Weekly round up - Real Estate
EU Court determines Airbnb as an online service and not a property broker
The Court of Justice of the European Union (CJEU) has determined that Airbnb does not require an estate agent’s license to operate in France. The French tourism association took Airbnb to court as they argued that Airbnb does not comply with French property laws and was acting as an estate agent without holding the required licenses.
The court’s determination was based on Airbnb being an “information society service*” rather than a property broker. This means that the firm will avoid certain taxation and regulatory responsibilities which traditional estate agents hold and will be able to continue to operate as an e-commerce platform.
The court based its decision on the following bases:
Airbnb is not an “ancillary or add-on to a wider property business
Property owners were able to offer their homes through other channels
Airbnb does not set a cap on the rent charged by home-owners
In 2017, Uber faced a different outcome as they were not classified as an “information society service”. This as Airbnb has a much less of an influence on its platform than Uber. Uber sets its prices and assigns passengers to drivers, whilst Airbnb does not determine the price or accommodation which its clients opt for.
This is a significant victory for Airbnb as this will now set the precedent for any other EU country to try and set property laws against the firm, although this is unlikely to be the end of the dispute. The EU Commission is working hard on introducing new regulatory rules on e-commerce and online businesses.
* information society service is part of the EU e-Commerce Directive set out in 2000 which “Removes obstacles to cross-border online services in the EU and provide legal certainty to business and citizens”.
For the full report see - https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32000L0031&from=EN
Changing Nature of Hotels
Hotels are adapting to modern-day demands. Below are outlined a few strategies which hotels are adapting to.
Smaller rooms which are most applicable to city centres hotels. Guests do not intend to spend much of their time in their hotel room. They are more likely to come to the city to explore or come for a business trip. By decreasing the room size, hotels have the opportunity to create more social and communal spaces whether that be by adding a second bar or creating wellness facilities.
Changing dynamics of communal areas. Hotels traditionally separate their bar, restaurant and lobby areas. These days, they are increasingly being merged. This gives a more informal vibe whilst the hotel can benefit from providing several services to their guests and members. One downside could be for guests that would like to come for “dinner only” which might make it an overwhelming experience for them. This only increases the need for operators to optimise their layout.
Hotel being part of the local community. Another aspect hotels are contributing to is their local community. They are appreciating the role of the stakeholders and not only of their shareholders. Hotels appreciate the increasing consciousness of their guests and are more pro-active in their part to help out. Whether that be by introducing eco-friendly facilities, allowing by-passers to use their café area or even getting involved and helping out with local charities.
London sees top spot for Europe’s Hotel Pipeline
A recent report by Lodging Econometrics (LE) suggests that regardless of the Brexit uncertainty, London will remain at the top of the hotel pipeline for the coming years. German cities including Dusseldorf, Frankfurt and Munich, as well as European cities Paris, Lisbon and Moscow are also experiencing an increase in their development pipelines.
Marriott International is the leading franchise in terms of numbers under construction, with Accor, Hilton and IHG following suit.
LE suggests that growth is mainly part due to the growth of the major brands acquiring smaller brands as well as their creation of smaller brands as they look to strengthen their portfolios in the coming decade.