Wednesday, February 21, 2024

Rome’s Airbnb owners suffer from tourism collapse

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When Tommaso Pediconi turned his family home in the former Jewish ghetto quarter of Rome, one of the city’s oldest and most beautiful neighborhoods, into an Airbnb rental over 10 years ago, he was there one of the few in the region to manage such a business.

Considering the large number of tourists who flocked to the city and the Airbnb model boom, it quickly became her sole source of income. Business was going so well that he decided to rent two more apartments in the center of Rome and put them on the stage.

Today, Mr. Pediconi, 34, no longer has clients. “I had reservations until October but they were all canceled, I had to pay back a lot of money,” he said.

The collapse in the number of tourists visiting Rome during the pandemic burst the city’s Airbnb short-term rental bubble, forcing some indebted homeowners to sell their apartments to avoid defaulting on their mortgages.

In recent years, a large number of apartments in central Rome near landmarks such as the Colosseum and Trevi Fountain have been refitted for short-term rental by amateur owners seeking to take advantage of the estimated 15 million visitors. of the Eternal City per year.

Now real estate agents say the collapse in visitor numbers has left homeowners overworked after speculating on Rome’s tourism boom at a time when the Italian economy as a whole was stagnant. Many are rushing to convert their properties into long-term rentals or sell them to pay off debts, and realtors say sales prices have fallen by about a third.

“There are forced sellers now, and it’s a sad and inevitable consequence of the collapse in tourism,” said Bill Thomson, president of Italy for Knight Frank.

“A lot of people in places like Rome used their profits to invest in even more properties, some bought five or even 10. There was always the risk that too many people would jump on the Airbnb train at the same time. “

Some owners in Rome are forced to sell to pay off their debts © Alessia Pierdomenico / Bloomberg

Rome was the sixth most popular city in the world for the total number of nights booked on Airbnb in 2018, according to the company, behind only London and Paris in Europe.

The company has claimed it contributed nearly a billion euros to the Roman economy in 2018 alone through bookings and subsequent spending by its users – the largest of any city in Italy. This demand has provided a rare bright spot in a local economy that lags far behind the Italian financial capital Milan over the past decade.

Mr Pediconi said he was renting out his old family home for € 120 a night. Now it is offered between € 40 and € 50 per night. Due to the pandemic, all bookings were canceled and refunded, and he had to cancel the rental agreement for the other two homes he managed.

“I never thought that could happen. I am now waiting and hoping for a quick recovery, but I am sure that many who started doing this as a job will perish, ”he said.

“Right now I’m trying to rent the house to residents, but I haven’t been able to do so yet, even though I’ve lowered the prices by 75%.

Donato Cristiano, a real estate agent in Rome, said two-room apartments in the city’s historic center, rented at € 1,300 per month before the Covid-19 pandemic, were now offered at € 900 including utilities.

“We’re talking about apartments that a few years ago you could easily rent for € 2,000 per month as a seasonal rental,” he said.

The Airbnb rental boom in Rome in recent years has led the online rental platform to come under closer scrutiny from the heavily indebted local government, which in June announced a new ” tourism ”levied on customers staying on short-term rentals in the Italian capital. .

Rome Mayor Virginia Raggi said the € 3.50 per night charge for Airbnb customers, paid directly to the Municipality of Rome, would help “restore fair competition between [hotel] operators, fight against the black economy and follow tourist flows ”.

Realtors say that due to the collapse in short-term rentals, many landlords have attempted to repurpose their properties into longer-term rentals instead of selling them, but supply currently far exceeds demand.

“At the moment, the problem is that there are too many properties for rent and not enough people, due to the lack of tourism and prolonged remote working,” said Carlotta Marchionne, a real estate agency working in the center. from Rome.

“The phone no longer rings. Our office has never been so quiet. ”


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