Airbnb is Disrupting the Traveling Industry — But Not in a Good Way

“Eurotrips” by American millennial travelers have become almost unimaginable without the crucial role of Airbnb—the world’s largest community-driven hospitality services company. What began as a tech start-up founded by two college roommates in 2008 has grown into a booking and homestay network valued at $30 billion (that’s more than the valuation of the Hyatt Group, one of the world’s largest operators of hotels and resorts). Airbnb is innovative: its business-model, based on people renting out their private property for short periods of time, has disrupted the travel industry and has fundamentally changed the way other key players on the market, like and Expedia, conduct their business. While its benefits include cheap accommodations for travelers and modest profits for property owners, it is now facing an unprecedented backlash in a number of its key destinations.

One of these is Barcelona, a city whose beaches, historic sites, and year-round sun attract millions of tourists annually. This Mediterranean destination is Airbnb’s fourth-largest market, and many of its visitors rely on the company for their accommodation. The year 2016 alone brought some 1.24 million Airbnb bookings to Barcelona, meaning that roughly 15% of the city’s 9 million tourists chose to use the platform. Although that is valuable revenue for the city’s tourism industry, concerns arose. Landowners have increasingly preferred to rent out their properties to the city’s visitors, who end up paying more for apartments than the city’s natives can afford. As a result, large swathes of Barcelona’s historic downtown neighborhoods have effectively been emptied of locals. As property prices soar, people who have been living in the historic center are forced out of their homes and into areas further afield. Protests against pervasive tourism have become commonplace—at a recent rally, locals chanted “Tourists, you are the terrorists.”

City authorities have clamped down on nearly 2,600 listed Airbnb properties in Barcelona. In 2016, the local government passed a controversial law mandating that landowners planning to rent out their apartments for short periods of time must apply for special licenses. By limiting the number of licenses it issues, and by substantially increasing property taxes for vacation apartments, Barcelona has effectively limited the number of Airbnbs available in the city. In 2016, the city fined Airbnb €600,000 ($700,000) for listing unlicensed properties. This followed a €30,000 ($35,000) fine from the year before.

Barcelona hasn’t been the only city taking action against Airbnb. Landowners in Ibiza and Mallorca, Spain’s most visited islands, will be fined up to €40,000 ($47,228) if they continue renting out their properties without proper licenses. Restrictions have been placed on Airbnb properties in Paris, France, too. Owners of apartments can now rent out their properties for a maximum of 120 days a year. Airbnb paid $1.6 million in fines last year in the French capital alone for renting out properties that were not registered with the tax authorities. In Amsterdam, which hosts some 19,000 Airbnb properties, landowners are limited to renting out their apartments for just 60 days per year. From 2019, the number of days will fall to 30.

As Airbnb has grown, it has faced increasing backlash in a number of major cities around the world. The service has made travel affordable and available to millions of its users, but has made life unbearable for the thousands of people that have been forced to make room for the growing behemoth. In the case of Airbnb, the notion that technology improves people’s lives has proved to be a myth. The challenge for the company now is forging a path towards responsible growth through the promotion of sustainable tourism.

Airbnb has made some concrete steps. In April, it launched its Office of Healthy Tourism—an initiative to promote “authentic and sustainable tourism in countries and cities across the world.” It has invested in the opening of landmarks and homestay locations aimed at promoting economic rejuvenation in poor and left-behind rural areas. One such example is The Cedar House in Yoshino, Japan, which was built by Airbnb to serve as a community center for the village’s residents as well as a homestay and tourist magnet for visitors. In May, it released its “Healthy Travels and Healthy Destinations” report, which is a detailed, 41-page analysis of Airbnb’s impact on a range of cities around the world. While mostly a one-sided justification of its practices and firm denial of any wrongdoing, the fact that Airbnb is taking the issue of sustainable tourism seriously is commendable. It’s also necessary; Airbnb’s response to the outcry may very well determine the future of the company. Whether it continues to grow or, like Uber, starts facing bans in the cities it operates, is entirely up to Airbnb’s ability to empathize with those affected by its business.