Touristification, rent gap and the local political economy of Airbnb in Salzburg (Austria)

ABSTRACT

Cities all over the world are experiencing a steady tension that from interlinked processes such as touristification, gentrification and the financialization of housing. This paper shows how short-term rentals (STR) are an accelerator to all these processes which pull in or redirect different forms of capital and short-term users on the one hand and push out long-term residents on the other. Based on fine-grained fieldwork this paper illustrates that a new platform real estate market has emerged which, in the case of Salzburg, is dominated by local, commercial providers. By taking one of the most touristified cities in Europe, I further illustrate how a short-term rent gap is fueling this process. Moreover, this paper reveals the motives of extraction, and actor-relations and analyses the impact of Airbnb on the housing market in general. Finally, it provides an overview and critique of recent policy measures that try to regulate STR.

KEYWORDS:

• Short-term rentals
• touristification
• rent gap
• extraction
• housing market
• regulation

Introduction

Airbnb is one of the most widely debated actors of digital platform capitalism after becoming one of the most powerful and dominant providers of short-term rentals (STR) worldwide (Colomb & Moreira de Souza, 2021, p. 8; Srnicek, 2017, p. 11). Critical research has revealed the negative impact of short-term rentals in general, and Airbnb in particular, on housing markets and local communities especially in tourist cities (Cocola-Gant & Gago, 2021; Grisdale, 2019; Gurran & Phibbs, 2017). Moreover, several empirically-based studies disprove the myth of the sharing economy since commercial providers tend to get the highest revenues and dominate the market in many cities (Cocola-Gant et al., 2021; Grisdale, 2019; Katsinas, 2021; Mermet, 2017; Wachsmuth & Weisler, 2018). Although there is evidence for variation across cities in Europe and particularly within cities (Adamiak, 2018; Kadi et al., 2019; Roelofsen, 2018; Schafer & Braun, 2016), a new platform real estate market has emerged (Shaw, 2020).

However, research so far has concentrated on global or capital cities (Crommelin et al., 2018). But what does this look like outside metropolises such as Paris, London, New York or even Lisbon and Berlin? Do we find different patterns and structures in smaller agglomerations? And how do these settings influence socio-spatial processes and policy reactions (regulations)? Therefore, this paper provides insights from a medium-sized city. It is based on fine-grained fieldwork conducted in 2018 and 2019 in Salzburg (a city that has the highest concentration of Airbnb listings per capita among the larger Austrian cities). Besides mapping the spatial distribution, supply and revenue structure of Airbnb listings based on new datasets, the paper provides findings from a qualitative research setting that seeks to unlock motifs of hosts and actor-network relations. In fact, in many cases, we know very little about local structures and trajectories or, as Cocola-Gant and Gago (2021, p. 1673) argue, “we know very little about who the Airbnb landlords are”. Having interviewed Airbnb hosts that provide more than 10% of all Airbnb listings in the city of Salzburg, this paper can offer a broad picture of the motives and profile of hosts and being able to conclude the impact of Airbnb on the housing market. Hence, the paper will provide insights into the following research questions: (i) Who are the main actors of the short-term rental market in a medium-sized touristic city like Salzburg and what are the main motives for short-term renting? (ii) To what extent does Airbnb influence the local housing market? (iii) And beyond Salzburg: What kind of wider politico-institutional logics and settings drive short-term rentals?

Conceptually the paper discusses touristification, gentrification, and the financialization of housing as essential processes which help to explain and classify the phenomenon of short-term rentals. While touristification can be defined as a process that describes the spreading and dominance of tourist uses in urban districts which change local patterns of housing, shopping, dining, eating, etc., gentrification focuses on the diverse rationalities of displacement. Like Yrigoy (2018), Wachsmuth and Weisler (2018) and others this paper provides (empirical) insights into the socio-economic background of gentrification. In fact, Airbnb creates a new potential ground rent without former depreciation or redevelopment that makes it attractive for different types of landlords or property owners to shift from long-term to short-term renting (Katsinas, 2021). The principal motive is an abrupt rise of a new rent gap. I am substantiating this argument by using quantitative and qualitative data. In contrast to other cases, this new short-term rent gap in Salzburg is based upon a long-standing touristification which has, however, intensified in the last 10–15 years. Additionally, this paper draws on insights from rent theory to elaborate on these issues (Sadowski, 2020; Ward & Aalbers, 2016).

Moreover, the paper considers how housing in general has changed at different rates in recent years. This leads me to question if and how the financialization of housing – a process that can be defined as a structural quest for profitable investment and rate of return that has turned housing into one of many asset classes¹ – has contributed to the proliferation of short-term rentals. Finally, the paper takes a look at the impact of the local political economy of the city of Salzburg on short-term rentals.

I argue that research should pay more attention to the nexus of global, national and local factors (Clancy, 2022) as well as related power structures. But especially the analysis of specific cases can provide insights into the impact on socio-spatial inequalities caused by short-term renting.

Main topics and key findings concerning short-term rentals in urban studies literature

The rapid and intense growth of short-term rentals in many cities around the globe has sparked a broader discussion in social science about forces, actors and consequences (e.g. Schor, 2014; Srnicek, 2017). Recently, we also see much research in urban studies that reflects on short-term rentals and related issues critically (e.g. Cocola-Gant et al., 2021; Ferreri & Sanyal, 2021; Goyette, 2021; Hoffman & Heisler, 2021; Smigiel et al., 2020; Wachsmuth & Weisler, 2018). The following chapter provides an overview of the main conceptual arguments and findings in urban studies. Four major themes can be distinguished that tackle economic, social or political aspects of the proliferation of short-term rentals.

