Short-term rentals becoming stronger and more profitable: the Italian case
In the past few years, we observed how the sharing economy applied to the short-term rentals has been developing, and often facing different Countries’ regulations.
As we have already reported, last year a new legislative context was finally being defined, at least in some European Countries. In Italy, for example, the Government approved the so-called “Airbnb Tax”, including the application of a 21% flat-rate income tax for short-term rental companies, both online and offline. However, in Italy (75%), Germany (68%), Spain (59,1%) and France (50%), respondents to the last European Commission’s targeted consultation which included the accommodation service providers in the sharing economy thought that national rules are rather complicated and difficult to understand, especially when it comes to tax rules.
However, it seems that legislative uncertainty is not affecting that much the Italian short-term market. “Short-term rentals are an unstoppable phenomenon, not just for economic reasons, but because it meets specific sociological needs that characterise our modern society” Stefano Bettanin, President of Property Managers Italia and CEO of Rentopolis reports to Twissen “some people are now talking about a new figure, the so-called temporary citizen, who periodically travels and generates induced profits in every place where he or she goes”.
Recently, Halldis S.p.A., Italian company which manages short-term rentals on behalf of the owners, published a study called “Observatory on the short-term rentals in Italy”. The report analyses five Italian Cities (Milan, Rome, Florence, Bologna and Venice) and 980 properties, and is focalized on the Average Daily Price (ADP), the so-called booking window (the period of time between the booking and the arrival date) and the average stay length regarding the short-term rentals under 30 days of stay.
The report reveals that Venice is the most expensive city, with an average daily price of about 273 euros, while the longer average stay lengths are registered in Rome (8,1 days) and the shortest in Venice (2 days). Florence has the longest booking window, more than 84 days between the booking and the arrival date, while Milan has the shortest, with about 33 days before the arrival. Anyway, the short-term rentals sector is growing in every city except for Venice (-8%): Milan registered a +1,5% yoy, Rome +2%, Florence +11% and Bologna +12%.
According to Vincenzo Cella, Managing Director of Halldis, the average gross income of each property made available for short-term rentals is about 16.000 euros per year and, in the biggest cities, this can double or triple. In Milan, for example, the gross profit may be about 25.000 euros, 18.000 in Florence, 30.000 in Venice.
“Today travelers are not looking for a place to sleep, but for experiences” – Bettanin reports – “I offer an experience in a territory, maybe in a smaller centre where the mass tourism is not a fact, and travellers are interested in the chance of living this experience and at the same time choose what is most convenient and within reach, starting from a short-term rent. Not only the intermediary or the owner of the property benefit from this, but the whole social and economic structure where the experience I proposed is located”.
At Twissen we observed that short-term rentals, although facing different legislations and taxation systems, are growing at a fast pace. In Italy, the main cities are registering an important growth yoy, proving that this typology of accommodation is becoming popular and is perceived as more and more reliable. Landlords can find in that sector growing business opportunities.