With the new year right around the corner, now’s the ideal time to pause and reflect on the vacation rental industry’s progress over the past 12 months.
So, instead of recapping the top industry news from December for you, this month we’ll be looking at the most important updates spanning the entire year—with the hope of gleaning what might come next.
Summary:
- New legislation designed to alleviate affordable housing shortages was introduced all around the world, with the most famous examples including Maui’s proposal to phase out 7,000 vacation rentals and Barcelona’s short-term rental ban.
- Airbnb has seen consistent—but cooling—growth throughout the year. The company reopened applications for Airbnb Experiences, introduced a new Co-Host Network, and made other key updates for hosts.
- Major events such as the Super Bowl, total solar eclipse, Summer Olympics, and Taylor Swift’s Eras Tour drove vacation rental demand.
- AI continued to feature in the news regularly, with new solutions targeted at trip planning and marijuana detection.
- The industry saw a surprising number of new loyalty programs, including options from Expedia Group, Vrbo, and Journey.
Vacation rental legislation around the world
Legislation is inevitably the first thing that comes to mind when we think of vacation rental industry news in 2024.
As affordable housing shortages continue to plague communities around the world, governments have struck back with legislation of varying types and severity. At the heart of all these efforts is the assumption that vacation rentals are largely responsible for increasing home and rent prices—something that the industry itself has been quick to refute.
While the most famous examples of legislation have come from Barcelona, Maui, and—just within the last couple weeks—Italy, this is truly a global trend. So, let’s take a look at new 2024 legislation from around the world.
North America
As we hinted above, the biggest vacation rental legislation out of the U.S. this year came from Hawaii, which passed a bill in May allowing individual counties to set their own rules related to vacation rentals. Counties now have the ability to designate vacation rentals as nonresidential use for zoning purposes as well as tax, regulate, and even ban them altogether.
Maui was quick to make use of this new liberty, proposing to phase out 7,000 vacation rentals operating in its apartment districts. If passed, the bill would be effective as of July 1, 2025 for vacation rentals in West Maui and as of January 1, 2026 for those in the rest of Maui County.
Eyes have also been on New York City this year in an attempt to assess the impact of its Local Law 18, a near ban on vacation rentals that went into effect in September of 2023. The city approved only 2,242 short-term rental registrations this summer, marking a significant drop from the 40,000 listings that were operating in January of 2023. Despite these strong measures, Airbnb has argued that the law has failed to reverse the city’s affordable housing crisis.
In other North American legislation news:
- California began requiring hosts to include cleaning and other “junk” fees in advertised rates to promote fee transparency, as well as to allow free cancellations for 24 hours after reservation confirmation.
- Five months later, the Federal Trade Commission (FTC) announced a rule that will ban hidden junk fees in advertised rates across the entire country, to go into effect sometime in 2025.
- The Florida Senate and House voted to pass Senate Bill (SB) 280, which proposed to turn local governments’ authority in regulating vacation rentals over to the state. However, Governor Ron DeSantis vetoed the bill once it hit his desk, ensuring control remains with local legislatures.
- In Tennessee, a homeowners association (HOA) sued homeowners operating vacation rentals within its development, citing their rules prohibiting accommodations akin to hotels and motels. A local court ruled that the existing law was too vague to apply to vacation rentals, a decision that the HOA has since appealed and that highlights the need for specific language in legislation.
- A new Short-Term Rental Registration Act went into effect in Nova Scotia, Canada, requiring all vacation rentals to apply for permits, provide specific documentation, and pay annual registration fees (as well as steep fines for noncompliance).
- Mexico City, Mexico passed new restrictions prohibiting accommodations from being rented out on a short-term basis through digital platforms for more than half the year, aiming to balance competition between short-term rentals and hotels.
The United Kingdom
England has stepped up to tackle housing issues as well this year—with varying tactics.
The U.K. Government began the year by announcing reforms to empower local councils in England to regulate short-term rentals. Keeping with this approach, the government also decided to abolish its furnished holiday lettings (FHL) tax regime (effective in April of 2025), removing tax benefits for short-term rental operators.
However, the change of parties after the U.K. General Election in July brought with it a different plan, and new Chancellor Rachel Reeves soon announced measures to accelerate house-building in the U.K. Needless to say, the vacation rental industry saw this as a good sign.
Other 2024 legislation out of the U.K. included the following:
- New reporting rules will require digital platforms—including Aribnb—to collect and share U.K. sellers’ transaction details with the authorities to prevent tax evasion. These rules will apply to hosts who make at least 30 transactions or earn more than £1,735 in a year and will go into effect January 1, 2025.
- The Edinburg City Council reversed its policy requiring short-term let (STL) operators to prove planning permission before receiving a license and stopped issuing three-month suspensions to those who applied without the proper permissions.
- The Welsh county of Gwynedd became the first area in the country to require planning permission to convert a main property into a vacation rental or second home, effective starting September 1, 2024.
