April 2016, London
Local lettings laws and the ‘sharing’ economy in Europe: debatable, dated or disingenuous?
As Airbnb and 47 others call for a soft local touch from the European Commission, what do more traditional rental firms wish for?
Last week Airbnb joined 47 other ‘sharing economy’ signatories, including other home exchange sites bedsonboard.com, lovehomeswap.com and onefinestay.com, to call on the European Commission to take a soft regulatory touch with the so-called ‘sharing’ sector.
In an open letter to The Netherlands’ Prime Minister Mark Rutte, the Presidency of Europe’s Competitiveness Council, came the plea: “In view of the upcoming European Competitiveness Council, we urge Member States to support these objectives and continue to seek to ensure that local and national laws do not unnecessarily limit the development of the collaborative economy to the detriment of Europeans.”
Whether the collaborative brigade is working in favour of ‘all Europeans’ is a hotly debatable point, made clear at a UK Business Innovation & Skills (BIS) Committee last month. Here the British Hospitality Association, the ‘champion of the 180,000 businesses and 4.49 million people who work in UK hospitality & tourism’ called into question the legality of firms like Airbnb. Its most damning claim: ‘that 40% of all home-exchange website listings are ‘professional landlords’ running unregulated ‘pseudo-hotels’, helping to inflate house prices in already stretched cities like London.
Unsurprisingly, BHAs claims were vehemently denied by Patrick Robinson, Airbnb’s head of public policy in Europe, who reiterated his firm’s official line that: “hosts are people who share their homes and use the money they earn to pay the bills”.
Well most of them, anyway. Airbnb now also welcomes professional landlords.
In the UK, the government has come out in strong support of the sharing economy. It its 2015 Budget Red Book it states: “The government wants to ensure that Britain is the global centre for the sharing economy, enabling individuals and businesses to make the most of their assets, resources, time and skills through a range of online platforms.”
However, it may not be so easy elsewhere in Europe, where 28 member states all have their own laws for US tech giants like Airbnb to navigate.
No doubt, lobbying from all sides will continue, ahead of the upcoming council.
Okay, so we know what Europe’s so-called ‘sharing’ brigade want from the European Commission but what about more traditional players like HomeAway, an online marketplace in the traditional holiday rental space?
After all, Expedia’s $3.9bn acquisition of HomeAway last year was, some have argued, a move to go head-to-head with Airbnb in, as Expedia CEO Dara Khosrowshahi described it at the time, “the fast-growing, $100bn alternative accommodations space”.
Unlike Airbnb, however, the majority of properties HomeAway advertises on are not in city hubs, where the residential rental market may be constrained and may limit the options for long-term residents. HomeAway also requires property owners and managers to confirm, in a legally binding contract, that they will comply with all applicable laws.
So would HomeAway like to see tougher local regulation for the likes of Airbnb? In the UK, after all, 50% of Airbnb lets are for the entire home or apartment, not, which is how it all started, just for a private room with a local flavour.
Well, not exactly. Says Marcello Mastioni, Vice President EMEA of the HomeAway brand: “Local laws can be complicated and they can lead to confusion as to such legal obligations.”
He is not disputing the importance of compliance on the part of property owners or managers but says HomeAway’s official position is as follows.
“It’s our view that the laws and regulations currently in place to address rental of whole homes are sufficient and we would say, therefore, that no further laws or regulations are required. Any further regulation would be unnecessarily costly, burdensome and could be counter-productive by driving rental activity ‘underground’ rather than achieving increased regulation”.
So while more or less local regulation remains a moot point, the term ‘sharing’ economy is starting to feel a disingenuous PR move too far. At the BIS committee last month, even Robinson hinted at the term starting to look a little dated for today’s world. Airbnb and other ‘sharing’ or ‘collaborative’ players are, in the end, purely commercial ventures in a fast changing distribution landscape.
Join us in London for TDS Europe (April 19-20) to where HomeAway and Airbnb and numerous other leading travel brands will be debating the future of travel distribution