherited a hot potato - holiday rentals. New regulation of rentals, he once said, would be undertaken before a new tourist tax was introduced. This didn't happen. Events conspired to mean that the rentals' regulation came along a year later.  

The politics of holiday rentals, broadly shared by PSOE and Més prior to the 2015 elections, were such that the left opposed the Partido Popular's dogmatic stance on apartments. Up until midway through the PP's 2011-2015 administration neither PSOE nor the PSM (the main constituent of Més, of which Barceló is a member) had taken a great deal of interest in holiday rentals. They had been together in government on two occasions - 1999 to 2003 and 2007 to 2011. Holiday rentals had escaped legislative attention.

Although there was an "issue" with the legality of apartment rentals, it was an issue that governments could deal with by making reference to the 1999 law, making the odd threat and basically never doing anything. The issue wasn't worth the renewed legislative hassle. It wasn't that big an issue. The status quo was maintained. Rentals' illegality and legality were allowed to coexist.

In 2012 the PP made a difference. They legislated. Or rather, they reinforced their own 1999 tourism law. It was only after the 2012 act went through that rentals really started to become a "hot potato". Suddenly everyone was talking about rentals and about the tenancy act. The left took up the cause. The PP's law was unfair. It was biased towards the hoteliers and biased against the likes of Toni Reus' families. It was also a potential risk to the islands' tourism.

Over the summer of 2013 there was a great deal of discussion. By August of that summer the tourism minister, Carlos Delgado, was being bombarded with requests and demands to adopt a more permissive approach. PSOE was to the fore in making this bombardment. The PSM weren't far behind, and they were backed by the Chamber of Commerce and various associations, one of which was the restaurants association within the Balearic Confederation of Business Associations. Its president was Pilar Carbonell. She is now the director general of tourism, the choice of Biel Barceló.

The general mantra was that there was a danger in not liberalising the rentals' market. Tourists may well choose to go somewhere else rather than Mallorca and the Balearics. Delgado called a meeting. It had looked as though he might have had a change of mind. He hadn't.

So, when PSOE and Més (with Podemos in the wings) formed the government in spring 2015, rentals' legislation was firmly on the agenda. Both PSOE and Més had it in their manifestos. Neither had given any idea what the legislation might be, but a clue possibly lay with the Catalonia regulations: relatively permissive and capable of bringing in an extra pot of tourist tax revenue.

The government is now being accused, among other things, of kowtowing to the hotels. Més? In the pocket of the hoteliers? Don't be ridiculous. And Pilar Carbonell, a political independent, had constantly been at loggerheads with the Mallorca Hoteliers Federation when she was the restaurants' president, especially because of all-inclusives. As tourism director general, she, like Barceló and like PSOE have had to adapt to an altered situation.

Airbnb was an emerging factor during the time of the PP administration. It then exploded in a way that few could have foreseen. Had it not exploded, it is quite possible that the stock of "illegal" apartments could have been dealt with in a far less complex way than is the case. Who knows, maybe all that had been "illegal" at the time of the election could have been made legal. The fact is that it did explode and has brought with it the various social problems that it has.

Those manifesto pledges haven't been totally broken. It was the Airbnb market that broke what otherwise would have been different legislation.

The Appetite For Division: Airbnb

A Bloomberg report earlier this year revealed that Airbnb expects to earn as much as 3.5 billion US dollars by 2020. This is profit before interest, tax and depreciation and is more, explained Bloomberg, than 85% of companies in the Fortune 500. It would represent a 3,400% increase in profit from 2016.

Brian Chesky, the CEO of Airbnb, is said to have a net worth of 3.3 billion US dollars. For the head of a business that was only founded nine years ago, his worth and that of the company is truly staggering. If one is looking for some sort of vague comparison, the Mallorcan hotel chain Iberostar was founded in the 1980s. Its president, Miquel Fluxá, is reckoned to be worth the same as Chesky. In 1956, Gabriel Escarrer Julia started what was to become Meliá Hotels International. He is said to be worth half of this - 1.7 billion.

One isn't of course comparing like with like, but the figures nonetheless tell a story. Another figure is the net profit for Spain's largest hotel group (Meliá) in 2016. It was one hundred million euros. Airbnb's was roughly the same - in dollars - and it was earned from 1.7 billion in revenues. Meliá's revenues for 2016 grew by something over 3.5% to 1.8 billion euros. In the case of Airbnb, its revenues could be as high as 8.5 billion dollars in 2020.

Chesky is a classic of the American entrepreneurial dream. He and his co-founders stumbled across an idea - airbeds and breakfast - and realised the idea via the internet. The company spends money, quite clearly it does, and as of end-2015 it had almost 2,400 employees worldwide. But it doesn't have the physical real-estate assets (apart from some offices) that demand maintenance and investment. Its fixed costs are very low.

This is a business built on an idea, on good technology and marketing. It is a fantastic idea, but for all the worthy and grand words about the collaborative, sharing economy and the income this creates for private individuals, there's no escaping one simple fact. Its founders are making a hell of a lot of money out of not having properties.

The name Airbnb now defines an industry. There are numerous other accommodation sites, but Airbnb has become synonymous with a sector in a similar way that, for example, Xerox and Hoover came to define photocopying and vacuum cleaning. Reference to Airbnb is therefore short hand for an entire sector, for a concept - the so-called collaborative, sharing economy of accommodation.

One imagines that neither Xerox nor Hoover would ever have particularly divided opinion. Airbnb (and its industry) has. Grey area between black or white, where some Mallorcan politicians are concerned, gives a nod in the direction of a societally conscious collaborative economy by proposing that under the rentals' legislation some owners (in Palma, it would seem) might be able to rent out to visitors for a maximum of sixty days. This assumes that these flats are their habitual places of residence. Otherwise, you're either for or against, with most of the political class to the left against. With the PP on the right it's impossible to know where they stand.

But it obviously isn't only the politicians. They aren't the ones putting up Stop Airbnb stickers, even if some have been accused of fomenting anti-Airbnb attitudes. And these antagonistic attitudes might not have emerged had Airbnb remained what it was. But it didn't. The collaborative economy concept isn't now a total sham but it has gone a long way to being so. The voracious appetite for cashing in on the rentals' market dynamic, fostered to no small degree by Airbnb, and for Airbnb itself to grow in an extraordinary fashion has for the most part undermined and even destroyed what was once a fantastic idea.

There is no debating the fact that there is demand for short-term apartment rentals. There is also no debating the fact not everyone wants to stay in a hotel. The market has been like this for years. But a huge distortion has been created.

Chesky can demonstrate his consciousness and anti-Trumpism by offering to put up Muslim travellers, but one can't be blind to another fact: he has a business that is making vast profits and which needs to keep growing ballistically (with a possible stock market flotation that would make him astronomically wealthy). It is a business which disingenuously disassociates itself from any flouting of regulations. It is a mere intermediary. Yes, and look at the money rolling in and the societal divisions being created.

One doesn't exonerate the hoteliers from their at times less than wonderful labour terms and conditions, but their employment is on a wholly different level to anything that the Airbnb economy could ever hope to reach. Yes, there are very wealthy hoteliers, but so also are there very wealthy website CEOs. Surprised that some people might protest? I'm not.

The Apartment Rentals Wolves Are Howling

So, have you removed your advert for an apartment rental in Mallorca from Airbnb? Or from any one of the 83 websites in total over which the tourism ministry is hanging its sword of rental Damocles? Like the websites themselves, you are probably ok until the week after next. The ministry has given the websites a short period of grace to get their accommodation house (apartments) in order. After that, let the fines begin.

