EU Reaches Common Position on Short-Term Rental Regulation

Uvika Wahi

EU Reaches Common Position on Short-Term Rental Regulation

On Thursday, March 2, the European Ministers for Competitiveness agreed on a plan to regulate how data is collected and shared for short-term accommodation rental services. They reached a common position to harmonize registration requirements for hosts and their short-term rental properties across the 27 EU countries.

According to Ebba Busch, Swedish Minister for Energy, Business and Industry and Deputy Prime Minister, “This is a good example of how we can create more transparent and fair conditions in the sharing economy.” Hosts will now receive a unique registration number upon completion of registration, which must be displayed on rental platforms. Online platforms such as Airbnb and Booking.com will also have to check whether the numbers are correct and can be asked to delist non-compliant hosts.

The E.U. is driving more transparency in the short-term rental market

Airbnb has implemented changes in the US due to social media pressure, while the push for transparency in the European Union has been driven by strong consumer and competition laws. In the EU, Airbnb is required to display “total stay prices” since 2019 and all listings must indicate whether a host is an “individual” or “professional”

Consumer rights laws also usually go further than in the US. However, the EU also wants to act as an ally of small and big platforms by simplifying local regulations throughout its 27 countries to make it an efficient common market with the same rules for consumers and platforms across the continent.

What are the key points of this common position on EU-wide Short-Term Rental regulations?

The European Union is implementing new regulations for short-term rentals to create a more efficient and regulated marketplace. These measures aim to promote transparency, reduce fraud, and ensure compliance with relevant laws. Here are the key aspects of the new regulations:

1. Single Digital Entry Point

EU countries will set up a single digital entry point for data transmission between short-term rental platforms like Airbnb and public authorities. This will simplify the process of providing necessary information to regulate the industry.

2. Mandatory Registration Numbers

All vacation rentals will have a registration number, which online platforms will use to perform random checks to ensure accurate information. Data handling must comply with European data protection rules.

3. Simplified Processes

The implementation of a single digital entry point and mandatory registration numbers for vacation rentals will simplify the process for hosts and short-term rental platforms like Airbnb. This will enable them to provide necessary information to public authorities in a more streamlined manner, making it easier to regulate the industry. By ensuring compliance with relevant laws, these regulations promote fair competition between short-term rentals and hotels, creating a level playing field. Additionally, by requiring accurate information from hosts and performing random checks, the new regulations aim to reduce fraud within the industry.

4. Clear Information on Registration Procedures

To ensure compliance with new regulations, member states will provide clear and concise information on registration procedures and requirements for short-term rental services within their respective territories. This will help hosts, citizens, platforms, and authorities understand relevant laws and promote transparency within the industry.

Context: EU Aims to Simplify Regulations for Short-Term Rental Platforms by Making Small Host Data More Visible

  • The short-term rental market in Europe is complex and fragmented, with varying regulations and restrictions from city to city and country to country.
  • Smaller companies often struggle to navigate these challenges, while larger platforms like Airbnb and Booking.com have the resources to do so.
  • The European Commission proposed a new regulation on November 2, 2022, aimed at enhancing transparency for short-term accommodation rentals and supporting sustainable tourism development.
  • This proposal is part of the EU’s Short-Term Rental Initiative, which aims to simplify processes for hosts, platforms, and local authorities while promoting fair competition and reducing fraud.
  • The regulation primarily targets individual hosts rather than property management companies since they may be unsure about which regulations apply to them.
  • To streamline this process, the EU is targeting larger platforms where small hosts register while calling for countries to unify their data requirements for hosts.
  • These new regulations have the potential to significantly impact the short-term rental market in Europe.

New Framework Aims for More Transparency and Fairness

On November 2, 2022, the European Commission proposed a new framework aimed at simplifying processes for platforms, hosts, and local authorities. The objective is to promote transparency in short-term accommodation rentals and facilitate their sustainable development within the tourism industry.

Creating a Unique Host Registry Across the E.U.

The proposed regulation aims to harmonize registration requirements for hosts and their short-term rental properties across the European Union. This will involve creating a unique Host registry that registers hosts and their properties when introduced by national authorities. Registration schemes will have to be fully online and user-friendly, requiring hosts to provide relevant information such as “who”, “what” and “where”. Upon completion of registration, hosts will receive a unique registration number.

Clarifying Rules to Ensure Registration Numbers Are Displayed on Short-Term Rental Platforms

Online platforms facilitating short-term rentals will have to ensure that registered hosts display their unique registration numbers on their platforms. The regulation also requires platforms to check whether hosts register and display correct numbers randomly. Public authorities will be able to suspend registration numbers and ask platforms to delist non-compliant hosts.

Streamlining Data Sharing Between Online Platforms and Public Authorities

Under this proposal, online platforms facilitating short-term rentals will have to share data about the number of rented nights and guests with public authorities once a month in an automated way. Lighter reporting possibilities are foreseen for small and micro platforms. Public authorities will be able to receive this data through national ‘single digital entry points,’ which aim to support well-targeted policymaking.

Allowing the Reuse of Data in Aggregate Form

Data generated under this proposal can contribute in aggregate form towards tourism statistics produced by Eurostat, which can feed into the upcoming European data space for tourism. This information is expected to support the development of innovative tourism-related services.

Establishing an Effective Framework of Implementation

Member States will monitor the implementation of this transparency framework, putting in place relevant penalties for non-compliance with its obligations. The aim is to establish an effective framework for implementing these regulations uniformly across all member states of the EU.

In conclusion, the EU has reached a common position on Short-Term Rental regulation with key points including the implementation of a single digital entry point, mandatory registration numbers, simplified processes, and clear information on registration procedures. This new approach aims to simplify regulations for Short-Term Rental platforms by making small host data more visible. With these changes in place, it is hoped that Short-Term Rental platforms will become more transparent and easier to navigate for both hosts and guests alike. Overall, this common position marks an important step forward in regulating the rapidly growing Short-Term Rental market in the EU.

Get the most important short-term rental news and insights straight to your inbox, for FREE.

Subscribe to our newsletter using the form below.