Short-term rentals become big business
An ever-greater share of the short-term property leasing market in Greece is passing into the hands of investors and professional property managers, a trend that is also being observed in many other countries.
Athens, in fact, ranks second among 18 major European cities in this respect, as more than half (53 percent) of the properties available for short-term renting through online platforms such as Airbnb, HomeAway etc, belong to a professional or investor in the real estate sector.
The Greek capital comes second only to Prague (56.5 percent) and just above Budapest (50.3 percent). High rates are also recorded in Barcelona (49.8 percent), Madrid (48.2 percent) and London (45.7 percent). In contrast, Scandinavian markets such as Copenhagen and Stockholm show very low rates, at 9.6 percent and 10.5 percent respectively.
As property consultancy Arbitrage Real Estate noted in a recent report, the management of properties in this particular market in Greece is currently being carried out by existing managing companies in the property sector, which were active before the boom of such online platforms and turned to short-term leasing management as a result of sluggish buying demand in the Greek market.
At the same time, there are also startups that have been created as a result of the skyrocketing popularity of short-term leasing that offer full property management services to owners, from promotion to administering bookings and running cleaning services. They mainly address landlords who either are unable or not interested in getting involved in such procedures.
“These companies usually collect a share ranging from 15 percent to 20 percent from the revenues secured for each owner,” Arbitrage Real Estate’s analysis noted.
The need for professional management becomes ever greater in light of increasing competition, with a significant number of owners operating more than three properties on online homesharing platforms. The market has also witnessed the penetration by professional hoteliers offering a broader package of services and conveniences, similar to those of a hotel.
According to the Arbitrage analysts, “domestic hoteliers acknowledge that short-term leasings through digital platforms constitute a useful product of hospitality services under certain conditions. They also acknowledge the need for more visitors in Greece, given that the increase of tourism has a multiplying effect, since besides the revenues from accommodation, visitors will spend one-and-a-half times the same amount on other services, as experience has shown.”
In this context, and given demand, private investors who are active in the short-term leasing market will soon have to compete with large hotel groups too. For instance, Zeus International, which operates the Wyndham brand in Greece, has already started operating, since the beginning of the year, a complex of furnished apartments named K29 at Karaiskaki Square in central Athens, beside the Wyndham Grand Athens Hotel. It is also preparing one more complex of fully furnished suites at another property, also on Karaiskaki Square, which is aimed at attracting a more discerning clientele.
On an international level, hotel groups such as Accor are buying out popular platforms of short-term leasing and entering the sector in a dynamic fashion by acquiring a share of the market.
Still, according to Arbitrage, each market has its own customer profile. For instance, business travelers who look for a certain amount of services and amenities on their trips would prefer a furnished apartment with conveniences or the comfort of hotel standards, instead of choosing the typical short-term leasing options. In contrast, such a property attract travelers who are more sensitive with regards to price and tend to make their decisions according to the cost of their accommodation.
Likewise, in the luxury section of tourism, visitors tend to prefer hotels that offer them the additional conveniences and service they require for their stay, and not the ordinary Airbnb-type options.