It's finally happening then. For years (at least since 1999), successive governments have issued dire warnings each summer about illegal apartment rentals. We all got so used to these stern statements of intent that we came to assume - rightly enough - that they were the crying of wolves. Not now. The wolfpack is on the prowl, and it doesn't even need to leave the office. Website A. Click. Apartment without tourism ministry registration licence number? Click. What shall we fine? Twenty grand? No, go on, let's make it 40 grand. Why not? Click and kerching! The tills of fines revenue ring in the summer air. What lovely loot for the government.

Yes, if you fail to take that advert down, you can anticipate being the provider of a nice little earner for the Balearic administration. It'll be of very little use you trying to wriggle out of it. True, there is a defence. But how can you possibly make it stick, especially as the burden of proof is all yours? It's rented out under the tenancy act, you maintain. Really? Where's the contract? This is point number one. How many of these short-term not-so-called holiday rentals have ever been formalised with a contract?

Second question. Has the visitor paid a deposit, understood to be the equivalent of a month's rent? Well, has this allegedly non-tourist done so? Erm, not as such. Third question. Can you prove that this tenant is not a tourist or traveller? You what!? This is the killer question. It will be almost impossible to prove. Indeed I struggle to see how it can be possible at all. The tenancy act defence is thus rendered totally useless. Redundant. Meaningless. Here, have a fine.

The days, therefore, of the occasional inspector from the tourism ministry or tax agency turning up and frightening tourists who were totally unaware that they were in illegal flats are more or less passed. There will probably still be some knocking on doors, but life has become so much simpler for the inspectorates. Isn't internet technology wonderful. It most certainly is. All those nice websites allowing owners to advertise their flats. All those nice websites opening their doors to the inspectors. It's like shooting fish in a barrel.

Where do my sympathies lie? On both sides to varying degrees. The government had to act, especially once it became clear that it and whole communities were being eaten by Airbnb. As previously noted, the legislation wasn't going to be like it is. It's all that wonderful internet technology that is to blame. The government suddenly became aware that it existed, as it also became aware of a certain amount of social unrest and Podemos prodding it with a housing emergency pointed stick.

Owners, not all of them, have been getting away with it for years, especially the more corporate variety. Tourists, who are not and never have been to blame, were unknowing participants in an activity not entirely legal. No wonder some might have been shocked when the occasional inspector pitched up in the past. It's not as if anyone was ever going to advise them as to the legality or otherwise. They are now advised. The news of the legislation, the fines is all over the place.

For all that the government needed to intervene, there is nevertheless a sense that it has taken an almighty great sledgehammer to the nut. One of the government's problems is clear. How can it distinguish between a tenant who is a genuine family member and one who is not? I would feel very sorry for any owner who lets his or her family use a flat and gets caught up in all this. Hopefully, some common sense will prevail.

Then there is the owner with one or two apartments who has been renting out to tourists for years either in accordance with the tenancy act or not. There may have been some stretching of the law, but this type of owner now also faces being penalised.

The appetite of Airbnb, however, has meant an impression of everyone getting in on the act, skirting the law and - in certain instances - gobbling up whole portfolios of apartments. At least, though, some apartments will be made legal after the twelve-month moratorium on issuing licences. The question will be where, while certain provisions in the law will in any event automatically exclude them.

But for now the wolf is not crying. It is howling.

Airbnb Myths: Correct Or Not?

The study, "Myth and Reality of Holiday Rentals in the Balearic Islands", should be an important contribution to the holiday rentals' debate. The work of two researchers at the university, Professor José Luis Groizard and Associate Professor William Nilsson, it is valuable because it deals with facts. It is also a product of the university's applied economics department, which has been responsible for excellent tourism research in the past.

Groizard and Nilsson know how to hook their audience. The full report, of which I have a copy, starts by saying: "the negative consequences of holiday rentals (and of Airbnb in particular) have been exaggerated." Straight to the point, therefore.

They examine eight myths and generally speaking dismantle them all. Holiday rentals generate an unsustainable increase in tourist stays; they create an underground economy and tax evasion; they lead to residents leaving urban centres (the so-called gentrification); they increase the price of housing; they reduce the availability of rental accommodation in the long term; they destroy the landscape by enabling speculation on rural land; they provide unfair competition to hotels; they create wealth outside of the Balearics.

To get to the nitty-gritty of the facts, the researchers establish that in August last year there were over 15,000 properties in Mallorca on the Airbnb website. Debugging this data (for duplications for example), the number was 12,136 offering some 63,000 places. These numbers are in fact very similar to those provided by the environmentalists Terraferida, based on Airbnb data for January 2016.

When Terraferida made its announcement, there was sensationalism attached. The tone of the university's research is different. But it should be noted that Terraferida then updated its research. In March this year, the group revealed that the number of places in Mallorca had climbed to 110,000 and the number of properties to getting on for 15,000: in the region, therefore, of an 80% increase in places in the course of a year.

For a piece of academic work, which might typically be devoid of headline-grabbing statements, Groizard and Nilsson are prone to doing just this. In addition to that opening statement about the exaggerated consequences, they state under Myth One: "It isn't Airbnb, it is the Arab Spring and Islamic terrorism!" (the exclamation mark is theirs). They say that since 2011 there has been an increase in the number of tourist stays in the Balearics and Spain and point, rightly enough, to a 15% increase in tourism to Spain which has been a consequence of the problems in other destinations.

But what they don't show is the growth of Airbnb since the time it first became a feature in Mallorca. I recall doing an article about Airbnb, which must have been about five or six years ago, that referred to a very modest number of properties. It was around fifty, if I remember rightly; whatever the number, it was negligible. So while geopolitics is unquestionably a reason why there are more tourists, Airbnb is also a factor. It isn't one or the other.

Airbnb isn't of course the only means of publicising properties. It may be the best known, but there are numerous other means for owners to advertise, always accepting that they may well be promoting the same property on different sites. As the two professors provide some evidence that Terraferida's figures for 2016 were rigorous, it is legitimate to assume that Terraferida's latest figures are also reasonably accurate: an 80% increase in places cannot be put down solely to those geopolitics.

The study is important, and the professors do make very valid points, but perhaps the main issue they overlook is the propensity for the growth of the rentals' market. And its very sudden growth and all the consequences this has.

Aptur: Here, There, Everywhere

Mallorca is awash with associations for one thing or another, but there are few which command as much attention as Aptur. Defenders of holiday rentals, there is barely a day when the association isn't in the news.

This past week has seen Aptur accuse the environmentalists Terraferida of "criminalising" holiday rentals, gather the support of various other associations, hold a meeting with the hoteliers and announce its satisfaction at a court ruling on some islands in the Atlantic. Aptur is as ubiquitous as the Mallorca Hoteliers Federation and as prolific as the number of illegal rentals.

The attack on Terraferida resulted from the environmentalists repeating for Ibiza what they had done with Mallorca. They produced a map of Airbnb properties. Aptur said the figures which Terraferida came up with were not valid, as they didn't correspond to Airbnb. The environmentalists were engaging in demagoguery and using data which did not show the reality and were being used in seeking to criminalise rentals.

Whatever Aptur thought, Terraferida stuck to their guns. In Ibiza and Formentera, Airbnb has over 4,700 rentals with almost 27,000 places. The turnover on these last year was more than 92 million euros. Regardless of the accuracy or otherwise of its data, the presentation of these maps is an indication of how tense the arguments are and how divided opinion is.