Short-term rentals and gentrification – understanding mutual relationships

Considering the disruptive impact on housing markets, several papers view short-term rentals as part of a wider logic of planetary gentrification processes. We can distinguish two types of arguments that focus on gentrification. While one strand of research has revealed the new rent gap that Airbnb is creating, a second strand of research has analyzed forms and outcomes of displacement linked to Airbnb practices in different cities.

The new short-term rent gap consists of several aspects. First of all, potential new ground rent is created in a very short period since Airbnb allows higher revenues without former investment or depreciation (Wachsmuth & Weisler, 2018, p. 1154). Second, short-term rentals are unevenly distributed within cities, but they offer a city-wide potential for higher profits (Grisdale, 2019). Third, while earlier research on the rent gap has revealed that the gap consisted of a shift from long-term rental income (actual ground rent) to ownership tenancy (potential ground rent), short-term rentals change this pattern as short-term rental income acts now as a potential ground rent, as Yrigoy argues (2018, p. 2723). Fourth, short-term rental upscale housing markets lead to the emergence of global rents for platforms or corporate hosts (Fields & Rogers, 2019; Slater, 2017).

However, besides being a convincing and consistent concept that explains and theorizes gentrification, the short-term rent gap – based on rent theory – lacks empirical insights. This paper tries to address this shortcoming and attempts to understand if the general and structural elements of the rent gap theory are reflected in the decision-making of landlords and determine Airbnb hosts’ actions.

Another important issue to consider is the meaning and function of rent in urban development in general and concerning short-term rentals in particular (Haila, 1990; Ward & Aalbers, 2016). Within numerous discussions concerning rent gap theory, the rent gap theory has been sometimes criticized for not paying sufficient attention to the actual meaning of rent. What kind of rent is the rent gap theory talking about? This paper will and cannot discuss this crucial issue here in detail. However, there is indeed a need for future research to reflect on and theorize the types of rent that emerge due to short-term renting. This includes a careful differentiation of how STR platforms extract rents (direct/indirect rents, etc.) (Langley & Leyshon, 2017). Moreover, I think Anne Haila’s main questions (1990)² on rent theory could be a guideline to deepen the conceptual debates on short-term rent gaps since these questions scrutinize the coordinative function of rent in urban development (Haila, 1988).

Beyond theorizing rent a second strand of research has focused on socio-spatial outcomes of gentrification by highlighting different forms of displacement (Grisdale, 2019). Again, waves of displacement fueled by short-term rentals have hit cities such as Barcelona, Lisbon or even Reykjavik in quite a short period (Cocola-Gant, 2016; Mermet, 2017). This includes different forms of direct and indirect displacement that are characterized e.g. by the removal of long-term residents and the loss of daily shopping facilities or places of encounter. In other urban contexts, short-term rental seems to intensify already existing gentrification processes. Still, it remains a methodological challenge to provide empirically-based results for displacement processes since they are complex and silent processes.

Short-term rentals and financialization –wider politico-economic linkages

Several papers discuss the influx of transnational capital as a key driver of short-term rentals and gentrification. Therefore, short-term rentals are seen as part of the 5th wave of gentrification which is often described as “the urban materialization of financialized capitalism” (Aalbers, 2019, p. 5). More particularly, several authors have underlined the links between Airbnb and financialization. Grisdale notes that entrepreneurial Airbnb hosts can be interpreted as actors of variegated financialization (2019, p. 8). Cocola-Gant and Gago emphasize the emergence of corporate Airbnb investors in the case of Lisbon as a new model of accumulation meaning that the flexibility of STR increases the level of extracting revenues from housing as a financialized product (Cocola-Gant & Gago, 2021, p. 1672).

Recent studies go even further and indicate the dominant role of corporate hosts in several cases. Corporate hosts are managing large short-term rental portfolios. In fact, they have professionalized the whole short-term industry as they apply data analysis to further optimize financial revenues for their clients in an automatic manner which leads to a further commodification of STRs as they combine hotel services with the image of the hospitality business (Cocola-Gant et al., 2021, p. 10).

Semi and Tonetta show processes of rent extraction in a rather non-touristic neighborhood in Turin, Italy arguing that short-term renting has become a kind of middle-class strategy in the aftermath of the global financial crisis of 2008 (Semi & Tonetta, 2021). Moreover, Airbnb has increased the visibility of formerly hidden housing markets dramatically as Crommelin et al. argue (2018, p. 434). This upscaling of housing markets is part of a general globalization of housing.

Short-term rentals and touristification

However, mobile capital is not the only facilitator of short-term renting. In many cities around the world, Airbnb is part of rapid touristification (Sequera & Nofre, 2018). Airbnb has fostered the spatial expansion of touristification beyond classic tourist zones toward former residential zones (Wachsmuth & Weisler, 2018, p. 1166). Consequently, long-term residents often experience a sense of loss and frustration concerning this process as has been described above. However, at least in some cases, Airbnb has enabled the participation of new groups and inclusive tourism practices. This means that “home-sharing” is an element of the Airbnb market as non-profit actors do participate (Kadi et al., 2019). Still, most studies indicate that commercial hosts and practices dominate the short-term rental market (Grisdale, 2019; Katsinas, 2021; Mermet, 2017; Wachsmuth & Weisler, 2018). Several authors argue that transnational, mobile people are key actors in this process, too (Carvalho et al., 2019; Jover & Diaz-Parra, 2020).

Short-term rentals and urban governance – how urban policy has failed to regulate

Last but not least, Airbnb is becoming an issue for policymakers and policy analysis. While municipalities have welcomed short-term rentals initially, there is a growing concern among municipal policymakers that Airbnb is driving up house prices (Amsterdam, 2019; Colomb & Moreira de Souza, 2021). There is an intense debate on adequate policy responses which vary from temporal to spatial restrictions (Nieuwland & Van Melik, 2018). However, urban policymakers face difficulties since STR are often enforced at the EU or national level and regulations often do not tackle the main providers and main features of short-term rentals (Aguilera et al., 2021; Smigiel, 2020). Moreover, municipalities face a general data problem since they are not able to force Airbnb to provide user data so far (Ferreri & Sanyal, 2018).³ By analyzing STR regulations in Paris, Milan and London in a comparative manner Aguilera et al. (2021) show different processes of politicization and that actual regulation varies and depends on the actors who articulated the issue in the first place. Since urban tourism is one important source of revenue for municipalities, urban planners encounter difficulties even within their own administration. Besides this, different authors emphasize the structural power of Airbnb itself as a main reason for failed regulation. Airbnb has established internal (bureaucratic control system) and external modes of governance (agenda-setting and lobbying at EU and national scales) that have transformed Airbnb into a “regulatory entrepreneur” and a powerful “new urban institution” as van Doorn underlines (2019). Moreover, Airbnb founded and organized its own grassroots lobbying activities that are meant “to advocate for favourable regulations” as Yates (2021, p. 5) argues.

Materials and methods

Using the case of Salzburg, this paper examines spatial characteristics, the stakeholder structure of Airbnb and socioeconomic background conditions associated with this form of platform capitalism. The paper is based on two datasets collected between June 2017 and September 2018. ⁴ First of all, we generated a novel dataset through our own web scraping from Airbnb.com. Similar to other studies, we collected data for all Airbnb listings in the city of Salzburg for two days in June 2017 and June 2018 (Kadi et al., 2019, p. 10). Both dates are outside of the high season in August. We have chosen to analyze specific days since this approach delivers more reliable data. This approach leads to fewer listings compared to a high-season survey but also to fewer inactive listings. To get a representative picture, we have cross-checked our results with data from other sources such as Airdna for different periods (several months before and after June and in 2019 and 2020). We did not find variations which show that we have a rather stable supply structure.⁵ The collected data included more than 50 parameters (e.g. host and listing name, location of the listing, price, textual description of the host and the listing (if available), listing reviews, guest capacity, number of rooms, number of beds, booking availability, ratings, service fees, etc.). Data quality has been proved by contrasting our data with other sources and standards of web-scraping (airdna.com and insideairbnb.com) as well as a careful double checking of group listings that might belong to one host operating under different names. However, the STR ownership structure derived from web scraping means only the first step of the analysis. While such a quantitative setting allows us to conclude regarding the spatial distribution of Airbnb listings, host types and the structure of the Airbnb market, it does not reveal motives, the socio-economic structure of Airbnb hosts or the politico-economic background conditions. Therefore, a series of qualitative interviews with Airbnb hosts were added (Smigiel et al., 2020). The selection of interviewees was based on the quantitative dataset and included different Airbnb types to draw a realistic picture of Salzburg’s short-term rental market.⁶ We conducted 13 interviews with Airbnb hosts that provide more than 10% of all Airbnb listings (73–80 Airbnb listings) in the city of Salzburg (see Table 1). The interviews lasted between 20 minutes and one hour and 15 minutes and covered issues like sociodemographic/economic background, motivation for doing Airbnb, Airbnb practices, etc. For this paper, I will merge and reflect on the main findings of the content analysis of the interviews and the findings from web-scraping and quantitative statistics. Moreover, I will include insights from a second research project that looked at the residents’ perspective and perception of short-term rentals and touristification in two inner-city areas in the City of Salzburg. Methodologically, we conducted two household surveys in two areas of two inner-city neighborhoods in 2019. 63 questionnaires have been collected. Additionally, we conducted 13 in-depth interviews and one group interview with residents, local businessmen and local businesswomen.

Table 1. List of interviewed Airbnb hosts.

Interviewee	Number of Airbnb listings	Type of Airbnb host^a	Primary occupation
A 1	21	Professional/commercial	Real estate
A 2	21	Professional/commercial	Tourism
A 3	6–11^b	Professional/commercial	Tourism
A 4	5–7^b	Professional/commercial	Gastronomy
A 5	5	Professional/commercial	Real estate
A 6	4	Commercial	Medicine
A 7	4	Commercial	Entrepreneur
A 8	1	Commercial	Entrepreneur
A 9	1	Semi-commercial	Tourism
A 10	2	Semi-commercial	Tourism
A 11	1	Home sharer	Entrepreneur
A 12	1	Home sharer	Company employee
A 13	1	Home sharer	Student

^a The quantitative and qualitative data we collected make it possible to distinguish four types of Airbnb hosts: (a) home sharer: one listing, shared room or shared flat, non-permanent listing (b) semi-commercial: one listing, entire unit, mix of permanent and non-permanent listing (c) 2–5 listings, mostly entire units, permanent listings, cleaning workers (d) five or more listings, mostly entire units, permanent listings, employees that organize cleaning, booking and accounting.

^b Amount of Airbnb listings has increased between 2017 and 2018.

Source: Author.

Results: the Airbnb market in the city of Salzburg and its circumstances

The city of Salzburg has approximately 156,000 inhabitants and is Austria’s fourth-largest city in terms of population. It is the capital of the State of Salzburg and has a long-standing tradition concerning urban tourism due to its historic center (a listed UNESCO world heritage site since 1996), festivals (the world-famous Salzburg festival for music and drama since 1920), and other visitor attractions (hometown of Wolfgang Amadeus Mozart and the Oscar-winning movie The Sound of Music). However, tourist numbers have been rising rapidly until the outbreak of the Corona pandemic for more than 10 years (see Figure 1). In 2018, Salzburg registered more than 3 million overnight stays and roughly 7–8 million daily visitors per year which makes Salzburg the most visited city in Austria measured by overnight stays per inhabitant (Salzburg, 2019). The Corona pandemic meant only a short interruption for tourism in Salzburg. Recent statistics show that tourism in Salzburg is reaching again peak values of pre-Corona times from 2019.⁷

Figure 1. Development of tourist numbers and housing in the city of Salzburg 2001–2018, 2001 = 100 (own calculations, Salzburg, 2019).

Massive increase in tourists since 2009.

The housing market of Salzburg

Salzburg’s housing market is characterized by a high share of private ownership. 66% of all housing units are privately owned. Private enterprises or foundations hold a further share of 8%. Non-profit housing plays a minor role compared to other Austrian cities (Kadi, 2015; Van-Hametner et al., 2019). Roughly 20% are owned by non-profit cooperatives. Publicly-owned rental housing accounts for only 3% (Salzburg, 2018). Additionally, the city of Salzburg has limited possibilities for constructing new housing for two reasons. First, the municipality must invest a lot to acquire building plots (prices for building plots are the highest among larger Austrian towns). Second, the municipality owns only a very few plots of land.

Another essential parameter concerning housing is that developers are bound to strict urban planning legislation. The so-called urban greenery declaration, adopted in the 1980s, actually prohibits any kind of housing construction in these protected areas that are predominantly located in southern districts of the city (Dopsch & Hoffmann, 2008). Therefore, new housing construction takes place mostly in already densely populated areas in the northern districts. In fact, the urban greenery declaration has amplified socio-spatial cleavages between the less-wealthy northern and the affluent southern parts of the city. Moreover, it is one of several factors that has increased the shortage of building plots and has led to an increase in house prices as well.

Indeed, house prices in Salzburg are among the highest in Austria. This includes land and property prices as well as rental prices. Furthermore, we notice there has been an increase in house prices in the last 10 years in many Western European cities. This increase in house prices very often substantially exceeds the increase in wages. Although there are a variety of reasons that might differ from case to case, housing has generally become a financial asset since the late 1990s. There is a growing amount of literature that has revealed different features of this type of financialization. Financialization of housing is characterized by a (new) variety of actors (trusts, funds, stock corporations, etc.) from different economic fields, a wide-spread quest for different types of real estate investments by institutional and private investors, deregulated housing markets and a decrease of national or local housing subsidies (Fernandez & Aalbers, 2016). Moreover, the financialization of housing is associated with a particular form of rent-seeking and rent-extraction based on property rights that put housing under pressure globally (Rossi, 2019; Zeller et al., 2018, p. 598).

The city of Salzburg does reflect different elements of the ongoing financialization of housing. Although the influx of transnational capital might be not as dominant as in major European markets or capital cities, the medium-sized city of Salzburg has seen a stark increase in housing as a financial asset. Mostly local private investors and individuals are increasingly buying flats as investment property as transaction data indicate (Van-Hametner & Lang, 2019). The tourist city of Salzburg seems to fit the investment schemes of private investors. In fact, the volume of real estate transactions reached a new record in 2016 and is the highest of all Austrian cities measured by transactions per inhabitant. House prices increased even further since the outbreak of Corona pandemic.

On the other side of the investment scheme, the city of Salzburg has experienced a constant increase in housing construction over the last 15 years. However, the number of inhabitants did not grow in similar ways (see Figure 1). This has led to a large increase in housing units without a declared place of residence. Additionally, there is a constant share of vacant apartments in the city of Salzburg. It is estimated that up to 5,000 out of Salzburg’s 88,000 apartments are vacant or permanently underused mostly for speculative reasons. Last but not least, the changing role of housing policies, including the reduction of housing subsidies for construction, contributes to a successive transformation of housing (Zeller et al., 2018).

The Airbnb market in the city of Salzburg – structure and actors

As in many European cities, Salzburg has also seen a dramatic increase in short-term rentals (until the outbreak of the Corona pandemic) reaching more than 1,000 Airbnb listings during the high season in August 2019 (Airdna, 2019). As already mentioned, Salzburg ranks first among all larger Austrian cities concerning Airbnb listings per capita. To get a detailed and representative picture an independent quantitative analysis for selective days outside of the high season was chosen. Our web scraping counted roughly 700 Airbnb listings. 74% are entire home listings (n = 511). 24% (n = 163) are private rooms and only 2% (n = 15) are shared rooms. Figure 2 shows the spatial distribution of all Airbnb listings. 60% of all Airbnb listings are concentrated in only 11 out of 32 city districts (mainly the old-town and other inner-city districts of Salzburg, see Figure 2).

Figure 2. Spatial distribution of Airbnb listings in the city of Salzburg. Source: Author's calculation and illustration.

Colored city map of Salzburg shows STR hotspots in Salzburg.

Concerning the market structure multi-listing hosts have an outstanding position (see Figure 3). Although 76% of all hosts are single-listing hosts, they only count for 45% of all Airbnb listings. Most of Salzburg’s Airbnb listings (55%) are provided by multi-listing hosts. They can be split into hosts who provide 2-5 listings (27%) and hosts who have a portfolio of at least five listings (28%). Both types can be summarized as commercial or entrepreneurial hosts (Grisdale 2019, p. 11) since they offer more than one listing to increase their revenues. The distribution of Airbnb revenues in Salzburg supports this argument. 46% of all income goes to hosts that earn more than €4,500 per month and 20% is earned by hosts who have a monthly income of more than €13,500 (Smigiel et al., 2020, p. 10).⁸

Figure 3. Share of Airbnb listings and hosts by size. Source: Author's calculation and illustration.

