Tag: collaborative economy

Carmena to Outlaw 95% of Madrid’s Tourist Apartments

27 July 2018 – Expansión

The days are numbered for tourist apartments in the centre of Madrid. Yesterday, the Town Hall of Madrid gave the green light to legislation that will put a limit on holiday rentals: 90 days or three months, is the maximum term that a person may rent their home for those purposes. From day 91 onwards, owners will need to have a commercial lodging licence, just like hotels.

Yesterday, the Spanish capital’s Governing Body approved the Special Plan for the Regulation of the Use of Lodgings, which will apply to the city’s most central neighbourhoods. The plan is expected to enter into force at the beginning of 2019, after being approved by the plenary session in October.

The Town Hall led by the mayor Manuela Carmena is also going to prohibit the operation of all homes destined to tourist rental that do not have an independent entrance, like in the case of hotels. According to the Town Hall, with that requirement, “95% of homes that operate as tourist apartments will no longer be able to do so”.

“Specifically, the affected radius will span 52.7 km, distributed in three concentric rings, depending on the massification of the ads. According to the Town Hall, in the rest of the municipality, “the existing legislation will be maintained”. Madrid is, in fact, the European capital where the number of adverts on these platforms has grown by the most, up by 67% in 2017 with respect to 2016, according to a report from Colliers International.

With this legislation, Madrid’s Town Hall is opening a new chapter in the fight between public administrations and tourist apartments. Its intention is to outlaw almost all of the tourist apartments that are advertised on platforms such as Airbnb in the centre of the city.

The prohibition is tacit. The trick is that 95% of the homes advertised on these platforms in the capital do not have an independent entrance. That limitation will only exist in the case of homes that are leased for more than three months. The 90-day limit draws a line between what is considered a home for tourist use and a property in the collaborative economy.

Obtaining a licence is not going to be easy. It will be subject to zoning, following in the footsteps of cities such as Barcelona. Once the Special Plan comes into force, it will not be possible to change the use of a home located within the inner two rings from residential to tertiary, given that those properties account for the majority of the regulated and unregulated tourist supply. Together with this new plan, the Town Hall has approved a moratorium that prohibits the granting of tourist licences of any kind for one year.

Putting a cap on rents

The objective of the plan is to preserve residential use in the central areas of the city that, with the tourist boom and rise of online platforms, are seeing rising rental prices.

In this vein, the Town Hall wants to establish maximum rental prices. To that end, and as it already did in the case of the request for the tourist tax, the delegate for Sustainable Urban Development, José Manuel Calvo, yesterday asked Sanchez’s Governments for the necessary powers.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

PwC: Spain’s RE Sector Retains Appeal As World Uncertainty Intensifies

26 January 2017 – Cinco Días

According to the findings of the Real Estate Market Trends in Europe 2017 report, prepared by PwC and the Urban Land Institute, the real estate market is currently preparing itself to face a 2017 full of geopolitical uncertainties, just like it had to last year when Spain had an acting Government for more than 10 months. The RE report has been compiled on the basis of a survey of 781 of the main players operating in the sector.

In this way, the year that has just begun is probably full of more uncertainties across more countries than ever before (Brexit and up-coming elections in France, Germany and The Netherlands, as well as potential repercussions from the new policies of Donald Trump in the USA) and in the face of such situations, investors tend to react with caution.

In the real estate sector, experts forecast that the market will continue to evolve in a positive way because it will remain attractive thanks to the relationship that exists between risk and return. Within Europe, Spain stands out amongst the major markets thanks to its attractive prices and the potential it has across many segments, such as the hotel sector, residential segments (including halls of residence for students, nursing homes for the elderly and the health sector) and offices for shared services.

In this way, the experts that participated in the preparation of this study agreed that whilst the returns offered by the real estate sector in the main countries in Europe will grow at a slower rate because this business is starting to stabilise, Spain will continue to be one of the most attractive destinations.