One of Aptur's problems is that it doesn't currently derive a huge amount of support where it really matters. Despite the hoteliers criticising the planned rentals' legislation, it is evident that the government wants to curb rentals as much as possible. If it didn't, there wouldn't be the limit on the number of places which the legislation envisages making available, there wouldn't be the tight stipulations to be made on standards and there wouldn't be zoning (more of that below).

In addition to the government, Aptur also lacks the support of the unions. They may have their issues with the hoteliers, but they certainly don't buy the argument that rentals generate masses of jobs or secure ones. In an effort to show support, Aptur announced that various other associations are backing it: ones that would be expected to do so, such as the car-rentals' association.

Where Aptur can also count on some support is with the public, but the survey by the university found that there was only just over 50% support in Mallorca, while in Ibiza - with its great problems with accommodation - only 36% were in favour. Society is split, but it is an issue that is of vital importance to much of local society. There was, meanwhile, some evidence that society is taking note of the threat of fines up to 40,000 euros. It was reported that there is a "stampede" of owners removing property adverts from Airbnb and other websites.

Aptur countered this by saying that it is perfectly legal to rent to tourists. Which is true under the provisions of the tenancy act, but the very fact that Aptur mentioned tourists undermined its argument. Tenancy act rentals cannot be advertised as being for tourist purposes, yet this is exactly what they are and they are let out to tourists courtesy of what many now appreciate is a loophole that needs addressing.

The meeting between Aptur and the hoteliers was unusual in that there was an attempt to seek out some common ground. They agreed to try and define a tourism model based on quality and to create a working group for dialogue. As a first step, Inma Benito of the hoteliers has asked Aptur to make a proposal regarding the regulation of rentals in apartment blocks.

While this sounded all very reasonable, it was difficult to figure out the timing. Whatever either party suggests, the government is on the point of legislating. Quite what difference this working party will make is anyone's guess. Moreover, things weren't as conciliatory as this suggested. Benito repeated the threat of hoteliers converting hotels into apartments as a way of countering the threat from rentals. Implicit to this threat is that there would be job losses, hence why the unions are so concerned about rentals. There are some 150,000 jobs that rely on the hotel sector. Rentals of whatever type wouldn't come close to creating that level of employment.

Then came the ruling of the High Court in the Canaries, which annulled the concept of zoning for rentals in those islands on the grounds that it represented an infringement on freedom of competition and services. Even though the zoning scheme in the Balearics differs to that in the Canaries, the court's judgement does affect the principle. The Balearic government will surely have to take note, as its zoning will doubtless end up in court as well and an appeal against it will have the precedent of a decision in a different court.

With this ruling, Aptur may just have found a strong ally - the courts. And it can add to the courts the National Competition Commission, which is liberal on most matters, including Airbnb and rentals.

In Praise Of Terraferida

Not everyone likes or will like Terraferida. I don't know that I like them, but that's down to the choice of word. Admire is more appropriate. When they have something to say, they do so with impact. People sit up and take notice. Attention was paid when Terraferida exposed the sewage spill in Albufera, just as it was only some three weeks later when Terraferida highlighted the "occupation" of the Cabrera beach.

The information the group has released about unlicensed rental property in Mallorca that is offered via Airbnb isn't necessarily shocking or revelatory. It is more a confirmation. Some fourteen months ago, the data Terraferida has analysed showed that there were over 11,000 properties which were capable - at a stretch - of providing places for almost 80,000 people. Not all of these properties may still be available. Some may have even acquired a licence in the meantime. But you can be sure that more will have been added.

Setting aside the more bizarre accommodation on offer - caves, a tree house, an igloo, for instance - the bulk of it was apartments or houses. In the case of detached houses, there is nothing stopping an owner, as it stands under existing law, from applying for a tourist rental. Apartments are of course a different matter. They are only legal if there is pretence - the absurd shield that is raised by the tenancy act. This is, as has been suggested by legal minds at the university, a fraud in law. And how many tenancy act contracts are ever actually raised and signed?

Not everyone of course pretends. But many do, and Airbnb, courtesy of its colossal disingenuousness, provides the perfect platform. It doesn't trade in "tourist" accommodation. It is merely a go-between. And its insouciance is laughable. Why should it worry? It doesn't. Technicalities in law mean little, and so users exploit loopholes for all their worth. Some do so and are fully aware of the law - many, if not all Mallorcans, one would suggest. Others, foreigners being among them, are just ignorant of the law or stupid.

A thing with Airbnb, it being a product not only of the "collaborative" economy but also of social media information sharing, is that it is very easy to identify what's going on, if someone cares to look. The tourism ministry may, for example, be interested in what a guest of a certain "property" had to say about being collected from the airport by the owner. The transport ministry may also be interested, to say nothing of the tax agency. Is there a transport licence? Almost certainly not. Does this constitute a service? Yes. Does this service contravene the tenancy act loophole? Yes. Has any of this been declared to the tax agency? Who can say. And who can say whether this tourist service - property and transfer - is the result of blatant thumbing of the nose in the direction of the law, of ignorance of the law or of simple stupidity. The law, though, does not accept ignorance or stupidity as a defence.

Terraferida, somewhat like politicians, makes the point that it is less worried about the small owner: someone with just the single property. It is more concerned, as is the government, with the multiple owner. It cites the example of someone with 632 properties. This again is no real revelation. The government knows that there are such cases. It will now be interesting to learn how the government reacts to the Terraferida information. The group will send it all to the tourism ministry: property locations, property type, names.

The ministry, meanwhile, has its own map. It will make it public. It will show legally registered holiday rentals. While it seems to be at pains to say that this isn't some means of providing a "dobbers' charter", it - and the tax agency - are more than happy for members of the public to provide evidence of fraud. The ministry needs the public. It only has fifteen inspectors, and these inspectors are involved in matters other than holiday rentals.

There are any number of people who will defend the right of rental, even if it flouts the law. Tourists using rented accommodation spend money, unlike all those in all-inclusives. This much is surely true, despite what the Exceltur alliance for touristic excellence (members of which include leading Mallorcan hoteliers) says. Its reports showing lower spend than hotel guests are counter-intuitive. There has to be scope for rentals - legally registered ones, including apartments - but not on the scale that is being witnessed and not with the abuses that are being committed.

Airbnb and other such websites are businesses. Despite their good words and PR, they have facilitated property market distortion and fraud. This comes at a social cost, thus - at best - neutering economic gains. Terraferida should be thanked. The government has some very important legislation to pass. The most important of this administration.

The Frenzy Of Rentals' Colonialism

Another day, another survey. The Gadeso Foundation, which does a first-rate job in regularly surveying opinion on all sorts of topic, has been asking about holiday rentals. The fact that there is a survey highlights the importance of the subject to Mallorca and the Balearics. It has been remarked that it is one which attracts excessive attention, not least from the media, but the attention is necessary; this is a subject of fundamental importance.

Tourism, ever since the start of the sixties' boom, has raised a question about the way that people live in Mallorca. It is a question now seemingly being asked like never before, and there is a supplementary and just as important question - where do people live?

There are, it seems to me, some shockingly self-interested, patronising and ill-considered views regarding holiday rentals. They are held by those who can see no harm from unfettered development and availability. Holiday rentals are a part of the future, they give the hoteliers a run for their money, they generate greater revenues for certain business sectors. Agreed, albeit that they are the past as well as the future; holiday rentals in one form or another have always existed in the tourism environment.