Colored city map of Salzburg highlights who is renting how many homes.

The series of qualitative interviews with different types of Airbnb hosts (home sharers, semi-commercial, commercial and professional hosts) confirmed this “commercial picture”. In fact, all types of Airbnb hosts (even the majority of home sharers and semi-commercial hosts) declared that higher revenue is the principal motive for doing Airbnb since it opens up new opportunities for earning money from renting as the following citations reveal.

We have three apartments for long-term residents and five apartments we rent via Airbnb simply because it makes sense economically. I would prefer to have all eight apartments on Airbnb. Why? Well, I grew up in capitalism and this is the way you can make more money. (A5)⁹

On the other hand, the vast majority of interviewed Airbnb hosts denied that sharing has any importance to them. While only a few Airbnb hosts (with single listings) mentioned that having guests from all over the world is a nice “cultural extra”, the majority denied explicitly sharing for sustainable reasons (underused flats). Sharing was overwhelmingly interpreted as a marketing tool that has helped to attract new types of guests.

Contrary to many other studies on Airbnb, the Salzburg case shows that local property owners are profiting most from Airbnb. This means that Salzburg’s Airbnb market is dominated by local (entrepreneurial) hosts. International investors or other types of transnational capital are of minor importance. Hence, all interviewed Airbnb hosts were either born in Salzburg or have been living there for decades. This reflects findings from other studies of the Salzburg housing market which have revealed a similar local ownership structure that dominates the housing market and transaction schemes (Van-Hametner et al., 2019).

To sum up, quantitative and qualitative data reveal that the average Airbnb host in Salzburg is an entrepreneurial one which has two or more listings, uses professional operators to manage his/her listings and has profound knowledge of the local housing/Airbnb market. Professional/commercial hosts (5 or more listings) do networking, know each other and use similar services such as specialized legal advisors.

First some colleagues recommended me to contact a lawyer. I contacted one who is specialized in the acquisition of short-term rental real estate. He told me that I am not running any risk with my two little, tiny houses. Also, nobody will say anything because there are no neighbors. […] Regarding the second house I decided to get a letter of agreement by the long-term tenants. They signed this letter saying that they agree with having short-term neighbors (A4).

This citation reveals close social and professional networks that characterize the socioeconomic profile of professional/commercial Airbnb hosts and the Airbnb scenery in Salzburg. In fact, some of the interviewed professional hosts recommended us to contact other professional hosts they do know. There is a small but well-connected circle of local businessmen and businesswomen who actively combine financial capability, local knowledge, and business interests.

The colleagues that I know have about seven Airbnb apartments. There is another colleague who recently bought two houses in order to rent them on Airbnb […]. Occupancy rate is about 80% (A4).

An interview series has further shown that most professional and commercial hosts have been in the tourism and real estate business before (see Table 1 “primary occupation”). Both types of Airbnb hosts are actively using their business ties and their specialized knowledge since short-term rentals are seen as a new, very profitable business that connects housing with tourism. In fact, interviewees have stated that a new parallel housing market segment has emerged. At least some of them invest in different types of housing which shows that they are actively applying different strategies to extract revenue from housing as an asset class.

Last but not least, I conducted a brief profile survey in October 2020 to find out what happened to the 13 Airbnb hosts that were interviewed before Corona pandemic and if four months of no tourists/guests/income have had an impact on their profile and activity. Although, this survey did not elaborate on behavior or coping with the mentioned situations two conclusions can be drawn. First, 11 out of 13 Airbnb hosts remained active short-term renters. Second, all of them kept their Airbnb profile as it has been before Corona pandemic which underlines that STR is not a short-term business and will remain and probably will become even more a structural element of housing markets.

Airbnb’s impact on the local housing market

Different studies have indicated that Airbnb puts pressure on local housing markets worldwide since housing units are withdrawn from the regular (long-term) tenant market (Grisdale, 2019; Gurran & Phibbs, 2017; Mermet, 2017). Furthermore, there is evidence that Airbnb is a highly unevenly distributed phenomenon mostly affecting inner-city areas. The spatial pattern of Airbnb in Salzburg confirms this finding (see Figure 2). Therefore, Airbnb is not disturbing entire housing markets primarily, but puts enormous pressure on particular segments of local housing markets which in the long-term will most probably affect larger segments of local housing markets and house prices as well (Barron et al., 2017; Duso et al., 2020).¹⁰

To evaluate the impact of Airbnb on Salzburg’s housing market, this paper focuses exclusively on entire home listings (75% of Salzburg’s Airbnb market). Furthermore, this paper uses thresholds of 60 and 120 days to measure the direct and permanent impact of Airbnb on local housing markets. According to Wachsmuth and Weisler (2018) both thresholds allow us to distinguish between permanent and occasional short-term rentals. The threshold of 60 days refers to the minimum number of days an entire Airbnb listing needs to be rented via Airbnb to be classified as a permanent listing. Additionally, this paper uses the availability of an entire Airbnb listing as a second threshold (at least 120 days). Only if both thresholds apply is the listing marked as permanently withdrawn from the regular housing market (see Figure 4). Applying these thresholds to the city of Salzburg, 51% of all entire Airbnb home listings are permanent listings and, therefore, permanently withdrawn from the regular housing market. Compared e.g. to Vienna (38%) (Kadi et al., 2019, p. 13), another important short-term rental market in Austria, Salzburg has a considerably high percentage of permanently withdrawn Airbnb listings which confirms the already mentioned commercial setting of Airbnb in Salzburg. Especially in inner-city districts up to 4% of the local housing stock is permanently rented via Airbnb. Similar numbers are reported from highly commercialized/touristified areas in New York City or Toronto (Grisdale, 2019; Wachsmuth & Weisler, 2018).

