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EU Summer 2023: A Bright Outlook and New Regulations
Record-Breaking Start: Summer 2023 commenced with a bang, witnessing a 32.8% increase in the number of nights stayed in short-term rentals compared to 2019 and a notable 22.6% growth compared to the previous year.
Rising Regulations: While the short-term rental market thrives, cities like Vienna, Florence, and Paris have tightened restrictions on hosts, aiming to manage rapid industry growth. In Paris, hosts must now register and face limitations on the number of days they can rent their primary residences.
Events Driving Demand: Cultural, sporting, and music events significantly impact bookings, with events like the Rugby World Cup and Beyoncé's Renaissance World Tour leading to increased demand for accommodations. Monitoring upcoming events is vital to anticipate shifts in demand.
Changing Travel Patterns: Europe's travel patterns have evolved, with domestic travel accounting for 45% of trips in the first quarter of 2023. North American travellers contribute significantly to foreign travel in Europe.
As we delve into the heart of summer 2023, the European short-term rental (STR) market is experiencing a renaissance like no other. With positive trends shaping the industry and new regulations emerging, it's an exciting time for both travellers and property owners across Europe.
Summer Kick-off: A Record-Breaking Start
The summer season took off with a bang this year, setting the stage for an extraordinary period for short-term rentals. According to data, May saw a staggering 32.8% increase in the number of nights stayed in STRs compared to 2019, showcasing the robust nature of this thriving market.
When compared to the previous year, the growth during 3 summer months was an impressive 22.6%. This exponential rise in demand was celebrated across Europe, demonstrating the continent's appeal as a prime vacation destination.
KeyNest’s remote check-in data shows a triple-digit growth in short-term rental activities in major cities in Europe:
Germany: KeyNest key movements, June-August 2022-2023
Portugal: KeyNest key movements, June-August 2022-2023
Rising Regulations in Major Cities
While the STR market is flourishing, several cities are introducing stricter regulations to manage the rapid growth of these rentals. Vienna, Austria, is the latest city to tighten restrictions on hosts.
Earlier this year, Florence, Italy, made headlines by banning new Airbnb listings and other short-term holiday rentals in its historic city centre. The country is even contemplating nationwide rules to rein in the industry.
In Paris, hosts seeking to rent their primary residences on platforms like Airbnb now need to register with the local town hall and are limited to renting for a maximum of 120 days a year. For rentals exceeding 120 days or for second homes, they must officially convert their properties into furnished tourist accommodations, with the city maintaining a dedicated unit to track and fine illegal rentals.
Other Italian cities like Rome, Venice, and Milan are also in discussions regarding introducing similar restrictions.
Europe Takes the Lead in Hospitality Resurgence
On a broader scale, Europe is emerging as the frontrunner in the global hospitality resurgence. According to Amadeus Demand360 data, Europe has surpassed the United States in occupancy for the first time in 2023.
As we look forward to the final quarter of the year, Europe is leading the pack, with on-the-books reservations already 20% ahead of the worldwide average. Key cultural destinations like Florence, Rome, and Athens have enjoyed robust occupancy rates throughout the summer, with further growth anticipated as the cooler months approach.
Spain: KeyNest key movements, June-August 2022-2023
Supply and Demand Dynamics
The supply and demand dynamics within the STR market across Europe are diverse. Some countries, including the Czech Republic, Denmark, Ireland, Hungary, the Netherlands, and Croatia, have yet to return to pre-pandemic demand levels, which has subsequently affected supply.
Conversely, Spain, Portugal, and Italy have witnessed demand levels that are 20-35% higher than in 2019. However, available listings remain slightly below pre-pandemic levels, driving occupancy growth.
Seven European countries have surpassed 2019 demand levels and are facing supply shortages. Greece, in particular, stands out with demand growth nearly five times higher than supply growth since 2019. France follows closely, with three times more demand growth than supply growth during the same period.
Events Driving Demand
One of the most captivating revelations lies in the influence of cultural, sporting, and music events in stimulating booking activity. For instance, hosting major events like the Rugby World Cup in France, which saw a notable 5% rise in bookings in Paris and Nice compared to the same period in 2022, alongside a remarkable 7% surge in Marseille, underlining the heightened demand for accommodations during the event.
Additionally, high-profile music tours like Beyoncé's Renaissance World Tour have similarly generated substantial spikes in demand for lodgings. This underscores the significance of closely monitoring upcoming events to anticipate fluctuations in demand.
France: KeyNest key movements, June-August 2022-2023
Changing Travel Patterns
Travel patterns in Europe have evolved, with domestic travel accounting for about 45% of trips in the first quarter of 2023. Cross-border travel among European countries has made up another 35%, reflecting the preference for smaller towns and rural locations.
North American travellers have constituted a significant portion of foreign travellers to Europe.
While new regulations are emerging in various cities to manage the STR market, it's clear that the industry is experiencing robust growth, and travellers continue to seek unique experiences and accommodations across the continent.
Europe remains a top destination for tourists, offering a diverse range of cultural, culinary, and historical experiences, alongside the convenience of short-term rentals.
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