Short-term rentals are one of the most popular alternatives to hotel accommodation, specially given the debate triggered by the new rules of the Ministry of Tourism to regulate the sector. Let's take stock of the situation.
Short-term rentals drive summer 2023
Summer 2023 confirmed the positive trend recorded in the short rental sector in the first part of the year, which in turn reaffirms the recovery that began in 2022. This is according to the findings of Halldis, an Italian short-term rental operator since 1986, which analysed data on more than 1,200 properties including flats, mansions and villas, in more than 120 locations in Italy and Europe, from major cities to the most beautiful seaside, mountain, lake and countryside locations.
According to this analysis, 2023, compared to 2022, shows significant increases of 73% in bookings and 70% in occupied nights. In 2022, both bookings and occupied nights exceeded those of 2021 by 300%, a year that was affected by severe travel restrictions due to the pandemic.
"In 2022," says Halldis CEO Michele Diamantini, "according to data from Real Estate Scenarios, global international tourism has recovered 66% of its pre-pandemic levels: at the end of the year, the number of tourists travelling abroad reached 960 million, more than double the 2021 figure, although still 34% less than in 2019. Europe, the largest destination area, recorded 585 million arrivals, reaching almost 80% of pre-pandemic conditions. Our data show that despite the Covid, the war in Ukraine and the economic situation, people still want to travel and we will soon return to 2019 levels. Short-term rentals will increasingly play their part if they take an innovative approach and funds and financial operators, who were mainly focused on the hotel sector, continue to shift, as is happening, to residential investments. These are long operations, but in two or three years' time, high-end, professional and service-oriented products will come onto the market."
Which tourists choose short-term rental
According to data from Halldis, Italians account for 31.5 per cent of arrivals, while the rest is divided between arrivals from other European countries, which account for over 52 per cent, from North America for 7 per cent and the remainder from other countries. Tourists from Asia and South America are down, those from Russia and the Ukraine almost nil. While in the first part of the year, flows were concentrated on the large cities such as Rome with 21% of arrivals, Milan (12%), Florence (10%) and Venice (8%), during the summer it is the classic holiday destinations that weigh in with 30% of all arrivals, while the mountains account for 18% and the lakes and countryside, especially Tuscany, 12%. What changes over the years is not the average booking duration, which is eight to nine days, but the availability of funds. In fact, while in 2021 the average value of a booking was €976 with a daily cost of €121, in 2022 the former rises to €1,286 and the latter to €145, in 2023 to €1,516 and €180 respectively, an increase of 24% over 2022.
Short-term rentals, new rules 2023
Meanwhile, the debate on the new legislation on short-term rentals continues. The knot to be unravelled with regard to the law on tourist leases envisaged by the Ministry headed by Daniela Santanché is that of the minimum number of nights to be spent in short lets: it seems there will be a step backward under pressure from the sector's operators. Which not all players in the tourism sector liked.
"Our judgement on the proposed law on short-term rentals can only remain suspended, while waiting to know the text that will be deposited in Parliament," says Alessandro Nucara, director general of Federalberghi. "We have recorded positive advances on the subject of the minimum standards that short rental flats must possess, for reasons of safety and conformity with urban planning instruments, on the relative controls and on the adjustment (from four to two flats) of the threshold above which the activity is presumed to be carried out in an entrepreneurial form. On the other hand, we cannot hide our disappointment at the backward step looming on the horizon on the minimum stay, which we continue to consider an essential element of the reform."
"It is curious that the Ministry of Tourism wants to intervene in the limitation of leases, an issue that has been regulated for almost a century by the Civil Code," comments on the other hand the president of Confedilizia, Giorgio Spaziani Testa, who reiterates a number of firm points:
1. The Minister has not yet explained why he wants to restrict short rentals, since he has publicly denied the two reasons given in the draft law prepared by his Ministry on the matter: the existence of the phenomenon of so-called overtourism and the fact that short rentals would cause the depopulation of historic centres.
2. There is already a law- of dubious constitutionality - that imposes the obligation to become an entrepreneur on those who put more than four houses up for short-term rental. A law that in any case does not affect property managers even when they manage 100 houses of 100 different owners. Do you really want to insist on this blatantly wrong path?
3. Should the Ministry's draft be approved, even with the changes that the Minister discussed with hoteliers, short lets would be restricted, but other forms of accommodation in flats such as room rentals, bed and breakfasts and holiday homes would continue undisturbed. What is the logic?"
The Ministry of Tourism responds directly to this note. "With reference to the note issued by the president of Confedilizia, it is appropriate to specify that the proposed law on short-term rentals aims to regulate the phenomenon and not to criminalise it. In fact, the minister specified: "There is an issue on short rentals: it is the Far West, because there is no precise rule, so in our proposal, which I hope will soon go to Parliament, there is first of all the unique identification code (CIN) because now each region has its own identification code and this creates problems. Instead, we want a national identification code, where it will be easy to see how many beds are available, because we cannot allow a tourist to arrive in Italy thinking that he is renting a flat with a certain number of beds, which then proves to be inadequate. We must both protect the tourist and private property, because for us the latter is sacred".
"Short-term rentals," says Vincenzo Cella, general manager of Halldis, "are confirmed as a driving force not only for the first part of the year but also for this summer. In Italy, according to our elaboration of Istat and Scenari immobiliari data, this sector concerns about 600,000 properties for a value, according to the Osservatorio Digitale Politecnico Milano, of about three billion euros. The market appreciates property managers (professional operators, ed.) like us, who manage the home product on behalf of third parties, accounting for about 25 per cent of the total number of short-term rentals, because they guarantee privacy, quality of services, innovative pricing management and product promotion and marketing operations, and of course an income for owners. In this sense, I welcome the proposed regulation of the sector, which must be shared and bring benefits to all parties involved."