Ever since Airbnb was founded in August 2008, short-term rentals (STR) have grown to become a significant part of the global tourism landscape. John Park, from Airbnb, outlines how the platform plays a key role in tourism development, offering economic benefits, influencing government policies through data and contributing to community-led skills development.

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Making An Economic Contribution

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In many communities, especially those with limited hotel options, short-term rentals offer a vital accommodation option for visitors. Airbnb has recorded over 7 million visits in communities in the UK where no hotels exist, showing the demand for this type of accommodation. This allows tourism to extend beyond the traditional areas and into more rural locations, all with stories to tell. To put this into context, 55% of the total number of bookings at Airbnb's European properties in 2023 were in rural locations. This provides income not only to hosts, but also has a multiplier effect that benefits local businesses, such as restaurants and shops. As such, short-term rentals can be particularly important in supporting fragile rural economies.

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Airbnb's focus on supporting the rural economy is augmented through investments in creating fulfilment opportunities that encourage travellers to stay at heritage properties. In Ireland, Airbnb has partnered with the Historic Houses of Ireland to provide €5,000 grants for property owners to restore their accommodation, enabling guests to be welcomed at these countryside locations. Similarly, partnerships with English Heritage, with a £1.25 million donation from Airbnb, and other heritage associations across Europe help to ensure that travellers are provided with options to explore entire countries. As such, opportunities for tourism enablement are actively being created outside the main hotspots in communities where the value of tourism will be more noticeably felt. Collectively, over 2.5 million nights were booked at more than 52,000 European heritage properties in the year following the launch of Airbnb’s Historical Homes category in May 2022. This has earned such properties over €320 million, with the average landlord receiving €5,700 in additional revenue across the year.

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Airbnb also works with DMOs to help provide flexible accommodation capacity during major events, as was seen with COP26 in Glasgow at the end of 2021, the 2022 Commonwealth Games in Birmingham and Eurovision 2023 in Liverpool. Airbnb has even partnered with the International Olympic Committee, working with over one million hosts across 5 hosts for the Summer and Winter Olympic Games. Despite such large-scale events leading to a surge in visitors, short-term rentals help to meet this demand, with visitors often staying in surrounding locations and extending an event's impact to areas outside city centres. Notably, during COP26 in Glasgow there were over 70,000 nights booked, at a time when there was lingering uncertainty due to the COVID-19 pandemic affecting the operations of many businesses in the hospitality sector.

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Through this dual role, Airbnb has made a significant contribution to the UK's economy. Research from Ernst and Young found that the platform supported £5.7 billion in Gross Value Added and over 75,000 jobs in 2023. For individual hosts, the average annual income from Airbnb was around £5,500 per year, which can be essential for helping to make ends meet, especially during the current cost of living crisis. In fact, 40% of British Airbnb hosts say that this extra income is crucial for enabling them to continue to afford their home.

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While there is a coordinated campaign against the short-term rentals sector in many popular destinations across the world due to the perceived reallocation effect on prices from switching long-term lets to short-term accommodation, with cities around the world announcing plans to phase out short-term rentals or banning the issuing of new licenses, commercial short-term rentals account for less than 0.5% of the housing stock across major European cities. Research has found only a minor relationship between the presence of short-term rentals and housing prices in both the UK and Europe. Instead, inflation is the key driver of this upwards trend. However, impacts may be observed at a more granular neighbourhood-specific level, requiring a commitment to data-driven decisions and targeted policymaking that balances judgement about the tradeoffs between the value and impact of tourism on destinations and local livelihoods.

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Airbnb sees itself as a partner to policymakers, aiming to be accountable and work collaboratively with local and national governments. Following this belief, Airbnb provides data to governments, helping them understand the full impact of short-term rentals on communities. This is demonstrated by their data-sharing agreement with the Office for National Statistics in the UK, alongside Booking.com and Expedia, to help shape government policy. Airbnb also shares limited transaction data with HMRC and enables hosts to understand their tax obligations through the Airbnb UK Tax Hub.

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Data-Driven Policy Making

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Facing the brunt of such a highly contentious issue, Airbnb has been proactive in calling for evidence-based regulation within the short-term rental sector since 2019. Although, tourism is not at the forefront of the British or Irish governments' agenda, putting both countries considerably behind other destinations in making policy decisions around short-term rentals.

