Czech Republic Economy News Politics

Prague wants to strengthen regulation of Airbnb rentals

In the latest example of the Czech authorities’ efforts to regulate companies of the so-called “shared economy”, Prague’s municipal councillors are considering stepping up the rules and obligations applying to collaborative accommodation platforms like Airbnb, reports local media.

Prague moves to strengthen Airbnb regulation

The document, which should be discussed today by the municipal council of the Czech capital, outlines several measures that could be applied to Airbnb hosts, including the obligation to provide information on their guests to public authorities and the possibility to legislate by local decree on the matter.

The debate over whether stricter rules should be applied to Airbnb has been raging for many years in the Czech Republic, as in many other European countries. It has, however, intensified lately, mainly due to the ever-increasing success of Airbnb rentals in Prague and other Czech cities, and growing complaints by traditional hotel owners, who saw their occupancy rate decrease year-on-year by nearly 5% in July. Last year, more than 1 million inbound visitors used the San Francisco-based shared platform to find accommodation during their stay, a 50% growth compared to 2016.

Municipal counselors of Prague’s first district (the old town and historical centre) recently launched a petition urging authorities to strengthen their legal arsenal on the matter, voicing the concern of the traditional hospitality sector, which has long been crying foul over that alleged unfair competition, and arguing that such platforms are only accelerating the depopulation of entire neighbourhoods and districts.

Tax and financial regulations already exist

Prague 1 alone concentrates between 3.500 and 5.000 of the overall 11.000 hosts registered on Airbnb in the Czech Republic. And according to the city council, less than 500 of them pay the taxes they are supposed to. Last June, local daily Hospodarske Noviny reported that the Czech tax administration had compiled data of Airbnb hosts going back to 2015, and had started looking into whether they’ve complied with their fiscal obligations – although questions remain over how they had access to this data.

Whereas other giants of the shared economy, including Uber, have reached an agreement with local authorities to give them information about their users, no such agreement has, for now, been struck with Airbnb. A number of regulations are however already in place: Prague’s municipal authorities can, for instance, charge Airbnb hosts a fee of up to 500.000 Kc for failing to register with their local tax office. But financial regulation is only one aspect, and some are calling for a more global and comprehensive approach to address the demographic, urban and social challenges entailed by such collaborative platforms.

Airbnb begs to differ

Although assuring local authorities of its goodwill and desire to cooperate, Airbnb rejects that narrative. Interviewed by local media a few months ago to address these critics, Airbnb head of policy research Anita Roth refuted the allegations that Airbnb had a negative impact on Prague’s urban development and tourism industry.

“Around one tenth of the hosts are people over the age of 60, who are retired and have free accommodation space to offer. Renting out the space allows them to continue living in the city centre and pay their bills. The fastest growing Airbnb community in the region consists of women over 60 years of age.” Moreover, relying on data from the company’s report on Airbnb’s presence in the Visegrad Four countries (Czech Republic, Slovakia, Hungary and Poland), she argued that 80% of guests stay outside of Prague 1.

The typical Czech Airbnb host rents, on average, his or her apartment/room 37 nights a year and earns slightly more than 2.000 euros during that time. In other words, most of the hosts continue to live full-time in the flats they’re temporarily renting out: Airbnb shouldn’t be blamed for accelerating depopulation, Ms. Roth claimed, but simply makes housing more affordable, including in the city centre, by providing extra cash to local residents.

Nearly 6 million Airbnb guests in Central Europe since 2013

Founded in 2008 in the United States, Airbnb offers accommodation in 81.000 cities located in 191 countries in the world, according to their official website. Launched in the Czech Republic in 2009, it is the leading shared accommodation service, far outranking other platforms available on the market such as Flipkey, HomeAway, House Trip, Vacation Rentals and Vrbo.

Its popularity in Central Europe (Czech Republic, Hungary, Poland and Slovakia) has been growing at an incredible pace: last year, 2.7 inbound travelers used the platform to find an accommodation, compared to 150.000 in 2013, among more than 35.000 registered hosts. Almost three-quarters of those travelers came from Europe, and 500.000 were themselves citizens of Central European countries.

1 comment on “Prague wants to strengthen regulation of Airbnb rentals

  1. I used to assist an Airbnb host back in Japan, seemed to me like Airbnb listing in Prague and those of Japan (especially the ones in Osaka city, which I was assigned for ) have been dealing with a different issue.
    One of the Airbnb hosts in Japan were dealing with is that some sort of mentality issue; the neighbours around the Airbnb room do not like tourists coming and going on a daily basis. They don’t like to see different people (tourists are only there for a few days/weeks) pass through the area they live in. You could say they are very shy to strangers. Probably they are not confident to speak to travellers which might not know Japanese. This is not an issue in Prague where most of people speak English.
    However, the Japan government also takes into account that the traditional hotels and inns should be protected from the advancement of Airbnb, so the govt had enforced the law where Airbnb listings without proper hotel licenses will be persecuted. To obtain the license, hosts must need a lot of commitments (e.g. paperwork, the countless govt visit to the listings to carry out inspections). Airbnb closed some Japan listings deemed to be operating without a valid license. I wonder how Prague hosts start their Airbnb …

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: