Img source: vacation.rentals

Foreign Policy On Vacation Rentals Changing Worldwide

in Business/Travel by

Across the globe, vacation rentals have become a new way to stay overseas. Hotels are struggling to keep up with the massive influx of houses and apartments available for rent in beachside areas, small towns to big cities.

With the popularity of vacation rentals superseding the predictions of the travel and industries bigwigs has come plenty of lobbying from hotels negatively affected by vacation rentals. The lobby groups are likely funded by the many hotel chains out there that have seen declines in their occupancy rates. There has already been headline news of anti-vacation rental lobby groups.

As vacationers choose to fend for themselves in short term lease holiday homes that do not include service fees, room service, and so on, the cost of accommodation when booking a vacation overseas has been considerably reduced. This leaves the hotels in a sticky situation because reducing their current operating costs means laying off staff and cutting down on some of the luxuries the hotels were once able to offer.

The situation has seen profits for hotels plummet in popular tourist and city destinations. Even luxury hotels like the Hilton are being affected as high earners opt to rent large houses with swimming pools and high-end amenities. It seems vacation rentals are not just attracting the patronage of budget travelers, but have become popular for mid to high-end travelers.

Img source: historickeywestvacationrentals.com

The Law Is Clamping Down On Free Running Vacation Rentals

Airbnb is one of the main websites out there contributing to the rise of short-term rentals. However, the attention the tech startup has brought itself has meant the firm has made many enemies within the travel and leisure industry.

In a report by the New York Times, there have been revelations on how the hotel industry plans to combat Airbnb. These types of campaigns against websites like Airbnb have been working as lobby groups bring some of the negative aspects of short term rentals to the attention of local government agencies.

Taxation Issues: In the beginning when the vacation rental websites first began to make their mark within the travel industry’s accommodation sector, owners of properties in most countries around the world had free reign of the money they were earning. There are quite a few instances in which people were not paying tax. More recently many governments have started to bring in new tax laws with some countries backdating the tax.

Operating Licenses: Hotels and other companies that operate within the vacation industry are usually governed by strict rules and regs. In the EU, USA, Australia, and New Zealand there are very strict health and safety regulations for example. Many of the vacation rental owners within these constituencies are not covered by the laws or simply cannot be regulated because organizations in place to check that rules and regs are being adhered to do not have the resources to do so.

Img source: asia-exploretravel.com

As a result, the answer has been to force those renting their property for short term leases using sites such as Airbnb now need a license. See the new Japanese vacation rental laws introduced here.

Operating without a license can result in a hefty fine plus the issue of tax evasion may also be raised. Most websites will not allow a property owner to list their rental without a license, but there are some that are still easy for unscrupulous owners that get around these checks.

Are The Hotel Lobby Groups Winning?

There are always new laws being introduced in regards to the vacation rental business. None of them are quelling the growth of this sector. It must be said that the hotels are fighting a losing battle. As with most industries, the vacation rental platforms are doing their best to help property owners bring their accommodations in line with any new laws introduced in the country their house or apartment resides.

This makes perfect sense because the success of vacation rental websites depends on the abundance of vacation rentals available. Therefore, investing in teams that keep an eye on local laws across the globe allows vacation rental websites to inform their clientele of any new laws they need to prepare for. For instance, check out the Lodgify Vacation Rental Resources page.

Information about new laws and regs being passed on by vacation rental websites, like Lodgify, reduces the percentage of properties that become illegible for vacation rentals due to new laws and keep business rolling on strong.

Img source: kohphangan.org

It is obvious vacation rentals are here to stay. There is just too much money in this industry for it to simply disappear. No amount of lobbying is going to help the hotels because the vacation rental companies will just continue to adapt to keep on getting their slice of the accommodation sector’s market share.

If you are a vacation rental owner, and you need regular advice on how to keep your vacation rental up to date with the law as well as how to market it to gain a higher income, then there are plenty of websites out there offering good information.



Peter is a freelance writer with more than eight years of experience covering topics in politics. He was one of the guys that were here when the foreignpolicyi.org started.

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