Figure 4. Share of permanently rented entire Airbnb listings as % of total housing stock. Source: Author's calculation and illustration.

Redly colored city map of Salzburg illustrates the percentage of house units per district that are permanently rented as STRs.

However, Kadi et al. (2019, p. 8) argue that the 60/120 days indicator excludes permanent renters (120 days) who are not managing to achieve 60 days of booking. In fact, regardless of whether the listing is rented, the housing unit is withdrawn from the regular housing market anyway. So, when only applying a threshold of at least 120 days, the number of permanent listings increases substantially. 77% of all entire home listings in Salzburg are available at least 120 days a year. And even 50% of all entire Airbnb home listings are available more than 240 days a year. This reflects the view that Airbnb is an all-the-year business in Salzburg which is situated in a tourism market that itself has transformed into a four-season market (see next chapter).

Finally, both quantitative and qualitative data support the belief that a new rent gap emerged based on rental incomes that act as new potential ground rents. Figure 5 visualizes the difference between monthly income from regular renting in comparison with short-term rental income (measured by the estimated rate of use to capacity plus prices minus fees). Figure 5 highlights that there is a city-wide rent gap which has its highest differences in inner-city districts (up to 300% or roughly 3,000 Euro in inner-city districts).¹¹

Figure 5. The ratio of monthly long-term rental income vs. monthly short-term rental income. Source: Author's calculation and illustration.

Colored map that reveals the large differences between rent incomes out of classical long-term renting vs. short-term renting.

Interviewed Airbnb hosts have confirmed this quantitative finding by stating that they actively shift housing from the regular (long-term) market to the short-term rental market due to the profitability of the latter which enables them to extract more money out of the housing asset. Some professional hosts even mentioned that they have started to offer a mix of properties and rented apartments that they sublet via Airbnb. Once again it has to be underlined that these buy-to-let and rent-to-let landlords are predominantly local actors. In particular, the professional hosts have turned short-term renting into a full-time real estate business that involves different types of subcontractors for cleaning, marketing, booking, etc.

We use a particular software that manages all organizational issues. […] Well, you need to be available 24/7. Therefore, you have to staff and resources that are capable of managing these things. Quality is very important especially in terms of cleaning. Maintenance work has to be done immediately. (A1)

In terms of housing availability, the rent gap is creating a division between short-term users and local tenants. Possibilities for local tenants are decreasing rapidly and the fact that neighborhoods will most probably change in terms of socio-demographic structure and infrastructure. This includes an increasing rate of underused housing units since Airbnb listings are not booked 365 days a year and have a rather dynamic occupancy structure which can change suddenly. In fact, flexibility is one of the key issues regarding short-term rentals as Airbnb hosts can decide on the best rent-extracting option. The following citations reveal the application of this argument.

Well, we don’t want permanent renters. We let these flats to tenants three month at most simply because we do not want permanent tenants to start settling down and having a social life. (A6)

If you can earn four times as much as you can with regular renting, you don’t give a toss if the apartment is vacant for six months. (A5)

Variegated features of touristification

There is no more mid-season. Some years ago, there were fewer tourists in January and February and even in the autumn we got some rest. Now tourists come all year round. It has become unbearable. And I’ve noticed that I start to get angry with tourists. (Resident of an inner-city district of Salzburg)¹²

Figure 1 and the above-mentioned citation highlight the large increase in tourist numbers in recent years. In 2018, Salzburg recorded more than 3 million overnight stays, about 6-8 million daily visitors and almost 54,000 tourist buses (Salzburg, 2019, pp. 6–11). Since most tourist sites are placed in inner-city areas there is a huge concentration of tourist groups and tourist infrastructure in the city center. However, the municipality has actively supported the arrival of mass tourism for a very long time. In fact, tourist buses had to pay only 24 Euro for parking until 2019 which has recently sparked critical debates on overtourism (Neuhold, 2018).

At the same time, the number of permanent inhabitants in inner-city areas (the old town) has fallen by 15% since 2008 while the whole city gained an increase of 3% within the same period. Therefore, displacement and touristification seem to be two related elements of the same process.

According to Zhang and He (2018), displacement is a complex set of mainly long-term and hidden processes. Quite often displacement comprises different forms of direct and indirect displacement over a certain period. In the case of Salzburg’s city center, direct and residential displacement (out-migration due to house prices, change of tenant structure and contracts) is interlinked with place-based or non-residential displacement (closing of local food stores, diffusion of souvenir shops or tourist infrastructure, loss of collective memories and public spaces). Short-term rentals are part of this displacement process but enlarge the “classical displacement zone” spatially (to formerly non-tourist districts) as shown above and these factors are pushing or relocating the tourist frontier since tourists are (often for the first time) entering residential zones, ordinary houses and apartments.

Well, I can only sleep with earplugs, because these two food stores are open 7 days a week and everybody is buying the same things. Tourists buy a pack of original Salzburger Mozartkugeln and a classic sandwich with sausages. Then they sit down on the sidewalk, eat it and leave a lot of garbage behind. (Resident of the old town, 167, 5).

