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14.11.19 5 NEWS MATTHEW VELLA A study conducted by the Cen- tral Bank of Malta has revealed that there were 8,761 proper- ties listed with AirBnB in May 2019, which could generate – on average – as much as €2,400 a month for their 3,856 hosts. AirBnB, which offers short- term rentals in 81,000 cities in 191 countries, does not publish much information, but a CBM researcher obtained the data from what was actually listed online on this platform in May 2019. e data does not cover oth- er websites and having a single observation means that the results may be affected by sea- sonal availability and pricing. "e impact of these listings is considerable. ey can po- tentially offer as much as eight million nights. Taking the most likely occupancy rate of 70% would lead to an average price of €80.20 per night, generating revenues of €111.1 million," Reuben Ellul, the principal economist in the bank's Eco- nomic Analysis Department, who authored the policy note, said. While, on average, hosts would be able to earn €2,400 a month, the research indicates that the top 10% of hosts would earn around 59.5% of the rev- enues. "is makes the distri- bution skewed, such that many hosts make significantly less than the average estimate, but some earn substantially more," Ellul said. But the study stresses that short-term rental concentra- tions ought to be avoided, as the long-term effects on com- munities and residents may affect the character, ambience, communities' quality of life, as well as neighbourhood res- idential prices and availability of housing. "Policymakers ought to assess and study the implications and benefits of this industry," Ellul said. "Such studies ought to assess if these short-term rental reve- nues are being taxed, how they ought to be taxed – both for income and eco-contribution purposes – as well as whether the revenues generated from such taxation is devolved to- wards authorities tasked with addressing the pressures gen- erated by such rentals, or to- wards the communities and local councils most affected by the short-term phenomenon." Most of the hosts offer whole dwellings for short-term lets, with the bulk being concen- trated around the traditional tourist areas and resort towns, although they also spread into areas like Cottonera, Rabat and other rural areas of Malta and Gozo, which do not typically host tourists. e fact that so many whole dwellings are on offer gives rise to one of the main policy concerns, namely the impact of taking thousands of properties off the long-term housing mar- ket. Research shows that using a significant part of the housing stock for short-term rents is es- timated to increase real house prices by 2.8% in the long-run. "e amount generated for the hosts is comparable with the market rate for the long- term rental of a large property in an area with high demand. And the figures are also based on conservative assumptions as the actual revenues could be much higher, as the study ex- cludes extras such as cleaning and utilities. Taken all together, this makes short-term rentals significantly more lucrative than long-term rental alterna- tives," the Central Bank said. Apart from the impact on house prices, the impact on more traditional forms of ac- commodation such as hotels and guesthouses also has to be looked at. AirBnB hosts offered 36,222 bed places in May 2019, compared with – for example – the 42,927 offered by collec- tive accommodation in August 2017. e 8 million nights that these listings can theoretically offer have to be seen in the con- text of the 10.1 million nights stayed in collective accom- modation in 2018. In the first quarter of 2019, around a third of tourists who stayed in rent- ed accommodation opted for private residences. However, in recent months, collective accommodation es- tablishments experienced a slowdown, and the numbers of nights stayed in collective accommodation actually de- clined somewhat, in spite of overall arrivals growing modestly in the first three months of the year. Over half the AirBnB hosts have three or more listings, and the duration of the avail- ability indicates that many are being run as quasi-commercial operations. e top four hosts control 3.4% of the total listings – one host has 110 listings – al- though this may indicate the use of property management companies. It appears that while AirBnB may serve as a secondary source of income for around a third of hosts, many listings are run by semi-pro- fessional or commercial oper- ators. AirBnB hosts earning up to €2,400 monthly, but affecting Maltese housing prices While, on average, hosts would be able to earn €2,400 a month, the research indicates that the top 10.0% of hosts would earn around 59.5% of the revenues

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