- My Holiday Guide Resources
- Posts
- š Are STR restrictions having the desired effect?
š Are STR restrictions having the desired effect?
And what is experience driven travel?
Phil Jackson
November 23, 2024
š Welcome to this weeks newsletter.
As the UK is being battered by storm Bert, this weeks newsletter has a great roundup of interesting, thought provoking information for you to digest whist sat in front of a log fire! šŖµš„
In this weeks edition we cover :
The new STR Index - What is it and why might it be useful
A global view of STR restrictions and housing availability
Is now the time to review the Experiences you offer to guests
And Paddington Bear enthusiasts are upsetting residents in Primrose Hill!
See you next Saturday at 5pm?
Phil
Founder, My Holiday Guide
THE SHORT TERM RENTAL INDEX
Introducing the STR Index
You have probably heard of the Retail Price Index or Consumer Confidence Index that provides a relative scale of the performance of a certain sector.
In the STR sector we have some really useful KPIs such as RevPAR, Average Daily Rates and Occupancy Levels, but not an index that sits above these and provides an overall health status of the sector.
To this end I have created the STR Index.
If youāre interested in finding out more about how this has been created, follow the link below to an article on LinkedIn I have written.
Having read the LinkedIn article, what do you think of this idea? Hit reply and let me know.
IN THE NEWS
Wales 182 Day Review Petition
The 182-day rule in Wales requires self-catering accommodation to be let for at least 182 days in a 12-month period to qualify for business rates instead of council tax. Local council tax premiums can be up to 300% if owners donāt meet the 182 day minimum.
Since its introduction in April 2023, Welsh owners have felt the impact of the rule and the penalties if the 182 day threshold isnāt reached.
PASC have setup a petition with the aim of getting the Welsh Government to complete an Economic Impact Assessment and are encouraging FHL owners in Wales to complete the survey.
Edinburgh STR Restrictions - 1 Year On
There has been many articles released this week looking into the impact of the tighter rules in Edinburgh implemented a year ago.
The broad theme is that they have not had the desired effect of easing the housing crisis and have actually had a number of adverse effects.
Here is a summary of the articles released by Airbnb, Scottish Financial News and Letting Agent Today:
The strict short-term let rules have failed to achieve their intended goal of easing the housing crisis, and have instead led to record-high rents and hotel prices. Rents in Edinburgh have risen by 13.9% in the last year. Airbnb argues that the rules have not improved the affordable housing situation, while simultaneously driving up costs for visitors.
The rules have had a negative impact on tourism and local businesses. The number of Airbnb guests visiting during the 2024 Edinburgh Fringe Festival dropped 13% compared to the previous year. This decline in tourism hurts local businesses who rely on visitor spending.
Families who rely on income from hosting on Airbnb are also negatively affected. About 20% of hosts in Edinburgh work in healthcare, education, or hospitality. Almost 80% of hosts use the income to keep up with living costs, and nearly half rely on it to help afford their homes. The rules make it more difficult and expensive for these families to host, impacting their income and ability to make ends meet.
Airbnb claims that the rules in Edinburgh are overly restrictive and expensive compared to other parts of Scotland. A license for a property that can host six guests in Edinburgh costs five times more for one year than in Glasgow or the Highlands, where licenses last for three years. They call for Edinburgh to ease the rules, lower fees, and extend license durations.
Impact of Short-Term Rental Restrictions on Global Housing Availability
While many cities have implemented restrictions on short-term rentals like Airbnb in an attempt to increase housing availability, the overall impact on housing affordability and availability is still debated.
This article by Investing dot com explores the impact of tighter rules across the globe; drawing from various studies and information sources:
New York City's Local Law 18, which places strict limitations on short-term rentals, led to an 83% decrease in Airbnb listings for stays under 30 nights from July 2023 to July 2024. However, median rents in the city have increased less than 1% since the law's enactment, and one-bedroom rents have reached a record high of $4,500 per month. This suggests that while the law has reduced short-term rentals, it has not significantly eased the housing shortage or lowered rents.
Experts suggest that factors beyond Airbnb contribute to housing affordability challenges. A Harvard Business Review study found that Airbnb's presence only increased annual median rent by $125, a small fraction of the overall increase in housing costs.
In the UK, research by EY found little correlation between the rise in Airbnb listings and increased housing costs. Entire homes listed on Airbnb make up less than 0.7% of total housing in the UK, and most hosts rent their homes for fewer than three days per month. Listings active for more than 90 nights per year represent just 0.17% of the housing stock.
Airbnb argues that the UK's housing shortage is due to a failure to build enough homes to keep pace with demand, not short-term rentals. They also point to data showing that the majority of hosts in the UK list one space and that 40% say the extra income helps them afford their homes.
Overall, the sources indicate that while restrictions on short-term rentals can decrease the number of properties available for short-term stays, their impact on the availability and affordability of long-term housing is less clear and likely influenced by a variety of other factors.
Sustainability in the STR Industry
In this article, Bob Garner, founder and CEO of EnviroRental talks about how property management companies can increase their commitment towards sustainable action. Within the article Bob suggests that property management companies can start small by:
Allocating just 0.1% of their annual profits to sustainability
Each CEO dedicating just one working day of the year to building sustainability in the industry
Each company appointing a sustainability manager to drive change: a specialist who can focus on sustainability, even part-time, within the business and influence their stakeholders to help
You can find other resources on how STR hosts can improve their sustainability on the EnviroRental website.
Dynamic or Surge Pricing Across Different Sectors
This article in the Guardian explores the increasing prevalence of dynamic pricing, also known as surge pricing, across a variety of sectors, including short-term rentals. It suggests that hotels & STR dynamic pricing might become more prevalent and increasingly āreal timeā to factors such as demand, weather, and last-minute bookings.
Visitors & Airbnb Stays at Paddington Bear's House Spark Tensions Among Locals
This article explores the challenges of film tourism, using the example of Chalcot Crescent in London, where residents are frustrated with the influx of tourists visiting the street due to its appearance in the "Paddington" films.
LISTING PERFORMANCE & GROWTH
Tips and strategies to enhance the visibility and attractiveness of your holiday let.
Experience Driven Travel - Time To Review Your Offering?
Did you hear that Airbnb are planning on relaunching their experiences offering in 2025?
Based upon research by McKinsey & Company, travellers are increasingly looking for experiences as part of their stay.
Experiences offered to your guests donāt need to be lavish and expensive but can also be more intimate, lower cost offerings that add value to your guests and provide hosts with the opportunity to increasing profits.
Read our full article to find out how you could expand your offering to guests.
Which of these strategies do you think will most benefit your short-term rental? Hit reply and let me know.
PROPERTIES OF THE NEWSLETTER
We all love looking at and getting inspiration from other properties so hereās our top pick for this edition.
NO FOMO
Missed last weeks newsletter? Hereās one thing you might like.
What Can We Learn From Short-Term Rental Success Stories
In last weeks newsletter we looked at some common themes from 12 successful hosts and property managers.
You can read the full article here:
