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Urbanisation

Five reasons why we need to talk about overtourism

According to the European Parliament, overtourism happens when "the impact of tourism exceeds physical, ecological, social, economic, psychological, and/or political capacity thresholds" in a place. Last week, Prof. Claire Colomb and Dr Edward Kung joined a WBEF webinar to explain what that means and how it manifests.

World Built Environment Forum
24 June 2020

It exacerbates existing local tensions

Residents of the world’s most visited cities tend to have a sixth sense for those sites and attractions best avoided during busy periods. Only the hardiest souls brave the madness of Times Square, Las Ramblas or Regent Street during peak hours. But, in recent years, a new type of tourist, with a new set of priorities, has emerged. Increasingly, visitors in search of an “authentic” local experience are seeking out cities’ “hidden gems”. In doing so, they are venturing beyond the usual tourist sites, and into neighbourhoods unused to, and ill prepared for, large influxes of people.

Says Prof. Claire Colomb, “More and more, tourists want to experience ‘normal neighbourhoods’ – multicultural districts, vibrant neighbourhoods where students live, where there is a nightlife. This has led scholars to talk about tourism ‘off the beaten track.’ One might even use Airbnb’s motto: ‘Live like a local.’ What this means is that you now have large numbers of visitors going to neighbourhoods which were not previously tourist sites. This development has brought with it new conflicts and tensions with local residents and workers. Tourism fuels changing a demand for particular goods and services, leading to changing land and building uses. This puts pressure on traditional businesses, and residents may feel aggrieved by what they see as the changing fabric of their neighbourhood.”   

The AirBnB effect: How tourism is disrupting cities

Building out from the imminent RICS Research Trust paper, the seminar looks at how greater volumes of people visiting the world’s tourist hotspots is adding pressure on infrastructure, causing real estate markets to overheat and detrimentally affecting liveability levels.

It inflates the housing market

Airbnb is far from the only short-term rental platform available to the world’s tourists. Nonetheless, its status as market leader is undisputed and borne out by the numbers. With 7 million listings in 100,000 cities and ambitions to serve 1 billion guests annually by 2028, the company is an integral player in the modern tourist accommodation revolution.    

“Airbnb has more rooms for rent than the three largest hotel chains combined,” says Dr Edward Kung. “There’s a growing body of scientific literature that seems to be pointing in the same direction: short term rentals are causally associated with increased property values and rental prices. The evidence appears to be consistent across a number of different statistical approaches. Another consistent finding is that different places are exposed differently. Places with high tourism demand and with more renters seem to be more greatly affected. The economic theory is pretty simple. These platforms make it easier for the owners of properties that may have been rented out to long-term residents, to instead allocate them to the short-term rental market. That leads to a reduction in supply in the long-term rental market which serves local residents; and increased supply in the short-term market which serves visitors.”

There’s a growing body of scientific literature that seems to be pointing in the same direction: short term rentals are causally associated with increased property values and rental prices.

Dr Edward Kung
California State University

It’s not necessarily good for local economies…

The Covid-19 pandemic has prompted what Dr Kung describes as “a direct, exogenous shut down of tourism like we’ve never seen.” In many parts of the world, this has exposed an over reliance on tourism revenues, and extreme economic vulnerability to events which disrupt global mobility.

And, according to Prof. Colomb, this exposure has profoundly unsettled Europe’s tourist hubs. “In cities where tourism represents 10, 20, 30% of the local gross domestic product there’s a sense of panic. In some cases, the desire is to return to the old situation, without worrying too much about some of the previous critiques of economic overdependency on tourism. But then you have exactly the opposite attitude coming from some citizens groups or municipal governments with more left-wing or green political leanings. They’re saying we should use this opportunity to rethink our approach to tourism, both in terms of quantity and quality. There have been discussions about investing in more sustainable and equitable forms of tourism, and about rebalancing the interests of visitors with those of residents and workers of a city. The recently developed Strategic Tourism Plan 2020 of Barcelona is an example of good practice. It’s also resurrecting discussions that have been going on for decades in places like Venice about diversifying economies dominated by tourism. But these discussions are very complicated, and no easy solution has yet been found.”

Discussions have been going on for decades in places like Venice about diversifying economies dominated by tourism. No easy solution has yet been found.

Prof. Claire Colomb
University College London

…and the revenues it does raise aren’t always reinvested wisely

“There is some evidence that Airbnb is positively correlated with local business performance,” notes Dr Kung. “But I don’t know of any very rigorous evidence to suggest at what rate revenues generated from home sharing are reinvested in the local economy. Recently, cities have had much more success in collecting occupancy taxes from hosts – the platforms have been co-operating with cities.”

Seemingly good news: cities increasingly able to capture the value of short-term rentals will be increasingly able to fund social and public infrastructure.

Perhaps not. Prof. Colomb tells a cautionary tale. “In Barcelona, there’s been a huge debate. A tourist tax – a small amount of money per bed, per night – was imposed. But it turned out that the money was reinvested in funding marketing for more tourism. This does not help to address the adverse impacts of tourism on the city’s spaces, services and inhabitants.”

It can lead people to feel displaced in their own city

The combined effect of the above factors has been an increase in the number of people who feel estranged in the cities they call home. This is surely what inspired the inclusion of the word “psychological” in the European Parliament’s definition of overtourism.

High concentrations of visitors can disturb daily life in the form of traffic congestion, noise, litter, overcrowding, crime and disorderly behaviour, air pollution. Beyond those issues, says Prof. Colomb, “In recent years the concept of gentrification has been expanded to include what is called ‘touristification.’ That includes the transformation of both retail and housing markets, as well as changes in public spaces. Some residents may decide to leave a neighbourhood because they feel the quality of life has become unbearable with the vast presence of visitors occupying public spaces. There is interesting work looking at not only the economic and housing dimension of tourism-induced displacement of people and activities, but also at the psychological cost of feeling alienated in one’s own neighbourhood. It’s something you hear a lot when you interview residents of Venice, Barcelona or Prague.”

  • Prof. Claire Colomb is Professor of Urban Studies and Planning at the Bartlett School of Planning, University College London (UCL)
  • Dr Edward Kung is Assistant Professor of Economics at David Nazarian College of Business and Economics, California State University, Northridge