3.4 million tourists who visited Portugal in 2018 were housed in Airbnb accommodations. The US company reports that these visits had an impact on the Portuguese national economy in the order of €2 billion, or the equivalent of 1% of GDP. On average, each of these visitors who booked via Airbnb spent €115 per day. Portugal is among the countries where Airbnb has the most significant economic impact, ranking 10th after the USA ($33,800,000), France ($10,800,000) and Spain ($6,900,000).
The holiday let reservation platform has added “Airbnb Luxe” to its options. The new category makes available luxury accommodations and associated premium services, such as a route planner, chefs and masseurs. The Airbnb Luxe promises offerings to guests that are “the most extraordinary houses in the world”.
Local Lodging operators who opt to be assessed under the tax rules of Category F (long-term rentals) may deduct commissions from this income paid to online reservation platforms. However, those carrying out their tourist business under Category B as Sole Traders do not deduct specific expenses but rather are automatically allotted 65% from their gross “AL” income to cover operating expenses.
Airbnb, the internet Local Lodging reservation platform, collected and delivered €2,600,000 in Municipal Tourist Tax during the first six months of the year, reaching a grand total of €8,100,000 raised on behalf of the Lisbon Council since the tax began in January of 2016. In 2017, the aggregate holiday let levy revenues came to €18,500,00 taken in by the country’s capital city.
The European authorities require Airbnb to make changes to its operations. The company has until the end of August to present solutions. Greater transparency regarding costs and the conditions for cancellation of the accommodation by the owner are among the requirements.
Recent legislative reforms have created tighter rules for operators of Local Lodging establishments. Under the new regulations, Councils will have a say in setting occupancy quotas within their municipalities. Condominiums can launch complaints regarding “AL” based disturbances and misuse in their buildings.
Here are seven newly approved regulations that will impact operators from major investors to individual owners.
- Multi-risk insurance and liability coverage
Local Lodging establishments will need to have multi-risk insurance to cover possible damages due to increased use of the common areas in the building. The new law goes further, holding the “AL” owner mutually accountable for any damage caused by guests to common areas. The absence of insurance coverage will be grounds for cancellation of the “AL” permit.
- “Information Book” with rules and standards in four languages
Also new in 2018, Local Lodgings accommodations are obliged to have an Information Book, available in Portuguese and English as well as in at least two other foreign languages, containing detailed rules about the collection and separation of municipal waste and the operation of household appliances. In addition, the Book should specify the care to be taken to avoid disturbances that might affect neighbours as well as the telephone contact of the operator of the “AL” establishment. The Book should also contain other condominium regulations and practices relevant to housing and common areas.
- “AL” signs
An “AL” identification plaque for Local Lodging becomes mandatory once again in all holiday letting accommodations. In the case of apartments, a small sign should be placed at the entrance. The exact specifications of these signs have as yet to be specified.
- Condominium charges may become more expensive
In apartment buildings, condominiums will be able to approve condo fee supplements of up to 30% for owners engaged in Local Lodging for corresponding expenses resulting from the increased use of common areas. To this end, the condominium must pass regulations stipulating the criteria approved by at least two-thirds of owners.
- Complaints from neighbours may lead to closings
When agreed by more than half of the owners, condominiums will be able to challenge Local Lodgings operators, disapproving acts that disturb the normal use of the building. This opposition shall be referred to the City Council, responsible for the final decision regarding licensing suspension.
- Quotas by Council Parishes
City Councils will be able to create ‘containment zones’ with limits to the installation of new local lodging establishments in areas of greater burden on long-term rental housing. Following a decision by the municipal assembly, local authorities will have one year to create these regulations. They can also adopt preventive measures and suspend “AL” establishments in these containment zones.
- Inform Airbnb when closing an “AL” activity
The holder of a Local Lodging registration must communicate to the Tax Authority the closure of “AL” activity within 10 days after the occurrence. Also, Owners must notify electronic reservation platforms, such as Airbnb or Booking, of the activity change.
The approval of these changes has stirred a whirlwind of controversy as local sentiments have often taken precedence over national interest. With the 2019 Budget looming on the horizon, it appears likely that we have not seen the end to the political seesaw battle surrounding Local Lodging legislation.
Yescapa, an online platform for renting motorhomes, joins more traditional holiday accommodation options. Dubbed the “Airbnb of motorhomes”, Yescapa offers an “on the road again” vacation experience that is different from hotels, local lodging, camping or hostels. The startup began six years ago in France and is now expanding to Portugal at yescapa.pt
Marriott International and Hostmaker announced a collaboration to introduce a new holiday home rental undertaking under Marriott’s Tribute Portfolio Homes brand. This venture marks Marriott’s first step into the home-share market, nine years after Brian Chesky founded Airbnb and disrupted the travel industry. The move comes at a time when Airbnb is attempting to step out of its “alternative travel” image, introducing concepts like Airbnb Plus that offer a more curated travel experience. Meanwhile, other traditional hospitality companies like AccorHotels and Hyatt have also launched similar endeavours.
Danish tax minister, Karsten Lauritzen, announced that the country wants a “sharing economy” to flourish, but on condition that operators pay tax. Denmark will also limit property listings to 70 nights a year. Owners can benefit from a tax-free allowance of up to €5,400 per annum. In addition to tax issues, Airbnb is blamed for pushing up house prices in major cities.
The average annual income per owner of homes placed in Portugal on the Local Lodging network, Airbnb, is higher than in Italy or Spain. Only Japan surpasses the national average, according to a study by the International Monetary Fund (IMF), which sees room for increasing taxes on this type of “digital” business.