South China Morning Post
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Venice’s normally busy streets and canals have been empty during the coronavirus lockdown. It remains to be seen how tourism recovers from the crisis, and whether short-term holiday rental properties such as those advertised by Airbnb will still be as popular. Photo: Shutterstock
Opinion
Bloomberg
Bloomberg

Will coronavirus pandemic end the Airbnb economy and overtourism, allowing rental economies in tourist hotspots to recover?

  • The days when cities and attractions were crushed under the weight of overtourism seem a distant memory
  • They are all empty now, but what will happen to short-term rentals when the pandemic is over? And would anyone pine for the Airbnb economy if it doesn’t return?
Bloomberg
Bloomberg
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Until recently, Airbnb encapsulated the first-world problems of living in a global “superstar” city.

Over the past decade, the app that connects fly-by-night tourists and short-term renters to “cosy” lofts and five-star “experiences” morphed into a gig-economy nightmare for cities like Paris, Amsterdam and Barcelona.

Booming demand fuelled an oversupply of tourists, an undersupply of housing for locals and extra strain on public infrastructure. Scammers and fraudsters prospered. Many cities began a clampdown.

That all seems like ancient history now.

If you could freely walk the world’s most famous city streets today, you would see humanity stopped in its tracks. National lockdowns and global travel bans have emptied bustling hotspots like Sydney’s Opera House, Bangkok’s night markets, the Louvre Museum in Paris and the Colosseum in Rome.

Global tourist traps are being slammed shut, and the ecosystem that sprang up around them is falling apart – including Airbnb. Flats once reserved for well-heeled tourists have seen bookings slump anywhere from 41 per cent to 96 per cent. They’re now on long-term rental sites or offered to health workers in solidarity.

At the moment, we’re all probably eager for the crush of humanity to come back to our cities. But when the sound of ambulance sirens stops filling the streets of Paris and Rome, and the stifling oppression of self-isolation lifts, many might still pine for a “cratering” of the Airbnb economy.

That sounds harsh, considering some use it to get spare cash out of their spare room – the firm says 14 per cent of hosts are from households that include teachers. But in London or Paris, where some studio flats can cost over US$1 million, it’s unlikely to be teachers earning the equivalent of US$30,000 who are able to offer city centre flats to overseas visitors. 

Banners reading ‘No tourist flats’ hang from balconies in Barcelona’s Barceloneta neighbourhood to protest against the proliferation of holiday rental flats in 2016. Photo: Pau Barrena/AFP

Paris has 100,000 empty homes and 100,000 second homes, according to the mayor’s office, fuelling a sense of social injustice. One study of Airbnb in a Lisbon neighbourhood between 2015 and 2017 found it looked less like a sharing economy and more like a buy-to-let craze, with 99 per cent of short-term rentals marketed all year round. 

“Short-term rentals have had a disastrous impact on cities’ rental markets,” McGill University’s David Wachsmuth told The Intelligencer last month.

Will a post-Covid-19 society really want that back? As Airbnb hosts apply for financial support to tide them over, they might reflect on a future that could be very different. Post-coronavirus tourism and city life may not rebound as quickly or smoothly as after previous disasters like 9/11 or Sars. Already, in China, the slow return of tourism is – understandably – skewed towards domestic, not international, trips.

The tourism industry has been halted, with borders closed, flights cancelled and a total drop off in short-term lets. Photo: Anusak Laowilas/NurPhoto via Getty Images

If France loses a chunk of its two million annual Chinese visitors and their €4 billion (US$4.4 billion) in associated spending, that is a rough prospect for rentals. But it will be good for housing stock. And Europe will have an incentive to cultivate its own domestic tourism industry.

Satellite museums such as the Louvre-Lens, or lesser known alternatives to globally renowned hotspots – like Treviso, near Venice – might prosper.

We shouldn’t imagine that cities will lose their ability to concentrate jobs, people and money. Europe’s greatest cities have survived plague, cholera and wars deadlier than Covid-19. And we will crave human contact even more after this virus, reckons venture capital investor Stefano Bernardi, who is a rarity among his peer group as someone who shunned cities to live in the Dolomite mountains. As anyone currently juggling conference calls and childcare can attest, real face time has value.

Still, this crisis may be a chance for a more balanced recovery than a return to the norms of overvalued, overcrowded and overpolluted cities. And if your next holiday is a trip to the suburbs, that will give the Mona Lisa more time to put her feet up.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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