Australia
Governments down under implemented some new legislation of their own, including the following:
- The Western Australia Legislative Assembly introduced the WA Short-Term Rental Accommodation Bill 2024, requiring property owners to register their short-term rentals before advertising and accepting bookings and offering a $10,000 grant incentive for owners switching from short- to long-term rentals.
- The Brisbane City Council introduced a new permit requirement for short-term rentals, with plans to transition more than 420 existing properties that fail to meet the new requirements to long-term housing.
- The state of Victoria granted local councils the ability to impose a 7.5% tax on short-term rental bookings of under 28 days, going into effect on January 1.
- The Byron Shire region in the state of New South Wales began enforcing a 60-day annual cap on unhosted short-term rentals.
Europe
The biggest legislation news out of Europe—and perhaps the world—this year is, unsurprisingly, Barcelona’s short-term rental ban.
In June, the city announced plans to ban all tourist flats—defined as residential properties rented for stays of up to 31 days—by November of 2028. This will involve the phasing out of Barcelona’s existing 10,000 short-term rentals as well as a ban on new licenses.
Barcelona’s move has sparked debate world-wide, but it’s not the only major regulation Europe has seen this year. Other European legislation from 2024 includes the following, listed in order of its announcement:
- The European Parliament passed a new law requiring short-term rental platforms to share data with local authorities on a monthly or quarterly basis and conduct random verification checks to prevent illegal listings.
- A court in the Italian region of Tuscany overturned a ban on new short-term rentals in Florence’s historic UNESCO center.
- A national identification code (CIN) went into effect in Italy in September. Short-term rentals are now assigned a CIN through a telematic portal and will face penalties for noncompliance.
- The Portuguese government introduced a new law to revoke some of the restrictions the previous Socialist government implemented, planning to undo mandatory short-term rental license renewals, restrictions on registrations, and the automatic expiry of inactive licenses and give decision-making power back to the municipal courts. However, a local referendum has since been approved, potentially setting the stage for a ban on vacation rentals in residential buildings.
- In Spain, the Supreme Court upheld homeowners associations’ right to ban short-term rentals. Additionally, the government passed a law that will implement a single national register for short-term rentals to address illegal renting and over-tourism.
- A new law in France will reduce tax breaks for nonclassified and furnished tourist accommodations and give local authorities power to set quotas for short-term rentals starting in January of 2025.
- The Madrid City Council unveiled a new plan to restrict short-term rentals in the historic center, allowing them only in entire buildings dedicated to tourism or in existing licensed properties.
- Malaga, Spain implemented restrictions on new vacation rentals in areas where they exceed 8% of residential properties, with additional limitations in neighborhoods at risk of saturation.
- Croatia’s Ministry of Tourism and Sport proposed amendments to the Hospitality Industry Act, including stricter rules for vacation rentals in multidwelling buildings and favorable tax rates for certain rental operators.
- The Hungarian government announced a two-year moratorium on new short-term rental registrations in Budapest, higher taxes on short-term rentals, and stricter regulations effective from January 2025.
- The Romanian government introduced a new draft law that targets unlicensed property owners and platforms like Airbnb and Booking.com, with fines for noncompliance.
- Greece approved a bill that will increase the daily tax on short-term rentals and hotels in the country, from €1.50 to €8 during the peak summer tourism season and from €0.50 to €2 over the winter period.
- Italy announced a country-wide ban on key lock boxes, meaning that vacation rentals will no longer be able to offer self check-in.
Airbnb in 2024
How did Airbnb fare this year? Let’s take a look.
(Cooling) financial growth
Let’s start with financial results: Airbnb reported consistent revenue growth throughout 2024, even announcing its most profitable Q1 ever.
Nevertheless, the company is no longer seeing the rapid expansion it experienced post-COVID, with Q2 revenue growth dropping from 58% in 2022, to 18% in 2023, and finally 11% in 2024. And despite a 10% increase in revenue growth in Q3, the company saw a sharp decline in net income, which fell 37% due to increased marketing expenses and tax charges.
Experiences, Co-Host Network, and more
Airbnb’s new Icons may be the most buzzworthy new offering for guests this year, but when it comes to their updates for hosts, the biggest news is about Experiences and co-hosting.
In September, the company reopened applications for its Experiences program, which enables guests to book tours, classes, and other activities during their trips. This came a year and a half after Airbnb paused the program to focus on its core offerings.
Then, in October, Airbnb introduced a new Co-Host Network to make it easier for hosts to find the support they need. Now, Airbnb hosts can call on a network of more than 10,000 co-hosts across 10 countries, getting assistance with everything from listing setup to booking management and guest communications.
Some of Airbnb’s other top updates for hosts this year included:
- Removal of about 5,000 Experiences and tours that don’t meet its standards, which take into account the host’s expertise, the activity’s uniqueness and local relevance, and guests’ ratings and reviews
- Verification of nearly 1.5 million listings across the U.S., Canada, the U.K., Australia, and France, giving them a “verified” badge that helps guests book with confidence
- Release of a new callout for top and bottom homes, highlighting listings in the top 25%, top 1%, and bottom 10% globally based on ratings, reviews, and reliability
- Removal of 300,000 low-quality listings since launching its updated hosting quality system in 2023—the most removals they’ve ever made.
