A study shows the influence of Airbnb on the supply of homes for rent in Barcelona

A team of researchers from the Universitat Oberta de Catalunya (UOC) has carried out a detailed multidimensional study into how the Airbnb platform works in Barcelona, its strategies for adapting, and the impact it has had on the city's socioeconomic and tourism structures. The research also examines the links between the tourist accommodation platform and the housing market in the Catalan capital. It was led by Soledad Morales, who is a member of the Faculty of Economics and Business and the NOUTUR research group, which examines new perspectives in tourism and leisure.

The study, published in the Journal of Hospitality and Tourism Management, analyses the impact at various levels. First, it examines the behaviour of hosts who remained on the platform without interruption from 2016 to 2022 (surviving hosts), including, therefore, the period of the Covid pandemic, when the travel and tourism sector suffered extreme stress. The analysis also takes into account different host profiles, examining their characteristics and differences according to the number of homes they offer on the platform. The third dimension of the study is geographical, examining differences in behaviour, strategies and effects on the housing market in different districts of the city.

"We carried out a three-dimensional study, generating a great deal of information about the platform and giving us plenty of scope for analysis. Without a doubt, it is one of the most complete studies done into how Airbnb behaves in Barcelona and its strategies for adapting to changes in demand," said Morales, who is the director of the university master's degree in Sustainable Tourism and ICT. She explained that a new, highly advanced quantitative methodology was developed for the study, using neural network systems, and machine learning and big data technologies. This system could be applied to other cities or regions in the future, furthering comparative studies.

Once all the data were collected, the researchers were able to gauge the importance of each of the many variables affecting the tourism sector. Key findings included establishing a direct correlation between how the platform behaves and its impact on the housing market in Barcelona. They also described the strategies adopted by owners to manage the stress on the tourism sector caused by Covid, strategies that ultimately allowed Airbnb to emerge stronger despite the crisis.

Adapting to the pandemic

The study reveals the importance of the "minimum nights" setting, active price management and professionalization as adaptive strategies for the platform, along with the transfer of accommodation to the medium- and long-term residential rental market.

The pandemic encouraged individual owners to adopt the dynamic pricing strategies that were previously only practiced by more professional hosts and the owners of higher-end homes. In 2020, for example, hosts focused on reducing prices to attract domestic tourists keen to travel after the strict lockdown.

The results also indicate that, although the professional managers of tourist apartments were the hardest hit by the economic consequences of Covid, they also benefited the most from the business generated when tourism in the city recovered. During the pandemic, professional hosts reduced their prices more than individual owners did, although the average rate they charged was still higher.

Setting a minimum stay requirement also boosted profitability and, therefore, survival rates. The proportion of professional hosts who manage multiple properties on Airbnb is a significant factor in this respect: they represented over a third of the tourist accommodation that remained available on the platform without interruption from 2016 to 2022.

During the pandemic, rental prices fell throughout the city, but they dropped most steeply in neighbourhoods where tourism is a bigger factor in the economy. These falling rents and greater availability of accommodation boosted demand for residential uses in the most central districts, and this was the second strategy adopted by owners to survive the pandemic. In the period studied (2016-2022), only 16% of the apartments remained on the platform at all times. This gives an idea of the extent to which property owners stuck with the tourist rental market compared to other uses such as long-term residential rentals.

"Our study shows how Airbnb influences the city's housing market. In fact, one of the strategies we detected to adapt to the Covid crisis, with international tourism disappearing and the domestic market severely restricted, was the transfer of stocks to the medium- and long-term housing market," explained Morales. "Our system clearly detects this trend, but it is difficult to quantify given the complexity of the factors involved in the housing market and the lack of open data."

Is a ban likely?

"This study offers the authorities a new approach to understanding how a platform such as Airbnb acts, its adaptation strategies and its relationship with the urban housing market, how it affects rental prices and adds to the pressure tourism places on the city's main attractions," said Morales. The research was published shortly after Barcelona City Council announced plans to revoke the licences of the more than 10,000 tourist apartments in the city and eradicate the practice by 2030.

Morales believes that this measure "reflects what cities like New York are doing, but we will have to see how it pans out, because it will undoubtedly be a long and tense process for the city's tourism sector." She recommends taking a much broader view of the problem. Tourism shouldn't be demonized as the sole source of the city's residential problems, and other measures are needed to manage the housing market. "We need a serious debate about what model the city wants and needs, with tourism treated as a cross-cutting factor in the economy of a complex city with an international scale and scope."

This research, funded by the Spanish Ministry of Science, Innovation and Universities and the State Research Agency through the EPTUR project, with the participation of the UOC, contributes the UN Sustainable Development Goals (SDGs), specifically number 11, Sustainable Cities and Communities.

Reference article

Soledad Morales-Pérez, Antoni Meseguer-Artola, Lluís Alfons Garay-Tamajón, Josep Lladós-Masllorens, Inside Airbnb's performance and adaptive strategies in Barcelona using artificial neural networks: A longitudinal, spatial, and multi-host perspective, Journal of Hospitality and Tourism Management, Volume 59, 2024, Pages 238-250, ISSN 1447-6770: https://doi.org/10.1016/j.jhtm.2024.04.010

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