Short-term rental advocacy in time of crisis

Worldwide: James Burrows, CEO of channel management solution Rentals United, talks to prominent short-term rental associations, the STAA [Short Term Accommodation Association, in the UK] and FEVITUR [Spain], to discern the key areas in the short-term rental industry that are critical for advocacy and how the pandemic has affected those efforts.

The short-term rental market has grown at significant rates globally over the last decade. Such exponential growth has outpaced that of the pace of government regulations around the world. The ease at which owners can rent out short term rentals has been accelerated further by the proliferation of online platforms such as Airbnb and Vrbo.

The expansive short-term rental industry is here to stay, changing the nature of traditional travel. The market offers travellers a more diverse range of accommodation options and gives life to locations where hotels are lacking thereby feeding the economy of the respective local businesses. The market has also proliferated new jobs as well as spurned a whole new ecosystem of startup businesses to support it, such as housekeeping services and home automation.

Local governments have tried to regulate the industry to both protect the renters as well as the residential neighbourhoods. In turn, the government regulators have also earned income from tax revenue in order to fund public projects and the like. Regulations vary from location to location and can be complex to understand from a holistic perspective.

The establishment and certainty of the short term industry makes advocating for their rights and regulations essential in locales around the world. It behooves property managers then to advocate for their positions in the marketplace.

In this article we talk to two prominent advocacy groups, the Short Term Accommodation Association [STAA] from the UK and FEVITUR in Spain, to discern the areas that are critical to advocate as well as how the Covid pandemic has affected the efforts.

What is the goal of short-term rental advocacy?

“We need to find a way to come together and have a voice, so we can take affirmative action when it comes to lobbying, but also to share knowledge and best practices across the UK, Europe, the US and beyond,” Graham Donoghue, CEO of Sykes Holiday Cottages [20,000 rentals in the UK and New Zealand) on ShortTermRentalz’ recent RockSTRz webinar on “Which Business Model will succeed in the Post-Covid World?”.

The goal of advocacy in the short-term rental space isn’t just to achieve the most favourable outcomes possible for short-term rental operators.

As the VRMA Advocacy Fund states, advocacy is aimed at protecting the rights of travellers to choose the type of accommodation they prefer, the rights of property owners to rent out their vacation homes, and the rights of property management businesses to rent out properties.

Next to this, advocacy also aims to protect the local community and create fair and balanced regulations that benefit both sides.

The media has often painted short-term rentals as the sole culprit of various issues that cities like Barcelona, Amsterdam and Venice face – including housing shortages and gentrification.

​However, they failed to acknowledge that these problems are caused by unauthorised companies who are abusing the system. Within the right regulatory framework, short-term rentals add significant value to local communities.

Short-term rentals have a positive impact on local communities by providing an economic opportunity for local communities, as travellers often spend their money at businesses in the area. The industry creates jobs for cleaners, maintenance workers, check-in staff etc., while also generating tax revenue for the local government that can be used to fund public projects.

What happens when local policymakers devise unfair regulations?

When local governments impose restrictive policies on short-term rentals, they also deprive their communities of the benefits and value.

“Responsible actors within the industry have as much to gain by removing rogue operators as anyone else and therefore will always back necessary and proportionate regulation. But those words are crucial. Policymakers need to ask themselves what is the problem that they are trying to solve, and will the solution that they have devised end up having harmful unintended impacts on legitimate operators,” says Merilee Karr, chairperson of the STAA.

Unfortunately, there has been several instances of unfair policies stripping communities of opportunities.

Karr said: “Take the new rules in Scotland, for instance. Introducing a licensing system for people who only want to short-let for a couple of weeks in the year is not at all a proportionate response. The likelihood is, unfortunately, that many non-commercial operators will decide that it is not worth their while to continue, depriving them of valuable additional income and taking away the authentic sharing economy side of activity in that market.”

What’s more, unreasonable limitations often exacerbate problems instead of solving them, because they encourage illegal activity and lead to a complete loss of accountability.

Why should property managers become advocates?

“If you’re not at the table, you’ll be on the menu,” said Steve Milo, CEO of VTrips [2000+ rentals in Florida] on the Sarah & T podcast.

Particularly in the midst of the current mobility crisis, property managers should get involved with advocacy now rather than later when there are already strict policies in place. Property managers are the most qualified to speak on the industry, especially since there is a lot of misinformation out there.

Policymakers are not on the front lines and, therefore, don’t understand what the business needs are and how the short-term rental industry contributes to the community.

“As a comparatively new industry in many senses, the short-term rental sector is often poorly understood by policymakers and other stakeholders, who do not always see that there is more to it than a few big global platforms,” said Karr.

Property managers are encouraged to join the local advocacy association. According to her, it is particularly essential for smaller companies and operators to voice their issues and concerns. Otherwise, regulators may not take into account the complexities of the market and devise policies that don’t include the smaller managers.

Karr said: “In the ongoing coronavirus pandemic, for example, many of our members have struggled to access government relief, because the eligibility criteria are based on an outdated understanding of what a hospitality business is. It is vital for the viability of short-term rental operators that they have a forum in which they are able to raise concerns such as these when they arise, and a means of communicating them to the government.”

What’s the outlook for the industry past Covid-19?

Karr is optimistic that after the crisis, securing fair regulations will help to initially recover then to rebuild the industry.

She said: “Indeed, our sector was born following the last recession, when people needed to do something to make a little bit of extra money. The sharing economy is well placed to do that following this economic crisis.

“We believe that ensuring people are able to monetise what, for most, is by far their largest asset, with the uncertain times we are likely to see ahead of us will help us as an industry to grow and help democratise accommodation so that many more can benefit from our industry in the years to come,” she added.

Karr believes that ultimately, self-regulation in the form of accreditation is the best way forward. The STAA has developed an accreditation in collaboration with Quality in Tourism, which “helps define what professional operators should be delivering and provides that stamp of approval so consumers can understand and choose operators they trust”.

“There should be no need for onerous regulations of our sector if we can prove we operate to the right standards around the UK and across the world,” she added.

As for FEVITUR, they will continue “working to fight against all those unfair regulations and dismantle the theories that accuse the sector of being responsible for many of the evils that affect tourism, and our cities in general”, said Patricia Valenzuela, director of FEVITUR.

As it stands, the last quarter of the year will be challenging and recovery will depend on local and domestic travel demand. But even during the fight for survival and recovery, it’s important not to forget about the ultimate goal of creating “a regulatory framework that prioritises free competition, fiscal rigour, quality and the promotion of competitiveness in our industry,” said Valenzuela.

How can property managers get involved in advocacy?

It is critical for property managers to understand the regulations that are in effect in locales where their properties are located. The most helpful way to do this is to contact and team up with the local short term rental advocacy group.

Karr said: “We would encourage property managers to join the STAA or your local association. Working with other companies across the sector to develop a common position we can advocate for is critical. It is important to speak with a single voice to the government at a local and national level to impact change, or indeed to prevent knee-jerk regulation which might severely impact the industry.”

Property managers are also encouraged to share their stories online and in the media. And optimally if there is an opportunity to engage with policymakers, it behooves them to speak out and have their voices heard.

Above all, property managers must keep advocating for their position in the marketplace. The short-term rental accommodation sector is not going anywhere so collaboration with the regulatory bodies is essential.