Events drove demand
Another major trend this year: events driving vacation rental demand. From natural phenomena to “tour tourism” and beyond, people were not opposed to traveling for events this year—and vacation rentals came out winning.
Here are some highlights of this trend:
- The Super Bowl drove a 180% increase in revenue for Las Vegas vacation rentals.
- April’s total solar eclipse drove bookings, average daily rates (ADR), and revenue per available room (RevPAR) in the U.S. cities along its path. To give you an idea, in Waco, Texas, occupancy increased by 171%, ADR by 85%, and RevPAR by 394%.
- ADR for Paris vacation rentals spiked by 400% during the Summer Olympics, which also drove longer stay lengths.
- During Taylor Swift’s Eras Tour dates in Paris, Expedia recorded a 40% increase in stays on its American platform, and 20-30% of attendees at Taylor Swift’s four Paris concerts were American. These numbers highlight Americans’ willingness to travel abroad for bucket list-worthy events.
Of course, these events also proved a learning lesson for hosts and the industry at large—particularly in the case of the Paris Olympics. There was such an influx of new vacation rentals looking to capitalize on the Olympic Games that it led to an excess of supply, causing a 24% drop in revPAR and and a 4.9% drop in occupancy for the summer period overall.
So, what insights can hosts take into next year? First, to ensure there will be enough demand after a given event to warrant setting up shop. And second, to take advantage of dynamic pricing tools to make the most of events and the potential revenue growth!
Interested in using dynamic pricing to capitalize on events? Check out Lodgify Dynamic Pricing.
AI in the news
Artificial intelligence (AI) was the trend of 2023, as ChatGPT and other new solutions made waves in the vacation rental industry and beyond. In 2024, it’s gone from a hot topic to the new norm, with innovative uses for AI being released regularly.
Here are some of the top new AI solutions for the travel industry released in 2024:
- Google rolled out an updated version of its AI chatbot Gemini Advanced, which can now use spatial data and reasoning to make decisions and prioritize when planning trip itineraries.
- Expedia Group unveiled its new AI-powered trip planning tool Romie, which helps with researching, planning, booking, providing recommendations and personal advice, and shopping throughout your entire trip.
- Privacy-safe property operations platform Minut launched an AI-powered smoke detection feature that identifies both marijuana and tobacco.
But it hasn’t all been good news: Online travel scams are also on the rise thanks to the use of AI, serving as a reminder of the technology’s power for both good and bad.
Want to try out an AI-powered messaging tool? All Lodgify customers have access to our cutting-edge AI Assistant, which offers intuitive responses to guest inquiries and requests to streamline your interactions.
A spike in loyalty (programs)
This last one probably isn’t a trend you’ve heard much about, but we couldn’t help but notice a surprising number of new loyalty programs and partnerships in the travel industry this year. More specifically:
- Alaska Airlines leveraged its partnership with Expedia Group to launch Stays by Alaska Vacations, a platform that enables its loyalty program members to explore, book, and earn and redeem miles for vacation rentals and hotels.
- JetBlue partnered with Vrbo, enabling customers to use Paisly (JetBlue’s booking site for nonflight-related travel) to book trip elements through the OTA.
- Expedia Group launched its flexible loyalty program One Key in the United Kingdom. It’s now available for U.K. travelers to book eligible vacation rentals, hotels, flights, car rentals, and activities via Expedia, Vrbo, and Hotels.com.
- Expedia partnered with Microsoft Bing to enable travelers to earn both Microsoft Rewards and rewards through Expedia Group’s brands when they book eligible accommodations on Bing.
- Travel rewards platform Journey launched the first-ever rewards program focused specifically on vacation rentals and boutique hotels. The platform will enable travelers to earn points for direct bookings and access perks, while also providing operators with AI-driven marketing tools to enhance guest experiences and attract repeat visitors.
Why all the interest in rewards programs? It seems that travel booking platforms are more interested than ever in capturing repeat customers and driving brand loyalty—something you can never have enough of.
While a full rewards program may be a bit much for your individual business, there are plenty of ways you can drive repeat bookings for your vacation rental. Check out our webinar on How to Build Guest Loyalty and Secure Repeat Bookings for helpful tips!
See you next year!
2024 has been a busy year for the vacation rental industry: Between navigating changing legislation and making the most of new offerings, events, and more, hosts and property managers have certainly been kept on their toes.
The good news: Innovative new tech solutions continue to make it easier than ever to manage your operations—a trend that’s sure to stick around in 2025.
Speaking of which, for those of you who haven’t experienced Lodgify yet, now’s a great time to give us a try and start the new year off on the right foot. Sign up for a free seven-day trial or book a demo call with one of our experts here to get started!