But what is being experienced is a new form of touristic colonialism. If the development of resorts was principally a hotelier (and tour operator and bank) colonialism, both home-bred and foreign, then the current frenzy for rentals is a different wave, with the colonialists still a mixture of local and foreign. The owner of one or two properties is not really the issue; it is the speculative business and property acquirer which is. Nevertheless, and regardless of who the owner is, the frenzy is such that a wholesale distortion of the property market is being facilitated, leading to that supplementary question.

Colonialism implies some form of self-appointed interest, giving rise to a patronising view, similar to that which existed back in the sixties, that Mallorca should just be grateful for all these properties being available to tourists. That's one view. There is another which has it that workers can commute. So what if they have to, for example, live in Inca and travel to Alcudia each day? So what? Why the hell should they have to? The fact that people have to commute fair distances in places other than Mallorca is no argument. We're talking here not there. Moreover, we are also talking workers who aren't paid handsomely and who need to fork out more of their meagre salaries in order to travel on top of rents that are creeping up away from the resorts, a further consequence of the frenzy.

There was a time, and not so long ago, when I was in favour of pretty liberal regulations and when I sided with the view that the hoteliers shouldn't have things all their own way. This favouring still exists because it is only fair that an owner should at least have the option of how he or she chooses to rent out and also because there can be little question as to a benefit for the complementary sector, much though the likes of Exceltur (members of which include leading Mallorcan hoteliers) come up with reports suggesting that it is hotel guests who spend more on restaurants, etc.

What has changed my opinion is the frenzy, with Airbnb and others whipping it up and hiding behind the disingenuous argument that they are simply intermediaries. What? We're trading in holiday rentals? Not us, guv. What started out as a great idea now sucks.

The Gadeso survey reveals that just 29% of those surveyed are in favour of holiday rentals. There is a difference between Palma and the resorts. The greater opposition is in the city, which echoes a Gadeso finding about so-called saturation: it is felt more acutely in Palma than in the resorts. When it comes to type of property, irrespective of Palma or elsewhere, only 23% support apartment rentals.

The greatest drawback, according to the survey (59%), is access to housing for residents and workers. Half of the respondents consider that rentals are creating speculation and "gentrification", a word which has crept into the tourism lexicon in recent years. On the other hand, 47% believe that holiday rentals provide an important role in many families' finances. Which is true, but then ordinary families tend not to have whole portfolios of properties.

But it is ordinary families who might end up the victims of the frenzy. So much depends on how the government's regulations are finally worked up, on how zoning is determined, on how rigorously the tourism ministry and tax authorities then enforce regulations. And tax, now there's a thing. Gadeso found that 73% believed that obligation to pay tax should be the principal requirement for holiday rentals. Only 73%?

Culture, Anger And Tourist Tax: Top Stories From 2016

Google very kindly make available statistics of the number of individual page views that each blog post receives. These are direct views in that they are to the specific URL of the post rather than having been read by regular followers of the blog. They are an indication of popularity, although I wouldn't say they were the best; my personal opinion of the diversity of subjects that appear on the blog would give a different result.

This caveat aside, the story that proved to be the most popular was that of 17 September, Promoting Culture: Where's The Strategy? This was about an agreement between the tourism and culture ministries - a "protocol", as they liked to call it - to promote cultural tourism. This required an investment of 600,000 euros to internationalise the islands' culture via a "tourism strategy". I was scathing of the whole thing, not least because an aspect of this strategy is supposedly to push filming on the islands. The relevant ministers, Biel Barceló and Ruth Mateu, admitted that there aren't the necessary tax incentives to do this, as there are in other parts of Spain. So they were going ahead with a "strategy" without having the wherewithal to implement it. Moreover, the "protocol" only lasts until the end of 2017. Could anyone make any sense of it, I asked. PR nonsense was my conclusion, and we haven't heard anything about it since September.

Number two was from 21 July - A Camel To Design A Camel: Tourist Tax. The introduction read: "How many government departments, local authorities, business associations, unions and others does it take to change the cash collected from the tourist tax into meaningful projects?" One camel was therefore the Commission for the Promotion of Sustainable Tourism, the body which decides how revenue is to be spent. The other was the tax itself with its ill-defined multi-purposes. As things were to turn out, the government used the drought as the justification (not unreasonably) to place emphasis on water projects. We are still waiting, though, to hear what these (and other) projects actually are. When there's a commission with such camel-like ingredients, should this come as any surprise?

In third place was the article about Balearic hotel interests in Cuba - Keep Taking Us To Havana, 1 December - while just behind in fourth spot was the post of 2 May, When Anger Takes Over: Mallorca And Cycling. This was prompted by the general chaos caused by the Mallorca 312 cycle event, which isn't a race as such but a trial. As I noted, it was a trial that "tested the over 4,000 cyclists and tested the patience of many people on the island". The event brought to a head the simmering (and not so simmering) conflict created by cycling. The value and benefit of cycling to Mallorca seems irreconcilable with attitudes of residents. Whether these attitudes are shared by a majority, one doesn't know. Perhaps they should undertake a survey rather than rely on social-media hysteria.

Chaos of a different sort came in at number five - More On Vueling And The Chaotic Spanish Air Industry, 16 July. At six was a subject that crept ever higher up the agenda in 2016. The Pariah Status Of Airbnb from 11 November noted that Airbnb didn't exhibit at London's World Travel Market, despite it being "arguably the most important business in the travel market right at the moment". This was the context for a discussion of the need for the regional government "to take tough and effective action against Airbnb and other such sites". Just how tough will be revealed when the holiday rentals' legislation is approved. Whether it will be effective is a totally different matter.

There was further anger on 23 April. Getting Angry In Puerto Pollensa (number seven) said that "emotions have been allowed to run high; rather too high". They were to do with the pedestrianisation fiasco and the Gelats Valls ice-cream kiosk. There was of course to be even more anger because of the separate fiasco of the sun loungers.

At eight was a tribute to a web-based business which doesn't attract the concerns surrounding Airbnb. Hotelbeds: The Best Of Mallorca from 14 July looked at this successful business, sold by Tui for a fortune, which is headquartered on Palma's Paseo Marítimo. There was a coincidence with this article. Although not the same type of business, Hotelbeds does have some similarity with Low Cost Holidays, which went belly up a few days later.

In ninth spot was The Mess Of Regulating Holiday Rentals, 21 May. "The regional government is getting itself into a right old pickle over holiday rentals' regulation" was the introduction to an article on the difficulties regarding legislation. The pickle has become increasingly pickled, what with the idea to zone Mallorca and the intention to allocate places for holiday rentals that don't coincide with areas of high residential need. The government's problems are such that it ignored the fact, as stated in the May article, that the sustainable tourism tax law mandated it to have regulation in place within six months of that law having been approved: it should have been at the end of September therefore.

And in tenth place was The Environmental Crisis Coming Our Way of 17 May. This quoted a spokesperson from the environmentalists GOB who said that this will be "a crazy year, the infrastructure will not cope". Was it all environmentalist hot air? The prognosis was for: "airport stretched beyond its limit; Palma crowded out by ships and passengers; roads chockful of hire cars; ever more thousands of apartments being rented out; the hotels full; limits needing to be placed on the numbers on unspoiled beaches; supermarket supplies questionable; water supplies threatened; outdated sewage-treatment plants incapable of taking the pressure. Too many planes, too many ships, too many cars, too many people." 2017 will be no different.

There was in fact an eleventh post. It had the second highest number of page views but it wasn't a story, just a very short and simple post. It was the one to say that, after a few days of downtime when the Blogger system changed and I couldn't post, I was back. Heartening, I guess.

Might Mallorca Follow Barcelona's Airbnb Lead?

