the business is too big to do this

When Airbnb launched 16 years ago, its founders didn’t expect to disrupt the global real estate market. In its original concept, Airbnb allowed hosts to offer affordable accommodation in their own homes, usually in the form of an air mattress (or at best a sofa bed), and share breakfast.

Thus, the platform allowed travelers to visit other cities at a much more affordable price. The Airbnb we know today has evolved into something completely different, and even its founders are not satisfied with its development.

Headache of cities. Airbnb was the spark that ignited the problem of tourist apartments, which is currently causing so many problems for public administrations, contributing to the housing shortage and rising rental prices.

In 2022, Airbnb CEO and co-founder Brian Chesky admitted in an interview with the publication Bloomberg that the original nature of the company had been changed. In his own words, the company “was created for a much smaller company that grew like wildfire.” While Chesky has called on landlords to lower their rates, the issue will take time to resolve.

Airbnb’s Economic and Social Impact. One of the main problems with the boom of the Airbnb accommodation model was that countries did not have firm legislation to regulate the impact of this new type of accommodation, which combines the tourism sector with the real estate sector. Two strategic sectors for countries such as Spain, Italy and Portugal.

What started as an alternative to space sharing has grown into a multi-million dollar business that many owners have used to generate significant income by renting out their entire properties, exacerbating the housing shortage.

Reasons for rising housing pricesAirbnb is not the only tourist accommodation platform on the market, but it was a pioneer in this type of modality, causing it to cause an escalation in housing prices due to the high profitability of the properties that the platform offers.

A study conducted by researchers from the University of Barcelona analyzed the impact of the platform on a city with a tendency to attract mass tourism, such as Barcelona. The study concluded that Airbnb’s activity led to an increase in rents by 1.9%, transaction prices by 4.6% and published prices by 3.7%, which had a noticeable impact on the local rental market: the average increase in rental apartments was 7%.

Rudder travel (failed)In 2023, Airbnb’s CEO tried to redirect the platform toward its shared origins, trying to make it less commercially interesting and recapture the home-sharing spirit with which the platform was born.

This attempt led to the emergence of a movement called “Airbnbust”.

Open war against tourist accommodation2024 won’t be a good year for Airbnb, as more and more cities are shutting down their hosting services in a desperate attempt to control prices and make accommodations affordable for locals.

Cities such as Barcelona have revoked thousands of tourist home building licences, reflecting widespread concerns about the influence of platforms such as Airbnb on the supply of long-term rentals.

Compete with hotels, not rentalsChesky noted the importance of ensuring Airbnb’s prices are competitive with hotels, suggesting offering hosts tools that would allow them to adjust their prices based on local hotel data.

“A lot of people learned about our service from a price point of view. The more affordable Airbnbs are, the more bookings we get,” said the Airbnb founder. Bloomberg in his interview.

Too profitable to pass upWhile Airbnb remains attractive due to its prices, convincing hosts to lower their rates is a challenge. Many landlords have found the platform too lucrative a source of income to give up, exacerbating the shortage of long-term rentals.

According to a study by the Complutense University of Madrid, tourist accommodation in Barcelona will have a major strategic advantage over city hotels, as it is concentrated in the city center, which increases the likelihood that a tourist will choose to stay in an Airbnb rather than in a hotel further away. This advantage means that the platform founder’s desire to adjust prices is very far from the reality of the owners of these apartments.