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EU legislation moves step closer after policymakers give green light

Europe: European policymakers have given the green light to proposals to regulate short-term rental platform activity across the bloc, while ensuring that the rules on hosting are simple to understand and implement and proportionate within EU law.

As expected, the EU’s Internal Market and Consumer Protection [IMCO] Committee adopted the proposals with 31 votes in favour [with none against and one abstention, laying the framework for eligible authorities across the 27 member states to have access to data that will allow them to build and enforce fair and proportionate rules at a local level.

The incoming regulations will include:

  • A simple, online registration procedure for short-term rental properties in jurisdictions that require it
  • A streamlined data-sharing framework to support evidence-based policymaking
  • Obligations for platforms to help ensure that information shared is correct, in-line with the provisions in the Digital Service Act [DSA]

EU data suggests that short-term rentals currently account for around a quarter of all tourist accommodation in the European Union, fuelled by the rise to prominence of platforms such as Airbnb and Vrbo and the sharp growth in inventory with more users wanting to earn fresh revenue streams from hosting. Policymakers acknowledged the value of short-term rental accommodation to local and national economies, but stressed the need for more standardised rules across the Union to “enhance transparency” and “help public authorities ensure the balanced development” of a sustainable tourism sector.

A press release issued by the European Parliament read: “MEPs believe that new policies regulating STRs should give platforms opportunities to grow while respecting policy objectives like affordable housing, protection of urban centres and rural areas, and lead to safer and more sustainable tourism.”

Airbnb said that it welcomed progress towards EU-wide short-term rental rules, having worked with authorities on “smart” rules in markets such as France, Greece and the Netherlands, where many of its listings in the EU are located.

Meanwhile, Brando Benifei, a Progressive Alliance of Socialists and Democrats [S&Ds] MEP [which wants to “protect affordable housing for everyone”] and negotiator on the ‘Data collection and sharing relating to short-term accommodation rental services’ report, said: “… With no doubt, online short-term rental accommodation services have affected our societies in not only the way we visit other places, but also the way we interact with our cities.

“Touristification’ is one of the many consequences we are facing due to this phenomenon. This is why we, the Socialists and Democrats, believe that, through this regulation, we can help public authorities to regulate a sector that continues to boom.

“For the S&Ds, it is crystal clear that the responsibility should be shared among the hosts, online platforms, and public authorities. This is why we have pushed to make sure that online platforms not only assess whether the information provided by the host is reliable and complete, but also that they conduct checks on a regular basis,” he added.

Stricter and more consistent legislation governing short-term rental platforms in the EU have long been in the works, culminating in the European Commission adopting a proposal last November that set out rules designed to improve the collection and sharing of data from hosts and the online platforms themselves. At the same time, the Commission is also intent on tackling illegal listings that contribute to divergent approaches when it comes to enforcing regulations at a local and national scale across the continent.

The proposal, which was put forward after an initial public consultation period on short-term rental services closed 11 months earlier, is likely to be seen as a middle ground in placating booking platforms and benefitting tourists and hosts, as well as cities across the bloc of 27 countries that have long called for stricter regulations of such platforms due to reports of anti-social guest behaviour and a perceived squeezing of affordable housing supply in certain communities.

In March 2020, the European Commission [and Eurostat – the statistical agency of the EU] stuck a landmark partnership with the four private collaborative economy platforms [Airbnb, Booking.com, Expedia Group, TripAdvisor], which gave public authorities in Europe access to independently published data on short-term rentals on the aforementioned platforms.

Since the announcement last year that the Commission had adopted the proposal for regulation, which will complement the existing Digital Services Act and rules of the Directive on administrative cooperation in the field of taxation [DAC7], the proposal and its scope have had to be discussed by the European Parliament and the EU council [the latter which adopted its position in February]. All 27 member states were granted a two-year period to establish the necessary mechanisms for data exchanges.

Speaking on last week’s STRz webinar on ‘Leading on advocacy round table: Why your industry needs you’, Viktorija Molnar, acting secretary general of the European Holiday Home Association [EHHA], said that she expected the relevant institutions to pass the new regulations into EU law by December.

So far this year, online travel agencies [OTAs] have failed to meet the thresholds to be considered digital ‘gatekeepers’ under the European Digital Markets Act [DMA], which are described as large companies that are an access point for consumers and are able to use their market position and power in a way that impacts other markets.

To meet the necessary thresholds to be considered a ‘gatekeeper’, companies must fulfil three main cumulative criteria, including: generating an annual turnover of €7.5 billion or more in the past three financial years; having more than 45 million monthly active users established or located in the European Union; and having over 10,000 annual business users established in the EU over the last financial year.

The first six companies to be designated as EU ‘digital gatekeepers’ under the DMA are: Alphabet [the parent company of Google]; Amazon; Apple; ByteDance [the parent company of TikTok]; Meta [the parent company of Facebook]; and Microsoft.

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