Well, there are problems due to Airbnb. Several apartments have a terrace in the courtyard. It has been quite easy with our long-term neighbors to come to agreements on how and when to use it. But it is virtually impossible to get a deal with short-term renters since they stay only a few days and then they are gone. (Resident of an inner-city district AG, 503,4)

Regulating or supporting urban tourism and short-term rentals? Contradictory approaches of urban-regional governance in the case of Salzburg

Meanwhile, gentrification is not a publicly discussed issue in Salzburg. More attention has been paid to the dramatic increase in tourist numbers. Until the outbreak of the Corona pandemic local and national media discussed the impact of overtourism on the urban fabric vividly (Neuhold, 2018; Schenker, 2019). Two recent studies indicate that only Venice and Dubrovnik have a higher overnight stay-to-inhabitants ratio in Europe (Berger, 2015, p. 16; 2018).¹³ However, the newly initiated public discourse on over-tourism barely scrutinizes the general conditions of urban tourism nor does it question the meaning of being a tourist city. It is a debate dominated by local and regional business actors and lobby groups that tries to adjust the outcomes of mass tourism without changing the structural meaning of tourism (in Salzburg). In fact, both studies have been commissioned by the Austrian hotelier association and use the UN-initiated debate on over-tourism to call for “sustainable tourist growth” (Berger, 2018, p. 2).

The municipality supports urban tourism both strategically and financially. However, in contrast to many other European tourist cities (Sequera & Nofre, 2018) the municipality of Salzburg did not need to envision a tourism-boosting strategy since tourism has been a cornerstone of the local economy and local identity since the late twentieth century. Boosting strategies can be found at the regional scale as tourism is part of the Tourism 2020 strategy (Salzburg, 2013). At the city-scale, an urban tourism concept is completely missing which symbolizes the rather passive position of the municipality of Salzburg in terms of supporting, guiding, or regulating urban tourism. However, this “laissez-faire approach” still has led to a deepening of touristification due to different global pressures (e.g. increased mobility patterns and a dramatic increase in urban tourism) on the one hand. On the other hand, the strategic orientation of the city of Salzburg is dominated by strong local business groups that are advancing festivalization following the municipal government. E.g. private local businesses corporations are in charge of all major public city festivals. Moreover, they have founded an organization called “Altstadt Verband Salzburg” (old town association Salzburg) which is one of the most powerful institutions in the local political economy of Salzburg consisting of more than 1,600 members from the tiny old town district. “Altstadt Verband Salzburg” does city marketing and organizes public and cultural events. Therefore, it receives public funding. It perceives itself as the special interest group of local businesses, local employees, and residents as the website states it.¹⁴ Interestingly, the town council has guaranteed the power of co-decision concerning all kinds of infrastructure to the “Altstadt Verband Salzburg”.¹⁵

To sum up, Salzburg is led by powerful local business groups, a city municipality that focuses almost exclusively on constructional or marketing-oriented measurements to preserve the UNESCO world heritage title and formal and informal arrangements that try to keep the status quo (e.g. urban greenery declaration).

Regulating short-term rentals … 

Nevertheless, there have been some critical debates regarding the destructive impact of Airbnb on Salzburg’s housing market. All major political forces on the regional and urban scale are concerned that short-term rentals will lead to a further increase in house prices in the region and the city of Salzburg. Therefore, regional planning legislation has been adjusted and regulations have been introduced between January 2018 and October 2020. First, Airbnb hosts need a registration number which means that they have to register at a local office. Second, all kinds of tourist housing units need to be approved by the local building authorities. Third, Airbnb hosts must pay an overnight tax and provide the personal data of guests. Additionally, short-term rental platforms such as Airbnb are obliged to provide data concerning Airbnb hosts (Diwald & Mayer, 2020).

Although these measures are trying to regulate short-term rentals, it is too early to conclude the efficiency of these measures and their impact on short-term rentals in Salzburg. The city of Salzburg will start to monitor the actual use of registration numbers by Salzburg’s Airbnb hosts in spring 2022. However, it is rather striking to see that the mentioned regulatory measurements contain several political and legal pitfalls. First, regulations do not affect apartments that were used as short-term rental apartments before 2018 when the regulation came into force. Second, public authorities decided not to declare “residential areas” where short-term is prohibited even though this would have been the most efficient measure taking into account the centralized pattern of tourism and short-term renting in Salzburg. Third, regulations do not take into account Salzburg’s actual short-term rental structure which is dominated by local, entrepreneurial hosts that are often multi-property or single-property owners as this paper has shown. In fact, the adjusted regional planning regulations legalize the majority of Airbnb offers. E.g. if an owner of a multi-family house that has 10–15 apartments declares to have its place of residence in his property, short-term renting is allowed without any restrictions. Additionally, professional and commercial hosts use their expertise and knowledge and can adjust their Airbnb portfolio to new regulations as the following citation indicates.

[…] I have already sold my first short-term apartment which started the Airbnb business because it was located in a condominium of 20 apartments. Regional planning legislation has introduced some constraints concerning multi-apartment houses. (A1)

Consequently, recent regulations will most probably push out home sharers and non-commercial actors as newly introduced regulations by the regional and local planning authorities increase legal procedures that require legal expertise. The paper has illustrated that commercial Airbnb hosts already use specialized lawyers before starting short-term renting. To sum up, recent regulation measures will most probably stop the increase in short-term rentals; however, they favor commercial hosts which could deepen the process of touristification in the case of Salzburg.

Conclusion

Cities all over the world experience growing tension that derives from interlinked processes such as touristification, gentrification and financialization of housing. Short-term rentals seem to be an accelerator to all these processes that pull in or redirect different forms of capital and short-term users on one side and push out long-term residents on the other. Additionally, short-term rentals seem to function as an interface that connects these complementary processes in an age of digital platform capitalism. This means that we need to have a careful consideration of general processes that derive or structure these interconnections beyond case studies. Conceptually speaking the issues of rent, socio-spatial inequality and governance are of utmost importance to provide an advanced critical standpoint in the case of short-term rentals.

