Madrid Centro has the largest number of tourist lodging houses in the city and the offer of traditional renting is being shaken by this new business model. In Spain, the business of tourist lodging houses has become a controversial issue. We must take into account that each different region in Spain has a different legal situation and hence, the complexity of the matter. Nowadays, a single body of legislation on this subject does not exist and this angers the traditional real estate sector as well as the hotel and catering industry because they consider that tourist lodging houses involve unfair competition. In Spain, this business has mostly grown in Madrid and especially in Madrid Centro. First and foremost, we must point out that a number of requirements must be satisfied and then formalized by the Madrid Town Council. Some time ago, we wrote about this matter. However, many dissenting voices complain about the fact that the requirements are often ignored. Be that as it may, it is undeniable that the number of tourist lodging houses has increased in the centre of Madrid. Let´s look at the facts and figures.
THE AREA OF SOL: A PARADISE OF TOURIST LODGING HOUSES
It is not exaggerated to say that at present, the gigantic Airbnb is gaining ground on the traditional renting business. It is estimated that 1 out of 2 advertisements on the online platform of residential renting in Madrid, are focused on Distrito Centro. If we analyse the renting business in the centre of Madrid, we will see that one third of the offers correspond to tourist lodging houses. We can even specify more: in the area of Sol, one out of two flats for rent correspond to tourist lodging houses, reaching the figure of nearly 11%. These facts and figures allow us to have an exact idea of the great impact that this market has caused to the real estate sector. At present, it is calculated that an average of more than 100€ per night is charged for tourist lodgings in this area of Madrid and the demand continues to rise.
AN UNCERTAIN FUTURE
A year ago, we wrote an article about the revival of rental housing in Spain after having gone through difficult times due to the real estate bubble bust. In the mentioned article, we said that it seemed that rental housing in Spain is on the rise, even though it was still far from the levels of other European countries. However, the emergence of the gigantic Airbnb has led to a 180 degree increase regarding this business. Can coexistence among traditional business and tourist lodging houses be sustainable in the long term? What do other affected businesses say about this matter, as for instance those in the hotel and catering industry? The answer is not easy. We also think that a different body of legislation in each Autonomous Community cannot be prolonged for ever. Let´s see what happens in the future.
Picture 01: epanto