While we await with great interest what the Balearic government will be proposing with its holiday rentals' legislation, tourism minister Biel Barceló must be keeping a close eye on what is going on in Barcelona. That city, which some time ago opened what amounts to all-out war against accommodation websites, has caused a stir that captured headlines a few days ago - fines of 600,000 euros on both Airbnb and HomeAway. But there was more lurking behind those headlines. Airbnb are accused of having 3,812 advertisements for unlicensed accommodation; HomeAway of having 1,744. Mayor Ada Colau is blunt in her opinion: "It is unacceptable to have thousands of tourist apartments without licences and in an illegal form, without paying taxes and with causing harm to resident communities."

Both these websites, as far as Barcelona is concerned, have failed to collaborate with the town hall (a neat take on the so-called collaborative economy they profess to represent), but it isn't only the town hall which is taking aim at them. Activist groups are openly accusing Airbnb of pretending that profiles of hosts match those of people who rent out in order to make ends meet and pay the mortgage. However, the great majority of adverts are for large owners, the activists claim, and they reckon that Airbnb is also giving instructions on how hosts can avoid inspections.

Activists' accusations about Airbnb in Barcelona aren't new. These groups can now, though, feel bolstered by the latest fines that the town hall has dished out and the size of the fines. The Colau administration and the activists are basically singing from the same hymn sheet.

Airbnb will be appealing against the fine (as will be HomeAway). It appealed when it previously received a 30,000 euros fine, but given that it is now - as it were - a serial offender, Barcelona has slapped the maximum fine that Catalonia's tourism law permits. The Airbnb response, which almost acknowledges that there are no grounds for appeal, has sought a defence by saying that Barcelona is the only city to be fining it. While it then goes on to speak of the economic value derived from the "collaborative" accommodation economy in a city such as Barcelona, it doesn't - as has been observed - mention the absence of benefit, i.e. tax that isn't being paid.

Belinda Johnson, Airbnb's chief business affairs and legal officer, was reported the other day as saying that the company looks to work hand in hand with local authorities - by collaborating with them, in other words - but in Barcelona this isn't the case. The attitude of the town hall may not be to Airbnb's liking, it may not be like other cities, but the town hall has every right to adopt the measures it is. Colau is putting all sorts of tourist noses out of joint, but on this there is clearly a great deal of support for her action. And more websites are finding out that Barcelona is brooking no argument: TripAdvisor is one of nine to be levied with the basic 30,000 euros fine that Airbnb had appealed.

All this will not have gone unnoticed by the Balearic tourism ministry or, one fancies, by Palma town hall.

The Pariah Status Of Airbnb

Among all the various exhibitors at London's World Travel Market this week, there was no sign of what is arguably the most important business in the travel market right at the moment. Airbnb was not there. Why would it be there? This is a business of the internet. That is its whole point of being. Why be physical in a promotional sense?

Being a web-based operation is not, though, a reason. All tourism businesses are web-based in one way or another. Some, like Airbnb, are exclusively so, such as the Palma-based Hotelbeds, which did exhibit in London and which took the opportunity to announce that it is planning on tripling sales of its transfer and activity bank division. There again, Hotelbeds is a different business to Airbnb. It works with hotels and others, and while it does offer tourist apartments, it has always made a virtue of these being properly regulated and legal. "We can't do things any other way," has said its managing director, Carlos Muñoz.

For Hotelbeds, therefore, travel fairs are perfect opportunities to forge deals with other businesses, which is what it is constantly doing in order to grow. Airbnb does make deals, as it broadens the scope of its operation, but the core business doesn't rely on other companies - or not directly. It is dependent on private individuals. But then there also also, because it can't be denied, businesses which have multiple units of accommodation to market, whether legally or illegally.

What was a name praised and synonymous with the shared (collaborative) economy and with a new style of accommodation has now acquired - where some are concerned - pariah status. Exhibiting might just seem like a red rag to a bull. And one of the bulls might have been Palma's normally all-smiles mayor, José Hila. Prior to travelling to London, Hila was in Barcelona for a meeting of mayors from various Spanish cities. The purpose of that meeting was to discuss Airbnb.

Cities are unlikely to all adopt the same policies, but the fact that they were gathering to share experiences was taken as a sign that they are getting their act together in seeking to put pressure on Airbnb; this pressure is mounting in cities outside Spain as well. The city authority in Paris announced earlier this week that it wants to avoid a situation like that in Barcelona, where rentals are pretty much out of control despite tough action by that city's authority, and will do so by obliging Airbnb (and others) to obtain the registration number of any property that is marketed.

Systems of registration exist in various cities and destinations. There is a system in the Balearics. Regulated properties for rent have a number. The problem is of course that regardless of insistence on registration proof, there are still illegal properties. The only attempted remedy has been, as in Barcelona, to slap large fines on operators like Airbnb. These in turn run up against legal challenges, while Spain's National Competition Commission is lurking in the background and taking a highly permissive stance on services like Airbnb.

Another city that has been facing problems, as reported by the BBC this week, is Amsterdam. Other towns and cities in the Netherlands are also affected, so the government has introduced regulations by which properties can be rented out for no more than two months and for a maximum of four people. Tourist tax is then paid at the same rate as hotels. Amsterdam city spokesperson, Sebastiaan Meijer, says that the downside of the sharing economy can now be seen: properties being bought and rented out all year as an "illegal hotel". He also wonders whether people want to end up with streets having more tourists than residents. This is something being asked in many cities, not least in Palma.

The regional government has to take tough and effective action against Airbnb and other such sites. It is increasingly evident just how damaging the so-called collaborative accommodation economy is. Were it restricted, it might not be, but restrictions which exist are wholly inadequate. This has led, for instance, to the speculative purchase of properties with a single aim in mind: Sebastiaan Meijer's illegal hotels. The social distortion is obvious, with local people unable to find or afford accommodation. 

The Majorca Hoteliers Federation took time at the World Travel Market to present a report to Biel Barceló about the harmful effects. The government has responded by saying that its legislation will impose "iron restrictions" on apartments for tourist rent: they will be authorised but under tough conditions. There will be more inspections and higher fines. But we've heard all this before. What needs to be heard is effective legislation. We await it with great anticipation.

Hotelier And Airbnb Wars

The Balearic High Court has not dismissed the Majorca Hoteliers Federation's appeal for judicial review of the tourist tax legislation. A reason for having believed it would was that the same court had dismissed a similar appeal against the old ecotax. There was precedence, therefore. It would be interesting to know what the court has discovered this time to rule the appeal admissible. We may in due course find out.

How much of a spanner this puts in the works will not be immediately apparent. There may be none. The hoteliers, as the appellant, will be asked by the court to formally instruct an appeal once all the documentation related to the processing of the legislation has been delivered. One imagines that the federation will do this. Meanwhile, legal services, one guesses, will be chewing over what there might be in the text of the law (and its processing) to have persuaded the court to rule admissibility. Podemos, typically strident in voicing contempt of the hoteliers' appeal, have suggested they would assist the government in any "emergency" decree to shore up any weaknesses.

This is where one enters the complexities of the legislative system. Unrelated to tourism, a similar system arose with the previous government's trilingual teaching scheme. The courts ruled that procedure for its implementation had not been complied with correctly. The then government of the Partido Popular, arguing this was an administrative technicality, rushed in a decree to ensure that the scheme could proceed. It was this as much as anything which led to the lengthy teachers' strike: the government was perceived to have been acting in a high-handed manner in going against the courts.

