Booking and Airbnb are bursting at the seams. “It will become more and more difficult for amateurs”

Until recently, many apartment owners treated short-term rentals as a simple way to earn extra money. All you had to do was create an account on the booking platform, prepare the premises and receive guests. Today this market looks completely different. New regulations are emerging, tax obligations are increasing, and guests expect standards similar to those in hotels. I talk to Ewa Wielgórska, president of the management board of Fairy Flats, about why the era of spontaneous rentals is ending and who will make money on Booking and Airbnb in the coming years.

Beata Anna Święcicka, “WPROST”: It is increasingly said that the era of spontaneous short-term rental is ending. Are we really entering the stage of full professionalization of the market?

Ewa Wielgórska, president of the management board of Fairy Flats: Not long ago, an apartment owner who was thinking about short-term rental asked mainly one question: “How much can I earn per day?” Today, I hear more and more often: “Will I be able to do it safely, legally and without conflict with my neighbors?”

This is the best proof that the market is maturing. Booking and Airbnb are bursting at the seams, Poland is recording record results, but with the boom, the time for “incidental” rentals is coming to an end.

Short-term rental is no longer a way to earn extra money without major formalities. It is becoming a normal accommodation service – with registration, taxes, liability and increasing pressure on professional service.

There is a heated debate today around short-term rental. There are many ideas for new regulations. Which direction of change do you consider more rational?

There are two main directions of regulation in the debate today. The government project focuses primarily on registration, identification number of the premises, Central List of Tourist Accommodation Facilities, penalties for failure to register, inspections and the powers of municipalities to designate restriction zones. This is a systemic approach: first calculate the market, see the scale of the phenomenon, and then give local governments tools to respond where short-term rental really disrupts the functioning of the city.

The Poland 2050 project went further towards giving power over the use of premises to communities and cooperatives. A row broke out, and the project was widely debated in the Sejm, because some people believe that the community should decide what we do with the apartment, and some believe that it is too much interference with private property. In Poland, there is no unanimity that the community should be the reviewer of who can live in the premises and who cannot, especially since the buildings also contain commercial premises, such as offices or offices.

In the context of short-term rentals, it is also worth remembering that in tenement houses or apartment buildings that are attractive to tourists, a significant part of the premises already belongs to investors. In such a place, the consent mechanism may be intercepted by those who earn money from the rent. Instead of protecting the residents, it will consolidate the direction: this building becomes a quasi-hotel, that one tries to defend itself, and the city loses a coherent picture of the situation.

Therefore, a better direction is layered regulation: the register and data from platforms as a base, municipal limits and zones where the problem is greatest, and communities as an important, but not main, filter. Communities should have the right to respond to nuisances, enforce regulations and settle higher exploitation. However, they should not replace the local government in conducting housing policy.

How does the market react while waiting for the regulations to come into force?

From my perspective, the most interesting thing is that the market begins to regulate itself even before the laws actually take effect. As a medium-sized rental operator, we are visited by more and more owners who have previously been renting on their own. They had an apartment, an account on the platform, a cleaning lady and the feeling that “it worked somehow.” Now they say it more and more often: I don’t want to take the risk myself anymore.

What is the reason for such a radical change?

The reasons vary. Some are afraid of new registration requirements. Others are not sure whether they should own a business. Still others learn after some time that VAT obligations arise when using foreign platforms, even if they are not active VAT taxpayers, e.g. the obligation to pay VAT on the import of services. In addition, there is information about tax audits of people renting via booking platforms.

All this means that short-term rental is no longer an after-hours activity. The owner can, of course, still do everything himself, but he must take into account that he will not only be the host, but also the accountant, administrator, and the person responsible for regulations, complaints, damages, dynamic prices and contact with guests.

How may new regulations affect people using Booking.com or Airbnb?

For now, the platforms do not require new central numbers from hosts, because in Poland there is no target system in which such numbers would be entered (it will probably be launched in October this year). The owners are therefore operating in a transitional period. Some of them currently have local, municipal registration numbers, but this does not automatically mean compatibility with the future central system.

I assume that technically the change will be quite simple: on Booking, Airbnb and other portals there will be a new field in which you will have to enter the identification number from the database. However, the real change will not be in the form, but in responsibility. An offer without a number or with incorrect data will become easier to detect. The platforms will have to cooperate with the administration, and the state will finally see the scale of the market.

As short-term rentals require more and more work, why do landlords still choose them so willingly?

In the public debate, it is often assumed that owners choose short-term rentals only because they want to earn more. This is only part of the truth.

Many owners are afraid of long-term rentals. They are afraid of losing control over the apartment, problems with an unreliable tenant, a long path to regaining the premises and costly disputes. A short lease gives them a sense of greater flexibility: they can enter the apartment more often, react faster to damage, change their strategy, and sometimes use the premises themselves.

But this flexibility comes at a price. Short-term rental requires servicing. Guests write in the evenings, ask about parking, ask for early check-in, report breakdowns, get the wrong door code, expect hotel cleanliness and immediate response. It is not passive income if we take care of everything ourselves. That’s why more and more people decide to delegate service to specialized operators – not to relieve themselves of responsibility, but to organize processes, taxes, communication with guests and responding to problems.

Let’s assume that someone is planning to put their apartment up for short-term rental. Where should he start?

First, count. Do not multiply the price per day by 30 days, just take into account seasonality, platform commissions, taxes, cleaning, laundry, repairs, empty dates and your own time.

Secondly, check the formalities: records, taxes, VAT on platform services, community regulations, security obligations and future registration requirements.

Thirdly, prepare the apartment not for photos, but for repeated services. What counts is a comfortable bed, decent bedding, a clean bathroom, efficient Wi-Fi, simple check-in instructions, a smoke detector, regulations and an emergency contact.

Fourth, take care of your neighbors. In short-term rental, a good relationship with the community is an element of risk management. One problematic weekend can destroy more than a few good reviews can fix.

Finally, the most important question for apartment owners: is short-term rental still profitable?

Yes, but amateurs are becoming less and less profitable. Short-term rental can still be a very good model in tourist, business and seasonal locations. It may give the owner more flexibility than a long-term lease. It can also respond to the real needs of guests: families, employees on business trips, people coming for treatment, sporting events or trade fairs.

But we are entering a stage where those who take this market seriously will have an advantage. They will know the regulations, have taxes in order, proven procedures, contact details for the service, good cleaning and clear rules for guests.

The boom on Booking and Airbnb is not going away. The only thing that changes is the answer to the question of who will be able to make money from it. It will be less and less often the owner who “put the apartment on the Internet”. More and more often – the one who treats short-term rental as a professional service.

Thank you for the interview.

BIO:

Ewa Wielgórska – founder and president of the management board of Fairy Flats, a company dealing in the management of short- and medium-term apartment rentals. He has many years of experience in serving investors on the housing market. He specializes in building passive income from real estate, comprehensive rental services, renovations and protecting owners against rental-related risks.