Short-term apartment rentals, thanks to platforms such as Airbnb, have become a common phenomenon in popular tourist destinations, including Warsaw.
Although the COVID-19 pandemic has caused a significant drop in the number of apartments made available for tourist purposes, it has already returned to the path of intensive growth throughout the European Union. Factors influencing the profitability of short-term rentals - including the number of tourists, the rate of return on real estate investment and tax regulations - herald the further development of this sector in Warsaw.
The impact of short-term rentals on the development of Warsaw and the standard of living of its residents is a multidimensional problem that requires in-depth research.
On the one hand, short-term rentals expand the range of accommodation options for visitors to the capital, meeting needs that are less met by traditional hotels (e.g. access to a kitchen, more space).
Airbnb and similar platforms have placed great emphasis on promoting "home-sharing" and the "sharing economy", which involves renting out a single room or occasionally an entire apartment.
These types of services have various positive effects, such as involving new urban areas in tourism and enabling additional earnings for residents.
On the other hand, examples from global tourist destinations such as Barcelona or Lisbon also show the negative aspects of the excessive growth of this phenomenon.
Year-round rental of premises to tourists reduces the availability of apartments for local residents and contributes to gentrification processes; in turn, uncontrolled "tourism" is associated with a decline in the quality of life of residents and the disappearance of the urban fabric.
The DELab UW team: Dr. Kristóf Gyódi, Dr. Wojciech Hardy and Dr. Joanna Mazur, commissioned by the Capital City of Warsaw, conducted research on the characteristics of the short-term rental market in Warsaw.
The aim of the report is to present key market features, estimate what part of the housing stock is covered by short-term rentals and summarise conclusions from regulations introduced in various European cities.
The empirical study is based mainly on a database prepared by AirDNA, which collects data at the level of individual offers on the Airbnb and VRBO platforms.
Based on these data, the research team conducted a detailed empirical analysis, presenting the dynamics of changes in supply, spatial concentration, market professionalization and revenues.
To gain a broader perspective, we attempted to estimate the actual size of the market by additionally collecting data on apartments listed on Booking.com.
Districts with the greatest potential for further growth have also been identified based on potential earnings from short-term and long-term rentals.
The number of listings listed on Airbnb and VRBO in Warsaw in February 2024 was 9631, of which 86% were entire apartments.
The level of professionalization is very high: 74% of offers belong to entities managing at least 4 offers, and 91% of offers are services that do not belong to the "sharing economy". The level of concentration is well illustrated by the fact that 5% of profiles accounted for 51% of active offers and 73% of revenues in 2023. Offers are also strongly concentrated spatially: 75% are located within a radius of 5 km from the Centrum metro station.
The share of entire apartments listed on Airbnb and VRBO is about 0,7% of the housing stock in Warsaw; in Śródmieście, this share is about 3,5%.
This share is on the rise as supply on Airbnb and VRBO is growing rapidly: annual growth reached over 35% in 2023.
Additionally, we identified several thousand (4400) apartments on Booking.com that were not listed on Airbnb or VRBO, which means that the actual size of the market exceeds our results based on these platforms. The potential earnings significantly exceed the income from long-term rentals in central or well-connected districts (Śródmieście, Wola, Ochota, Praga Północ), which is an incentive to further increase the supply in these districts.
Regulatory experience from other cities indicates that regulation can effectively influence the development of the short-term rental market, and that simple and enforceable methods, e.g. the obligation to obtain a license, are more effective means of achieving the goal.
The European Union has adopted a regulation on the collection of data on short-term rentals: this legal act formulates the conditions for the transfer of data by platforms to state authorities. The EU regulation is an opportunity for Warsaw to create a register of apartments covered by short-term rentals and access to data from digital platforms, which will allow for the preparation of more precise analyses and monitoring the impact on the housing market.
The report is available here