Were something similar to arise now, there is no one to go on strike, but - and for the moment it is speculation - a federation riposte may be to call for "precautionary measures". Inma Benito, the president, has implied that the federation would not seek these. Not at the moment anyway. If the judge were to rule in favour of any such demand, the tax could be suspended, pending the full judicial review. The consequences would be chaotic.

An emergency decree might be sufficient to stop the appeal in its tracks, but even if it were to be, one wouldn't then rule out the federation making a further challenge. The whole affair seems destined for all-out war.

There's ever more on the related issue of saturation and holiday rentals. Quite by coincidence, the day after writing the article "Is Airbnb The Real Scourge" came a report of actions by anti-Airbnb protesters in Barcelona. They occupied a building where they say the apartments are all illegal tourist lets and pointed out that an owner of one has twelve in all in the city.

The political atmosphere in Barcelona regarding lets is more heated than in Mallorca, and so it is more likely to give rise to such protests (there was also one against "Harmony Of The Seas"). But Barcelona is acting as a lead for others - here and in other European cities - and one can begin to understand that the protesters may have a legitimate point. They argue that far from Airbnb (taken as shorthand to refer to other such sites as well) promoting the so-called collaborative economy, it is fostering a speculative economy that is based on tourist accommodation, a great deal of it illegal. They have some curious allies in this thinking, such as Exceltur, the alliance for touristic excellence, of which leading Mallorcan hoteliers are members.

The Barcelona protesters insist that Airbnb knows full well what is licensed and what isn't, but chooses to ignore the distinction to its own benefit and to the benefits of multiple property owners. The company says that 73% of those who advertise their properties only have the one (which does leave 27% who have more) and that the city's economy benefits to the tune of 740 million euros per annum because of its activities.

The reverse of this percentage, at least where Mallorca is concerned and according to Exceltur, is that 70% of owners have more than one property that is being promoted via Airbnb or other sites.

Who's right and who's wrong in all this? It's another war.

Is Airbnb The Real Scourge?

Increasingly, one wonders who or what is the principal target of those who express their ire over so-called saturation. For some, the most extreme wing, it is all tourism. For others, it is the hoteliers. Or holiday rentals. Or cruise ships.

The latter is an irrelevant category. Irrelevant anywhere in Mallorca that isn't Palma. Forget the cruise passengers. They make for useful propaganda, but they are not central to the debate.

What about hoteliers, then? Well, if one believes that a barely increased number of hotel places this century represents saturation, then hoteliers are at fault. They aren't of course. They haven't been adding to the "crisis" except by knocking out higher occupancy levels. Even these are marginal in adding to human pressure. When one can talk of high summer 90 or 91 per cent one year, then 94 or 95 another, there is clearly an increase, but it doesn't amount to overcrowding. Forget the hoteliers as well.

Which leaves us with holiday rentals. President Armengol suggested recently that it is too simplistic to charge them with being the cause. Simplistic perhaps. But probably accurate.

Some of those who have been railing recently about limits or reduction border on being cranks with no coherent programme for economic alternatives, save for one inspired by impractical anti-capitalist quasi-anarchy. Others are anything but cranks. They are extremely sensible. And amidst their sense, they identify a real issue - that of housing.

This has been a theme that the saturation argument has raised before this summer, but it is one that needs to be far more seriously and urgently addressed. Holiday rentals are depriving people of long-term accommodation, and where they can find it, it is becoming less affordable. One can only see this situation becoming more critical.

The left are in a quandary over holiday lets. An argument is that making a return on a property is a right that should not be denied, if this return is a means of providing an adequate income. A further ingredient is that there are elements of the left who take great issue with the hoteliers, especially the larger ones. They are all for hoteliers' noses being put out of joint; private accommodation is one way of achieving this.

In terms of the market in general, the left, instinctively prone to market intervention and interference, are finding this interference to be not as easy as it might once have been. Institutional and legal bases, be they in Mallorca, Spain or many other places, make interference complicated. But what interference might there be? Denying someone the right to rent out a property runs counter to leftist thinking. At the same time, however, it can deny a worker the right to long-term accommodation, while by its very existence it contributes to additional tourism mass. It's not simplistic.

There are of course degrees of rental. The single property owner is quite different to the one with multiple properties, but where is the line drawn? Can it be drawn? The distinction seems to be coming less and less relevant as the left take on the seemingly unstoppable momentum behind tourist accommodation rental. In Barcelona, the mayor Ada Colau, who shot to prominence as an activist who founded the movement against evictions, has proposed caps on prices for long-term rentals (citing Paris and Berlin as examples of where this is done). She has also been closing down apartments used for tourists and issuing warnings to Airbnb and others: they can expect fines of upwards of 600,000 euros if they don't stop promoting illegal accommodation.

But owners, and not just those with several properties, have fired back by insisting on their rights to rent out. In so doing, they are expressing the rights of a totally free market, something with which Colau and others towards the far left have great difficulty. These owners point to a form of liberation offered by Airbnb and others - the democratisation of property, the very essence of the so-called collaborative economy of which Airbnb is at the forefront, and the very essence also of what some on the left advocate. The contradictions are profound.

It would be stretching things to say that Airbnb and the philosophy of the collaborative, shared economy is the root cause of saturation, overcrowding and distortions in the housing market. There has, after all, always been this rental market, but it is valid to say that Airbnb has expanded the market vastly, so much so that it is now becoming disproportionate. Its advance is such that the number of Airbnb travellers to Spain between June and August rose by more than 70% - Mallorca and Barcelona were among the favoured destinations.

This collaborative economy advocates property democratisation. It favours the individual's rights. But at what cost to other sectors of society? Is Airbnb the real scourge? If you're a free marketer, you'd prefer not to think so. However ... .

Confused By Sustainability

The survey published earlier this week into attitudes towards the so-called tourist "saturation" of Mallorca this summer was very revealing. For one thing, it did rather confirm my suspicions that saturation is more applicable to Palma than elsewhere and that the saturation sensation has been latched on to by Palma-based politicians (and others in Palma) and been turned into an island-wide issue for primarily political purposes.

The overriding conclusion was that increased numbers, though they may cause inconveniences or concerns - more traffic jams, strain on water supplies - bring benefits that outweigh these disadvantages. And even among these downsides, are traffic jams not more of a Palma rather than elsewhere? Not exclusively, e.g. if it's a cloudy day and you have people heading for Soller, but primarily yes.

It was also revealing, as noted by the survey's director, that a sensation of saturation is felt more by those aged over 60. The younger the population, the less the sensation. Revealing but not surprising: there are economic and employment benefits to be reaped from there being more tourists.

There was little doubting that there are more tourists, but the survey certainly didn't link this with a feeling of being overwhelmed, which is one way to describe this saturation. For the regional government and for the tourism minister in particular, the fact that a limit on tourist numbers was ranked the third most important measure for making tourism "more sustainable" might come as something of a relief, given the type of rhetoric that has been coming from the government. But this was still only 10%. More policing was considered to be more important, as was the raising of the "quality" of the tourist, however this might be interpreted (and indeed how those surveyed might in fact have interpreted "more sustainable").

Digging into the issue of limits, the survey found that most people (66%) wanted a limit placed on numbers going to Palma. Well, if a survey base has a majority from Palma, which this one did, then you might expect such an answer. Palma, always Palma. Somewhat strangely, 64% wanted a limit placed on the number of all-inclusive places. Why was this strange? Well, because a limit would allow more tourists to be out and about spending money. That's fair enough, but if there are fewer tourists stuck inside all-inclusives, would the level of "saturation" on the roads and elsewhere not be greater?

