European hoteliers push for sharing-economy regulation
European hoteliers push for sharing-economy regulation
14 OCTOBER 2016 8:30 AM

After several years of government indifference to its argument that sharing-economy competitors are not playing on a level field, the British Hotel Association and other organizations are turning their attention to the effects on housing rents and shortages.

LONDON—European hoteliers are growing more frustrated with what they perceive to be an uneven regulatory landscape when compared to sharing-economy competitors like Airbnb.

Speaking at a Hotel Distribution Event panel titled “New battlefields: A fair fight,” sources said hoteliers need to collectively make the argument that the sharing economy should be subject to stricter regulation and taxation.

Kike Sarasola, CEO of Room Mate Hotels, said an even playing field is growing ever more important for hoteliers as young guests are willing to look at all options for travel. Sarasola said that mentality helped drive Room Mate, which owns 23 assets, to create the apartment-sharing service Be Mate.

“Twenty-five-year-olds do not care about hotels; they care about travel. I saw Airbnb as an opportunity,” he said.

Sarasola called for sensible, progressive regulation of the sharing-accommodations sector that considers the differences it has with traditional hotels.

“If they are not properly thought-out, they will create a black market,” Sarasola said.

Sarasola said it’s also important that regulators not fall into the habit of trying to catch up with what sharing-economy providers have done in the past.

“Regulators are always behind the market,” he said.

British Hospitality Association CEO Ufi Ibrahim agreed the sharing economy has a place in the world of paid accommodations if property regulated, but added hoteliers should be ready to bring up the issues they create.

Ibrahim said that in the U.K. “42% of listed Airbnb properties are pseudo-hotels,” that is, multiple-property owners renting accommodation on a short-term basis year-round, and “the top 1,000 (Airbnb) hosts (in the U.K.) earned £169 million ($207 million)” per annum.

This trend has helped cause housing shortages and drive up rents, she said.

Ibrahim said Europe’s cities are increasingly reacting to concerns of housing shortages and the sharing economy’s lack of data, compensation and transparency in this offering.

The Share Better coalition in New York City is voicing similar worries.

“We do not want London to become the Wild West,” Ibrahim said, who added her organization is pressuring London mayor Sadiq Khan on the issue.

When asked if it was true that not all serviced apartments members of the BHA had gained planning or change-of-use permission for their properties, Ibrahim answered that accusation might be true but all members were correctly registered with tax and other authorities.

The other panelist, Frank Reeves, CEO and co-founder of booking-platform provider and consultancy Avvio, said any amount of data released by Airbnb and their peers would not stop their swift progress.

“I have no doubt more consistent regulation is needed, but that will not slow Airbnb down,” Reeves said. “The ease of access to them from Google searches will just increase the awareness of them and their growth.”

Other threats
In a landscape where disruptors are producing more and more product with every week, hoteliers will need to concentrate on delivering hospitality, panelists said. The pressure on them will only increase if Airbnb becomes a distribution channel, they added.

“I have rooms, suites, apartment, family rooms,” Sarasola said. “And my guests are happy. You have to go with the flow.”

Panelists said that another threat to hoteliers was that families are rethinking what a luxury stay means to them. Disruptors such as sharing economy luxury apartment provider Onefinestay—now owned by AccorHotels—was indicative of that trend.

Ibrahim said the future is bright for U.K. hoteliers, as long as regulations are put in place to control the sharing economy.

“Tourist numbers are growing phenomenally, from 200 million to 1.2 billion in a short number of years,” Ibrahim said. “All economists have seen a direct correlation between (gross domestic product) and travel spend. There are more people and more disposable income. … China is soon to pass the U.S. in outbound travel numbers. The market is big enough as long as it is controlled.”

Ibrahim also said the rise of travel to certain destinations resulted in those destinations being under threat from sheer numbers.

“The mayor of Amsterdam is actually pleading that tourists instead go to Rotterdam,” Ibrahim said, who added U.K. hoteliers needed to be applauded and supported for continually improving the guest experience and scoring higher in guest questionnaires on international hotel standards.

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