New in the Hotel Business

Nowadays, news related to hotel business remind war reports.

The well-known online magazine Skift has published an interesting article in December 2019, stating that the struggle between hotels and short-term rentals became not just one-way problem but rather a mutual flow. As a consequence, hotel brands started to rent housing, while short-term rental companies started to buy hotels.

An interesting figure is given by the Marriott chain of hotels, which claims that 27% of its customers went for short-term leases in 2017-2018.

From our viewpoint, this article does not cover another problem of the short-term rental market. Short-term rentals of apartments lead to the increase of the rental prices in a given destination. As the result, local residents get crowded out from their rented living places in popular cities because of rising rents. There are two clear problems appearing because of this. One being that such cities become overcrowded with tourists (overtourism), which has a negative affect on the tourists’ experience. The other problem is that it reduces the level and quality of life of local residents, which leads to their negative perception of the tourists and tourism in general.

Therefore, it is quite possible that local authorities will be on the side of the hotels, as they constantly solve the problems associated with short-term rentals. Specifically, they deal with overtourism issue, discontent of local residents and tax evasion.

Another important factor is the quality of provided services. The advantage is clearly on the side of the hotels. Not a single owner of a short-term rental apartment is able to provide the proper level of service comparable to the professional staff in the hotels.

Up to date, no one can predict how the confrontation will end. We hope that ordinary tourists will only win as the outcome. After all, existence of competition leads to the growth of quality of services.

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