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In its 2021 whitepaper, following extensive community consultations, Airbnb called for the introduction of a national registration scheme for short-term rentals in the UK. This has now received political backing, with a public consultation finding that 61% of respondents favour a mandatory registration scheme across the whole country, with 28% preferring an opt-in scheme for local authorities to join based on a nationally stipulated framework. 11% selected the more flexible option of reviewing the impact of an opt-in scheme before deciding whether to roll it out as a mandatory national scheme. Such a platform would enable the government to make decisions based on the concentration of short-term rental listings in specific areas. While regulations are not yet implemented in the UK and Ireland, Airbnb has voluntarily implemented measures in some cities, such as a cap on short-term rentals in London, introduced in January 2017, where properties are automatically removed from the platform once they reach the 90-night threshold.

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On the other hand, with the rise of remote working following the COVID-19 pandemic, the concept of digital nomads has emerged as a significant trend, reflecting changes in how people work and travel. This is becoming more common among the self-employed and those with lifestyle businesses. In places such as Ireland, the regulations make longer-term lets easier, encouraging digital nomads to stay in one place for an extended period. Recognising its enormous potential, many countries have even launched new visa categories to attract these visitors. Although businesses are still exploring the best model for adapting to this new way of working, the trend is expected to continue as more people choose a flexible work and travel lifestyle. This development provides an opportunity to revisit how tourism and hospitality are delivered and to ensure that suitable accommodation is available to suit this growing demographic. As a sharing economy platform, Airbnb acts as an enabler, creating income streams that will multiply into a wider economic benefit and create the basis for cultural exchanges and personal development.

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Supporting Skills Development

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While many European countries place significant importance on tourism as a viable and valuable long-term career pathway with diverse opportunities, rather than just a seasonal and transient job. This perspective contrasts with how tourism careers are undervalued in other countries such as the UK. At the same time, skills development is a core government ambition for sustainable economic growth and community empowerment.

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By promoting skills development in this sector, governments can encourage individuals to see tourism as a stable and rewarding career and build long-term careers in the sector. Bridging current skills gaps, this highlights the importance of fostering a commitment to professionalising the industry. Such a priority is especially significant given that tourism offers opportunities that are geographically widespread, unlike other sectors that are often concentrated in specific locations. Therefore, investing in skills development can have a broad impact on regional economies, promoting more equitable economic development and combatting the depopulation of younger generations away from rural areas.

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However, while skills development is crucial to tourism's ongoing development, many small businesses do not have the resources to provide comprehensive training programmes, requiring more flexibility and support to ensure they can access funding. Government intervention needs to consider the specificities of individual sectors and the realities of the individuals who own and manage these small businesses, often lacking the luxury of separate departments to manage different functions. Yet, despite such additional constraints, these businesses often struggle to access the same funding as larger organisations, making it even more important that governments work in a focused manner to ensure support systems are accessible. This should enable apprentices to develop vital soft skills, such as personal and communication skills, that are crucial for success in the tourism and hospitality sector, and are valuable for any career. As such, apprenticeships and training opportunities for the next generation of tourism leaders will flourish.

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In line with this perspective, Airbnb is supporting community development. Launching a pilot project in partnership with the London borough of Waltham Forest, Airbnb aims to bring hosts onto the platform that reflects the diversity of the area. With hosts as the best storytellers for a destination, the ambition is to ensure that visitors are meeting local people and experiencing the community firsthand. With many hosts involved in their own creative projects or lifestyle business, the platform also enables them to bring in extra income while also authentically showcasing their community and local experiences. These local hosts are also strong advocates who engage with policymakers at a local level to champion ongoing community development initiatives.

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At a larger scale, the Airbnb Entrepreneurship Academy provides training across the world, helping non-traditional hosts maximise their experience on the platform. Through a combination of in-person training and online webinars, individuals are taught not only the technical skills related to hosting, but also the soft skills, such as customer service and communication, which are essential for providing positive experiences. Delivering training with the support of local partners, including various DMOs, the academy fosters a community of hosts, where they can support each other and share knowledge.

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Adopting such a user-centric approach to skills development, Airbnb tailors its resources to guide and educate hosts based on insights about what works in their area and provides a positive space for peer-to-peer learning. Such training is an ever-present need, with the world constantly in a state of flux and new challenges emerging. By placing a strong focus on developing skills as an industry we can all try to stay ahead of developments and quickly respond to the evolving business and political landscape.