It was even stranger when only 2% identified measures to deal with all-inclusives as being important for greater sustainability. Not only did this seem to contradict the other finding, it also ignored the fact that all-inclusives fail totally one of the key tests of sustainability - that of generating general economic welfare.

Also at the bottom of the list of importance for sustainability were holiday rentals. Yet aren't these supposedly the key contributing factor in all the increased tourist numbers? Biel Barceló wants there to be a limit on the total number of tourist places. For there to be a limit, there has to be regulation of holiday rentals (and one really is referring to apartments) - a mixture of permission and prohibition in terms of opening marketing as tourist accommodation.

Barceló, when in opposition, was one who criticised the Partido Popular for its restrictive stance over holiday rentals. In government he is finding out just how difficult an issue this is. He admitted earlier this week that it is "not clear" that websites such as Airbnb, which operate with pretty much total impunity, can be considered as promoting tourist rentals. And underpinning this is the loophole that is the national law on urban leasings (aka the tenancy act). It needs amending, and Barceló said so. Until it is, there will always be evasion and, in terms of Balearic government coffers, no tourist tax revenue. By definition, any accommodation rented out under the tenancy act is not touristic, despite everyone knowing that a great deal of it is just that.

Airbnb and other sites, unless they are somehow made to comply with whatever legislation Barceló comes up with, will continue to facilitate the promotion of apartments that are not registered as tourist accommodation. This is exactly what has happened in Catalonia, despite that region having enabled the legal marketing of tourist apartments. To this end, Barcelona is envisaging fines of up to 600,000 euros for websites like Airbnb. The hoteliers federation in Ibiza this week applauded this stance, while at the same time attacking the Balearic government for what it senses will be regulation "without the consent of neighbours; an activity that seriously prejudices co-existence".

Guess Who'll Be Marketing Holiday Rentals

If Biel Barceló and the Balearic government think that holiday rentals' legislation is already complicated, then they can now add a further ingredient to the mix. Aware that the legislation will have to take account of the growth of "sharing" accommodation websites such as Airbnb, along is coming a company which is a grand advocate of free markets and competition. It is? Ryanair.

The new theme for the Irish airline is that it plans on becoming the "Amazon" of travel in Europe. Michael O'Leary has said so, and he has been echoed in this by Kenny Jacobs, the head of marketing. On 1 October, the airline is to launch Ryanair Rooms, a service by which its travellers can book all manner of accommodation, including tourist apartments.

This "Amazon" approach, which already includes Ryanair Car Hire, is the latest service to come out of the Ryanair Labs (with its motto "always improving"). The plans for Ryanair Rooms are such, or so it would seem, that the company wants to challenge even Airbnb. And who is to say that it won't?

Until now, Ryanair has had an agreement with Booking.com. That will cease when Ryanair Rooms comes on-stream. Jacobs says that Ryanair's low fares revolutionised air travel and Ryanair Rooms will "transform" the booking of accommodation.

The intention of Ryanair to enter this market is just another move that is indeed transforming the booking of accommodation. TUI has already started to include private accommodation in the sale of packages, there is a growing number of travel agencies doing this, while Be Mate, which was launched back in 2014, was a statement of intent by the founder of Room Mate, Kike Sarasola, that he wished to create his own Airbnb-style model.

Be Mate in fact announced a few days ago that it had entered into an agreement with the Spanish Confederation of Travel Agencies (CEAV) for the marketing of tourist apartments. That led the former president of the Mallorca Hoteliers Federation, Aurelio Vázquez, who is also the Iberostar CEO for Spain, the Middle East and Africa, to say that Be Mate is doing "more damage" than Airbnb. Sarasola responded by stating that the prohibition of something only awakens desire. Be Mate is going to be at the head of the market not in the rear. "We strive for excellence in our treatment of customers, which is why an organisation such as CEAV is good for us. We share the same philosophy." 

At the same time as Be Mate was making its tie-up with the travel agencies known, Aurelio Vázquez was attending a forum on hotel investment. One of the themes that came up was holiday rentals, and there was a specific aspect to the rentals' market that hasn't necessarily been well discussed. It was one of safety and security and in particular the ease with which potential terrorists can book into accommodation via a site such as Airbnb. The former president of the hoteliers in Madrid, Antonio Gil, observed that hotels are required by the police to record data related to every guest. This is not the case with rentals' websites.

Well, maybe terrorism is something else that the Balearic government will need to factor in. With all the activity going on and with such big hitters in or entering the market, it becomes increasingly difficult for governments, such as the Balearic government, not to adopt legislation which reflects what is a massive and unstoppable trend. The previous government under the Partido Popular preferred to bury its head in the sand (assisted by the hoteliers) and so only contributed to making legislation more complex and more urgent.

The Muddled Ideology Of Holiday Rentals

Catalonia has a system whereby apartments for holiday rental can be openly marketed. It is a system that operates reasonably well, with accommodation subject to classification according to its standard (which has to meet set levels) and which is also transparent in terms of tax liabilities - revenue on the property, IVA (VAT) and tourist tax.

Despite this system, Catalonia still has a problem with accommodation that has not been registered and is therefore marketed illegally. One of the main means for this marketing is a P2P website, and two such websites - Airbnb and HomeAway - have been hit with fines totalling 120,000 euros by the Barcelona city administration because of what it calls the illegal advertising of tourist apartments.

For Airbnb, this is not the first time that it has fallen foul of a Catalonian administration: the government previously fined it 30,000 euros. But the Barcelona sanction is tougher as it also includes a sort of naming and shaming without actually naming. Plaques denoting legal accommodation have been appearing. If there is a property without one that is being rented out to tourists, then neighbours can readily identify it. 

HomeAway, for its part, has said that it will take legal action, insisting that the city administration's attitude is contrary to principles of free competition and also criticising the public announcement of sanctions without having been formally notified of them. Airbnb, in total disagreement with the fine, has attacked Barcelona for not supporting private individuals who wish, in the language of the P2P phenomenon, "to share" their homes, and adding that it should follow the example of European capitals and regulate in order that private individuals can share.

What Airbnb is getting at here is that the system should be like it now is in London, where new legislation, effective from May last year, allows anyone to rent out on a short-term basis. The previous restriction under the 1973 Greater London Council Act was considered "outdated" as well as a "bureaucratic headache".

Airbnb, by referring to support for private individuals, is also making a thinly veiled comment on the political ideology at Barcelona council. Ada Colau, who became mayor following the municipal election last spring, was a founder of Guanyem, a political party/movement not dissimilar to Podemos and one, therefore, with much the same advocacy of the rights of the citizens.

Barcelona, and especially its La Barceloneta area, has witnessed a massive increase in the availability of private apartments, and in the case of La Barceloneta, these have attracted a youth tourism of a (now former, perhaps) Magalluf style. It was an issue that demanded attention, but in going after Airbnb and HomeAway, while at the same also having an agenda that is not supportive of hotelier interests, Colau's administration appears to be behaving in a manner that is contrary to the rights of the citizens: a muddled ideology, therefore.

In Mallorca, these rights were once expressed by the former mayor of Santa Margalida, Toni Reus, who is from the Mallorcan socialist wing of Més, just as tourism minister Barceló is. Reus said that it was a human right for anyone to rent out property for whatever reason, and he was thinking of the town's resort, Can Picafort.

But while Barceló seems likely to introduce a more permissive system of regulation, he is also concerned about the sheer numbers of tourists coming into the islands in the summer and who are the result of the massive availability of private accommodation, much of it not registered. Airbnb has over 300 rentals in Mallorca (many of them without photos to avoid detection), but it is only one sharing website: there are many others, in addition to websites which are blatantly offering illegal holiday rentals.