In terms of the potential effect of Brexit, most investors agree that its impact is going to be limited to the British real estate sector and will not have a significant impact on property-related investments in other EU countries. What’s more, 76% of those surveyed said that, in their opinion, such investments will be maintained or may even increase. Nevertheless, the expectations in terms of returns from the real estate sector as a whole across Europe are more moderate this year following several years of extraordinary growth.

Moreover, 35% of those surveyed expect to receive lower returns on their assets over the next 12 months and 53% recognise that it will be very hard to improve upon the returns achieved last year. Another aspect described in this report is that the European market in general and the Spanish market in particular is characterised by a scarcity of prime or premium assets and the feeling is, according to 58% of those surveyed, that those assets that are available, are starting to become over-valued. In this environment, “the importance of asset management intensifies as it is the key element for managing risk and return”, explained Rafael Bou, Partner responsible for Real Estate at PwC. (…).

Looking ahead to the future, 91% of those surveyed said that technology “is going to change” the way we use real estate assets. The most important trends between now and 2030 relate to: the boom of the collaborative economy, robotisation, teleworking, self-driving cars and new buying habits.

According to the report, Berlin leads the ranking of European cities with the best investment prospects for the second year in a row. Madrid and Barcelona occupy 9th and 16th positions, respectively, given the “strong outlook for rents and the improvement in the country’s overall situation”.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Málaga Accounts For 53% Of Andalucía’s Holiday Homes

11 December 2015 – La Opinión de Málaga

The province of Málaga may account for more than half of the supply of holiday homes for rent in the autonomous region of Andalucía – specifically, 53% – at least, that is according to the calculations performed by the international firm Homeaway. The company is one of the market leaders in a segment that is causing a lot of controversy at the moment, with hoteliers, through groups such as Exceltur, accusing its participants of unfair competition given that they operate in a legal vacuum and are not subject to tax charges. The spokesman for Homeaway in Spain, Joseba Cortázar, who was speaking at a conference about the collaborative economy held yesterday in the Andalucía Lab de Marbella, said that the region, which has 14,600 properties advertised on its website (7,800 in Málaga) accounts for 16% of its total holiday rental supply in Spain (around 88,000 properties). Homeaway, together with Airbnb and Niumba, is one of the most representative companies in this sector, accounting for almost a quarter of all activity in Spain.

Homeaway, which cites that the Costa del Sol is one of its main markets, says that, at the global level, rented holiday homes have generated an economic impact of €793 million in Andalucía over the last two years, of which €761 million was spent on leisure and food during visitors’ stays, “impacting directly on businesses in the region”. The data is presented in a report compiled for the company by the Marketing Department of the University of Salamanca. In its conclusions, it says that rented holiday homes “are not competition, but are actually complementary to hotels, given that 81% (600,629) of the 740,000 visitors (resident in Spain and aged between 18 and 65) who leased tourist accommodation in Andalucía during the last two years, also stayed in hotels and only 19% (140,088) exclusively leased holiday home accommodation.

Homeaway’s report also says that the people who rented both holiday homes and hotels for leisure and holidays are the ones who take the most trips per year (6.57 times), a higher number than those that have stayed in a holiday home in Andalucía at least once in the last two years, independently of whether they have complemented their stay with nights in a hotel (5.84 times). According to this data, families (47%), couples (28%) and groups of friends (23%) are the main users of holiday homes in the autonomous region, whilst couples (49%) and families (34%) are most prevalent in hotels, with groups of friends taking a smaller share of the market (10%). For Homeaway, the report demonstrates the “complementarity” of the two accommodation types.

Cortázar did acknowledge that holiday homes in Andalucía are still in a “lawless” situation given the lack of specific regulation beyond that afforded by traditional rental guidance. (…).

