This article was updated December 20, 2022.
Revenues from short term rental platforms rose sharply in Greece this year as the sector became the economy’s strongest performer, according to a report prepared by Grant Thornton.
However, the record growth has hoteliers up in arms who are pushing for ways to contain the industry they say is not playing by the rules, prompting a review of regulation concerning short term rentals from the Greek government.
In the Grant Thornton report, data shows that revenues from platforms such as Airbnb and Booking.com are seen reaching 3.4 billion euros in Greece this year, up from 2.9 billion euros in 2019.
Best performing sector
Since 2016, growth rates in short term rentals in Greece have been averaging at about 15 percent per year, reflecting the country’s booming tourism sector.
"There is no industry that has more than doubled in size in recent years, and from the numbers it appears that this is a market that has a significant impact on the country's tourism product," said Panagiotis Prontzas, Head of Strategy & Investments at Grant Thornton Greece.
Like elsewhere in Europe and the US, the renting of properties for a couple of days to visitors has provided homeowners with an alternative source of income as travel returns to pre-pandemic levels. But the shift to these platforms is being blamed for housing shortages, particularly in large urban centers, and creating unfair competition in the hospitality industry.
There are also rising concerns about the strain caused on the country’s infrastructure and safety issues.
"The size (of the industry) is such that it greatly affects the tourism product that we promote internationally. In addition to quantitative data, there is also a question of qualitative characteristics, in terms of the quality of the tourism product (offered), the risk of health and safety and the burden on cities and their infrastructure", Prontzas added.
Pressure for change
Hoteliers are turning up the heat on the government to regulate the industry. Hotel investors and operators argue that many apartments rented on these platforms are not from individual owners looking to get some extra money but from large scale investors leasing whole apartment buildings as they sidestep rules and taxes applicable in the sector.
The proposals put forth by hoteliers include placing a 90-day limit on properties appearing on short term rentals, limiting areas where Airbnb is available and preventing companies from taking part in the business (leaving the platforms for individuals only).
New rules for Airbnb in Greece
Under pressure change, government officials in Athens have started working on new rules outlining short term rentals.
Among the changes being examined is limiting the number of apartments that each individual, or business, can provide to visitors for brief stays.
Although details are still sketchy, Greece's main goal is to fight the unfair advantage property owners have against hotels, who are burdened with more taxes and levies despite essentially providing the same service.
At a recent SETE tourism conference in Athens, Minister of State, Akis Skertsos pointed out that short-term rentals have provided "significant income support to the Greek family and small property owners" over the years, adding that new rules are needed to differentiate this produce and prevent issues of unfair competition from arising.
The minister said that the government is currently working on a new legal framework with final decisions soon expected from the Finance Ministry.
"We will put a brake on unfair competition coming from informal, large-scale, short-term leases harming tourism businesses. At the same time, the small properties of a family or a citizen who has 1 or 2 apartments being rented will not be affected in any way", he highlighted.
Outlook murky on rental laws
It remains to be seen, however, when and how these changes will be adopted. Greek government officials have shown a reluctance to take action after initiatives adopted elsewhere in Europe proved to be unsuccessful. In cities such as Barcelona and Amsterdam, limitations were introduced on short term rentals, only to be later overturned by courts.
In the Greek capital, calls from Athens mayor Kostas Bakoyannis to allow the sector to be regulated by the municipality have been rejected by the central government.