The holiday rentals sector in Mallorca, sometimes blamed for the ever-increasing prices for long-term residential renting, insists that the increase has nothing to do with its activity and far less when it comes to the luxury market and the market is certainly not easing, in fact, it is growing, leading to greater tension.
For example, the Residents Association of a Palma neighbourhood is calling on residents to tell on their neighbours if they are renting out their homes illegally to tourists. The Pere Garau area of Palma, just outside the city centre, only has a single home which can be rented out to tourists because its paperwork is in order and it has received the blessing of the Council of Mallorca tourism department.
Some Mallorcan residents are resorting to living in caravans parked in makeshift camps as they are priced out of the housing market by landlords preferring to rent to tourists. The trend has led to protests in the island as well as in Spain’s most visited city of Barcelona and other locations.
And Europe’s boom in short-term tourism rentals shows no signs of cooling, with the number of nights booked on leading online platforms jumping 28.3% in the first quarter of 2024 from a year earlier, the EU’s statistics office said on Monday.
The Eurostat statistics, which compile booking data from Airbnb, Booking.com, Expedia Group and TripAdvisor, showed tourists in the European Union spent a total of 123.7 million nights in such accommodation during the period. January, February and March all clocked record numbers of bookings for each of those months, and registered double-digit growth for the third year in a row, showed the data, which excludes hotels and campsites.
Europe’s short-term rental boom has prompted tourism hotspots such as Spain’s Canary Islands, Lisbon and Berlin to announce restrictions on such lets, which many local residents blame for causing housing shortages and driving up prices. In Spain, which ranks among the top-three most visited countries in the world, protests were held in Barcelona and Mallorca earlier this month, and the Catalan city has pledged to ban short-term lets by 2028.
Other places have sought to regulate the fast-growing sector. In France, Finance Minister Bruno Le Maire said last year his ministry was working on plans to close a tax loophole benefitting short-term furnished rentals, while Italy laid out plans to hike taxes for those renting multiple flats.
According to a report released in May by the European Travel Commission (ETC), occupancy rates in short-term rentals fell 3 percentage points in the first quarter of 2024 year-on-year.
Occupancy rates have started to fall as the supply of new short-term rentals entering the market outpaces growing demand. Big one-off events - including the Paris Olympics - have had a big impact on the market for short-term rentals this year, the ETC report said. Another was the European leg of Taylor Swift’s eras tour. In Warsaw, the price for short-term rental bookings in August, when the singer’s concerts will take place, is more than twice the average for the year, the report found.