On the flipside, Exceltur published a study in Málaga a few weeks ago, which showed that holiday homes do not represent a complementary offer, but rather are an invasive, substitute product, which offer no real capacity to attract new or different tourist besides the ones who typically use regulated hotels and apartments. Exceltur indicated that the majority of the visitors opting for that formula do so primarily for price reasons (…). Its report also denies that holiday homes can be defined as part of the collaborative economy: only 7% of homes advertised on digital platforms – the real driver behind the sector – involve free exchange and are offered in return for no payment. The rest, according to Exceltur, represent “a huge business”.

Original story: La Opinión de Málaga (by José Vicente Rodríguez)

Translation: Carmel Drake

Tourist Sector Hits Back At Airbnb, HomeAway & Niumba

18 May 2015 – Expansión

The sector is demanding a stronger institutional fight against the intermediaries. The Government says that each region is responsible for its own response.

The main Spanish tourism companies have teamed up in an offensive with the aim of limiting the power of the proliferation of unregulated tourist rental accommodation, which do not pay taxes and do not meet the safety, hygiene and space requirements and other guarantees offered by legal accommodation. The sector wants to curb the platforms (websites such as Airbnb, 9flats, Wimdu, Rentalia, Niumba and HomeAway, amongst others) that make money by acting as intermediaries. And to that end, it has been pressuring the Spanish Government for some time to prohibit them, since they think that the autonomous communities are not fulfilling their regulatory duties.

Over the last few months, the tourism association Exceltur, whose members include prestigious companies such as NH, Melia, Iberia, American Express, Hotusa and Globalia, has been holding conversations with the Secretary of State for Tourism (who reports into the Ministry for Industry, Energy and Tourism). Exceltur thinks that the Executive “could do a lot more” to regulate the operations of these rental companies, which it considers are unfair competition and which threaten its business. The main trade association for Spanish hoteliers, Cehat, estimates that between 2010 and 2013, the number of customers staying at these establishments increased by 300%, and it calculates that the number of foreign tourists who use them represents more than 20% of the total.

To support its position, Exceltur has commission the consultancy firm EY (Ernst & Young) to conduct a study analysing the impact that this illegal rental accommodation is having on the tourism sector as a whole, not just on the hotel segment. To date, EY has prepared a report about the consequences for the Balearic Islands if this rental accommodation continues to grow at its current rate over the next ten years. According to its calculations, the hotel sector would lose between 5,000 and 13,000 jobs and forgo a gross added value of between €211 million and €529 million.

Regional jurisdiction

The Government says that tourism is a regional jurisdiction, and so the Central Administration cannot do much beyond trying to standardise the regional regulations as much as possible. Moreover, the upcoming regional and general elections are likely to scupper any attempt at reform.

To date, the regions that have endeavoured to do the most to regulate tourist rental accommodation are Madrid and Cataluña, although the former received a blow from the National Competition and Markets Commission (CNMC) in March when it ruled that the Madrid law (which only allows accommodation to be rented provided the minimum stay is five days) is a barrier to free competition.

Meanwhile, the Catalan Generalitat requires intermediary websites to ensure that each property offered for rent has a kind of identification number plate to accredit it as accommodation with its license in order. Last summer, Cataluña imposed a fine of €300,000 on the web portal Airbnb for allegedly failing to comply with that standard.

On an international level, cities are taking a variety of decisions. Thus, for example, New York has declared war on tourist rental accommodation, with coordinated teams of tax inspectors, police and lawyers; and the town hall of Amsterdam has just approved an agreement with Airbnb, which requries the platform to coordinate the collection of the tourist tax that is applicable to the activities of its users.

The so-called “collaborative economy” represents a real headache for legislators, both in Spain and across Europe. In Spain, Article 16 of the Law for Information Society Services (2002) states that intermediaries (such as Airbnb, Uber and others) are not liable for the possible unlawfulness of the people they host, unless they have specific knowledge thereof. Meanwhile, the European Commission is drafting a directive that may ease restrictions on the European market and facilitate the activity of these platforms.

Original story: Expansión (by Yago González)

Translation: Carmel Drake