One understands that the Balearic government isn't particularly interested in pursuing owners with single properties, but it is interested in the large-scale operators. In the case of Airbnb and others, it is hard to know which type of owner may be advertising and wishing to share.

The sanctions to be imposed in Barcelona, where there are also major concerns with overcrowding, could well cross the sea to Mallorca if administrations here were minded to adopt that city's example, but the same ideological muddle would follow in their wake. Podemos might be in less of a muddle if it follows the attitude of its counterparts in the Canaries who are opposed to anything that prevents tourist rental when it represents an important source of family income.

Ideologically, there shouldn't be restrictions (with the caveat of earnings being declared), but Barceló also has an eco-agenda to pursue as well as the proposal for rentals to be permitted only in certain parts of resorts or Palma. His new legislation is complicated enough, but it has been made more so because of the sharing economy and the rights of the citizen. Deny such sharing, and a basic right is denied.

Defending Loyalty To Mallorca

April Rinne is a name that probably won't mean anything to you. She is the chief strategy officer for something called Collaborative Lab, "the leading source of expertise for companies and governments that want to embrace the collaborative economy". Among other things, she is a "young global leader" at the World Economic Forum and has been an adviser to the Bill and Melinda Gates Foundation. She has, says her biog, "illustrated her thought leadership" in various publications. Thought leadership? What on earth is that?

Depending on your perspective, Rinne is either one of those infuriating Americans who come along on a regular basis and appear to invent entire alternative universes of business and marketing replete with jargonese and gurudom or a crystal-clear visionary of a brave new future world. Whatever your perspective, these are universes or worlds remote from the man or woman booking holidays to Mallorca. They appear divorced from everyday realities but sometimes they can be important, and what April Rinne deals in is important.

The notion of the collaborative or sharing economy is simple enough. You have something to share - let's say it's an apartment that you own - and someone wants to take up your offer. This is an economy that has always been with us, but technology has vastly expanded its potential, so much so that - at its most extreme -what you might have to share can be shared with anyone from anywhere. Middlemen cease to exist. All that is needed is a facilitator, a third party which enables the sharer to be in touch with his or her potential market. This is the world of P2P, peer to peer or people to people. This is the world of Airbnb property sharing, Uber car sharing and many others.

Rinne has made an observation which sums up the rise of P2P. It has taken Airbnb, the world's leading internet portal for tourist property rental, just six years to reach a level of users (customers) that Hilton needed over 90 years to attain. It is a stark observation of the battle between hotels and private accommodation that is going on across the globe and so not just in Mallorca, and it is a battle which, despite moves to legislate, appears to be one that the hotels cannot win. Rinne believes that the onslaught from the likes of Airbnb has only just begun.

Confronted with this competition - typically decried by the hoteliers as "unfair" - how can hotels fight back? A clue as to how they can lies with understanding the appeal of P2P and the apparent shifts in consumer thinking and behaviour, in particular those of the so-called Millennial generation. Tourism, according to accepted P2P wisdom, is about personalisation, about "experiences", about contact with local people in destinations. It is the depersonalised nature of hotels which turns the traveller on to a P2P "experience" and which also deters those Millennials who supposedly are also interested principally in experiences.

Of course, much of this sounds and often is marketing gobbledegook, but there is nevertheless a good deal of truth about depersonalisation and especially that which comes with the package holiday. This said, hotels have woken up to the need for greater personalisation and also to the need for "experiences". Many can't help telling potential clients about the experiences that await them or shoehorning them in to brand sloganising. And it is this branding which holds the key for hotels and, more importantly, tour operators.

Experiences and personalisation have become the hotelier and tour operator zeitgeist as has the need for branding and so brand loyalty, but in emphasising the brand, tour operators and indeed some hotel chains shift the focus away from the destination. What is being sold, therefore, is the brand, and where it is located is secondary. A consequence is that loyalty to the destination, be it Mallorca, its individual resorts is potentially loosened. And experiences and personalisation for the P2P traveller can also undermine specific destinations. These travellers place a premium on the social-media aspect of sharing information and recommendations. If they are for somewhere other than Mallorca, then so be it.

The importance of these trends can be over-exaggerated. The traditional package holiday, for instance, and despite repeated reports of its death, is not about to disappear any time soon. But they are trends which cannot be ignored and so make it imperative that Mallorca acts to confirm and reinforce tourist loyalty to it.

There was a statement the other day that the "summer sells itself". Well yes, it does, but to believe, against the background of these trends, that "selling" is not required is wrongheaded. It is needed as never before, and so Mallorca needs its own assault, one it is currently failing to deliver, that of loyalty building through social media. And, moreover, it is an assault that needs to embrace, not deny, the P2P revolution.

The Sharing Lobby

The regulation or non-regulation of holiday lets has reached the highest levels of Spanish governmental administration. The national competition commission is addressing the issue, taking account of the explosion of the P2P phenomenon, i.e. web portals which place consumers in direct contact with providers, be they apartments for rent or other types of service. As the issue climbs towards the top of the regulatory heap, companies engaged in P2P in Spain have formed an association to lobby government. It includes the most celebrated of the P2P websites, Airbnb, plus other accommodation websites and, for example, car sharing sites. It does not include Uber, however. This taxi and transport network has been condemned in Spain for providing unfair competition. A judge has ordered Uber to cease all activities in Spain. The French are to ban Uber from the start of next year.

But if Uber is a sort of black sheep of the P2P community, other web operators are craving legitimacy and have so formed their association - "Sharing España". Much of this sharing, holiday accommodation and so on, is considered by opponents to represent an underground economy, which this week was said to equate to 22% of the Spanish tourism sector. How such a figure is arrived at is unclear, but the secretary-general of the Spanish Confederation of Hotels and Tourist Accommodation, Ramón Estalella, asserted that 22% it was. The hoteliers want tough action on any form of what they see as unfair or illegal competition, but arriving at regulations is far from straightforward. As the director-general for tourism in the region of La Rioja has quite rightly noted, attaining uniform regulation in all regions of Spain would be "unworkable". She has thus reinforced the fact that the devolution of responsibilities for holiday let regulation to the regions by national government is itself all but unworkable; the consequence of this is that there are seventeen separate regulatory frameworks.

The holiday lets sector is now trying to fight back against the hoteliers and their claims. The association for apartments for tourist use (APTUR) in the Balearics has argued that holiday lets generate more employment than the hoteliers do, both directly, e.g. through cleaning services, and indirectly - car hire, restaurants, shops, etc. This lobby in the Balearics has, until recently, been fairly quiet, unlike in the Canaries, and the association for holiday rentals there held its first forum on Monday at which a video was unveiled. It is called "Holiday rental: the tourist decides" and features personal accounts by tourists as to why they opt for non-hotel accommodation. In addition, Homeaway, an online holiday rental marketplace similar to Airbnb, has teamed up with the university in Salamanca to create the first "barometer" of holiday lets activity in Spain and specifically in the Canaries, where the economic impact of the sector is said to have been worth 817 million euros over the past three years. The Canaries are, unlike the Balearics, edging towards a permissive form of regulation akin perhaps to that of Catalonia. And that region, the only part of Spain which has a tourist tax, anticipates generating 10% of revenue from the tax in 2015 from accommodation which has been regularised and which may legitimately form part of P2P sites' offers. Catalonia is looking forward to raising 44 million euros from tax next year, meaning that holiday lets will account for approximately four million. This is revenue which is used for tourism promotion purposes.