Furthermore, the multi-dimensional “housing question” offers the possibility to discuss issues such as social inequality, the political economy of housing, social reproduction and social welfare in terms of STR under one common conceptual roof.

This paper has shown how these processes interfere with each other in one of the most touristified cities in Europe. By using a mixed-methods approach I argue that short-term rentals create a new short-term rent gap based on rental incomes that act as new potential ground rents. All kinds of interviewed Airbnb hosts are aware of this dynamic potential that the majority is using for the extraction of surplus value. Additionally, this paper highlights how Airbnb hosts are actively shifting housing from the regular (long-term) market to the short-term rental market – a process that might intensify in the future as there are many vacant or underused homes due to speculative and/or financial reasons in Salzburg. Local commercial (entrepreneurial) providers dominate Salzburg’s Airbnb market particularly. They are determining a new platform real estate market that involves a whole range of subcontractors and legal advisors. This illustrates the idea that a renter class is emerging that shares and uses technological tools and social networks to maximize the rent. In the case of Salzburg, this social group is constituted and characterized by a mixture of business interests, social positioning and private property. Furthermore, the platform Airbnb is enforcing this tendency as it stimulates competition among Airbnb hosts and rewards “professional” behavior. Additionally, Airbnb invites and supports hosts to start or do grassroots lobbying which again strengthens or constructs the belonging to a particular social group.

The platform itself is extracting a global platform rent which is based on the ownership of data and on the creation of new data products for different kinds of real estate actors secured by international legal standards (Pistor, 2020; Sadowski, 2020).

Socio-spatial consequences of these developments remain an important area for future research. This paper has illustrated first insights that e.g. short-term rentals have an impact on the local housing market. Depending on the chosen threshold 50–80% of the entire listings are permanently withdrawn from the regular housing market since they are booked and listed from between 4 and 8 months per year. Furthermore, an ongoing household survey among local residents conducted by the author in two inner-city districts of Salzburg has revealed that 40% of the respondents regularly meet tourists on their staircases. The case of Salzburg illustrates that direct and indirect forms of gentrification occur as well. This includes displacement pressure in residential zones outside of the classical tourist hotspots and new economic barriers for lower- and middle-income groups to enter an already tight housing market.

The local political economy of short-term rentals gets amplified due to an ongoing touristification that is borne by business groups and a municipality which supports festivalization and lacks a proper urban vision beyond urban tourism. Moreover, recent regulations by regional and local planning authorities focus on non-commercial Airbnb hosts and introduce reasonable legal procedures, but do not address the commercial structure of Airbnb in the case of Salzburg.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The definition of financialization Ben Fine (2013) captures another important aspect of financialization as he stresses “the intensive and extensive accumulation of fictitious capital or, in other words, the increasing scope and prevalence of IBC [interest bearing capital] in the accumulation of capital” (2013, p. 55).

2 In this paper Haila listed three essential research questions related to rent theory: “A. How does (the substance of) rent emerge? B. Who or what are its agents, what are their behavioural patterns and mutual social relations, for example, who receives rent? C. What is the economic role of rent, for example, what is its role in accumulation and coordination?” (1990, p. 276).

3 Recently the Court of Justice of the EU ruled in favor of Airbnb arguing that Airbnb is a simple information society service and not a real estate agent. The Court argued that Airbnb is an intermediation service and, therefore, protected by the EU’s E-Commerce directive from the year 2000 (CURIA, 2019).

4 I would like to thank my colleagues Angela Hof and Karolin Kautzschmann who have been part of our common research project(s). I owe many insights to our common discussions and analyses on this topic. Moreover, I would like to thank Roman Seidl who did the web-scraping that enabled us to map and quantify the Airbnb listings.

5 For a detailed methodological discussion concerning data issues, see Smigiel et al. (2019).

6 The selection of the interviewees is based on three steps. First, we calculated an indicator variable that captures the commercialization of short-term renting in Salzburg. Second, we classified the whole city concerning this indicator. Four types of Airbnb hosts and zones emerged. Third, we used a random generator to have the same number of interviewees in each zone.

7 https://www.stadt-salzburg.at/fileadmin/landingpages/statistik/tourismus/04_april_23_dsgvo.pdf

8 Bookings lead to ratings. The number of ratings is one variable that is needed to calculate the use to capacity of Airbnb apartments. Before doing that, it is necessary to know how many bookings lead to ratings. We calculated that 50% of bookings lead to ratings – a quota which is derived from other projects and sources. The duration of stay is another variable that is needed to calculate the rate of use to capacity. At the end both variables are added and the annual use to capacity comes out. To avoid overestimations the rate of use to capacity is cut at 70%.

9 All translations of original citations have been made by the author.

10 A recent study in Berlin confirms this assumption showing that especially active Airbnb listings lead to an increase in house prices in the neighborhood (Duso et al., 2020, p. 41).

11 The district “Gaisberg” (the most Eastern district of Salzburg city) has to be seen as an exception since it is a hilly area with only very few houses.

12 This citation results from a research project that investigated residents’ perception of short-term rentals/touristification in two selected inner-city case study areas in Salzburg.

13 Salzburg has the highest ratio of overnight stays per inhabitant among European cities that host between 2 and 10 million overnight stays and has been categorized as one of only four tourist cities in Europe facing huge problems with mass tourism.

14 https://www.salzburg-altstadt.at/de/presse/altstadt-verband-salzburg_p_11926

15 https://www.stadt-salzburg.at/index.php?id=42511