We’ve been talking about writing a London property blog and have written a couple of really useful pieces that we were almost ready to publish, but today, getting a plane back from Dublin, reading The Economistand in particular this article here ‘Build them and they will come’ (economist.com) - I knew we had to set the record straight..
With their industry under threat the behemoths of the hotel industry are spreading negative PR and using their influence to attempt to damage and undermine the ever growing sharing economy. Londoners I implore you not to listen to this nonsense; there is enormous demand from overseas visitors wanting to rent holiday homes in the capital and YOU can profit from the sharing economy.
As a business that provides property management for short-term lets, we have first hand experience of what's happening on the ground - we are having property owners approach us each week to sign up as clients and we’re filling their properties every day with tourist families, couples and business travellers. Both supply and demand are booming as smart Londoners realise there is a great opportunity to generate an extra income or at the very least help pay for their next holiday whilst they are away.
There has been a lot of pressure on the sharing economy of late, with the House of Lords suddenly taking an interest and a flurry of negative stories coming out, it doesn't take a genius to work out that the extremely well connected hotel chains are influencing this wave of negativity. If I'd just built a £50 million hotel in London, maybe I’d be doing the same; but have The Economist forgotten that the sharing economy is a benefit to ‘the people’ and it's better to help ‘the people’ rather than topping up Paris Hilton’s trust (vodka) fund?
Whilst the article refers to “apps that allow people to rent out their spare rooms to.. budget-conscious holidaymakers” nowhere is there any mention of entire house/apartment rentals which, for example account for 53% of all listings on Airbnb (insideairbnb.com). It is precisely these type of rentals that hotel owners are fearful of as they are the most attractive to their mass market customer base i.e. the tourist families, couples and business travellers we mentioned earlier who would prefer to rent an entire property and ‘live like a local’ instead of living out of a suitcase in another hotel room.
Take for example the distribution of Airbnb listings across London here (airdna.co), clearly shows the huge variety of areas in which you can rent anything from an entire detached house to a private room; From Barnet to Merton, Lewisham to Lambeth we see people embracing the sharing economy and using these platforms to generate an additional income - and when you are living in one of the most expensive cities in the world, we for one would applaud that.
Indeed over 60% of Airbnb profiles are single listings i.e. in which the host is advertising just a single room or one property (Source: insideairbnb.com), which indicates many regular Londoners are getting switched on to the possibilities of using these platforms.
The Economist we know there is always going to be a demand for central London and zone 1, but its missing the point to suggest that with around 18 million international visitors expected in 2016, the collective desire of those people revolves around being within a stone's throw of Big Ben and watching the Changing of the Guard. People come to our great city for all sorts of reasons, with a multitude of agendas and tastes that are not necessarily catered for by a new Ibis in Piccadilly or £400/night boutique hotel in Knightsbridge!
As for the supposed slowdown in rooms for rent on Airbnb, hoteliers should take note of PwC UK Hotels leader Samantha Ward, who said in a recent speech that in 2015 hotel numbers would have grown by 5 per cent while Airbnb would have exploded 100 per cent. She went on to say "Given it (Airbnb) is such a young supply it's huge in comparison" (meetpie.com). Considering there are roughly 30,000 rooms available via Airbnb in London (up from precisely zero just a few years ago) and notwithstanding the stock on massive sites like Homeaway and Tripadvisor, it is no wonder the hotel industry is running scared... unfortunately this seems to have resulted in this respectable magazine publishing an article about ‘Why the room-booking app has had so little impact in the capital’. Well that is simply not true.
So Londoners, please don't listen to the negativity, speak to people around you and feel the buzz for yourself. The Economist, if you want to write a balanced article about the sharing economy give us a call after you speak to Mr Hilton and Mr Marriott next time!
Rant over - next blog post will be about first time buying in London, so please come back - you should find it useful.