Airbnb, the online marketplace and hospitality service enabling people to rent short-term lodgings, is under scrutiny by local tax authorities in many countries. The fast success of the platform has created distortions in the real estate market in major cities globally as well as creating new sources of revenue.
Airbnb has made it possible for property owners to generate profits by renting their assets for short periods of time and for tenants to reduce their rents by sub-letting their units. In cities or areas which are in high demand, this phenomenon has taken on a more important dimension with the emergence of new investors attracted to this lucrative market. Yields for these short-term rents can reach almost three times the amount of a long-term rent, especially for small surfaces located in tourist destinations. These new buyers do not hesitate to overpay their assets taking into consideration the double-digit yield they can get by renting them through Airbnb.
This situation is creating distortions in the market. Traditional residential buyers cannot compete with these new investors to acquire assets available for sale, meaning that these properties will disappear from the traditional renting market. Rents are also following that upward trend, tenants are willing to pay extra because they integrate the assumption that they will be able to generate extra cash by sub-letting their flat. So far there are limited studies to quantify this impact - many other factors contribute to the real estate market - but there is no doubt that Airbnb is putting more pressure on prices. Another consequence of this trend is being felt in the hospitality sector. Major players have been complaining about this unfair competition which is eroding their revenue.
The main risk is for cities that are watching their inhabitants leave and the conversion of their city centres into tourist accommodation. The large flow of tourists also has a negative impact on neighbourhoods by creating nuisances such as noise pollution and uncivil behaviour. Another aspect is that the retail landscapes are changing quickly with the arrival of new shops dedicated to the more lucrative tourist segment, offering bike rentals, fast-food restaurants, souvenirs, etc. A large chunk of the traditional businesses dedicated to residents are suffering from this change in consumption. This is a new step in the gentrification process which started in many large cities across Europe at the beginning of the 1950s.
Following an observation period, local and national authorities have taken measures to supervise the development of Airbnb and its peers by introducing new rules. The most common and powerful one is to restrain rental duration, for instance 90 days in London or 60 days in Amsterdam. In France, the leading country by number of tourist arrivals, many cities have taken such measures. After Paris introduced a limitation this spring, Bordeaux has been the last one to act, forcing property owners to register at the town hall to make sure they observe a 120-day cap on short-term renting. This decision was expected; the city has become a victim of its own success. Bordeaux has not only become very fashionable in France but is recognised as one of the most attractive cities globally by many opinion leaders.
More constraints are on their way globally, governments could not let this new business prosper without getting a slice of it. All revenues made by these collaborative platforms will be declared to tax offices and taxes will be paid. These measures will make short-term renting less attractive and cool current real estate speculation. Even if new regulations calm things down, new disruptive innovations have replaced traditional services and changed consumption habits for good.
Sebastien Henin is the managing director and head of wealth management at Alienor Capital
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Profile Box
Company/date started: 2015
Founder/CEO: Mohammed Toraif
Based: Manama, Bahrain
Sector: Sales, Technology, Conservation
Size: (employees/revenue) 4/ 5,000 downloads
Stage: 1 ($100,000)
Investors: Two first-round investors including, 500 Startups, Fawaz Al Gosaibi Holding (Saudi Arabia)
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Company%20Profile
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
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Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
Honeymoonish
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Race card
5pm: Handicap (PA) Dh80,000 (Turf) 1,600m; 5.30pm: Maiden (PA) Dh80,000 (T) 1,400m
6pm: Handicap (PA) Dh80,000 (T) 1,400m; 6.30pm: Handicap (PA) Dh80,000 (T) 1,200m
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m
7.30pm: Handicap (TB) Dh100,000 (PA) 1,400m
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Tickets
Tickets start at Dh100 for adults, while children can enter free on the opening day. For more information, visit www.mubadalawtc.com.
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Killing of Qassem Suleimani
ITU Abu Dhabi World Triathlon
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Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
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'Operation Mincemeat'
Director: John Madden
Cast: Colin Firth, Matthew Macfayden, Kelly Macdonald and Penelope Wilton
Rating: 4/5
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
THE SPECS
Engine: six-litre W12 twin-turbo
Transmission: eight-speed dual clutch auto
Power: 626bhp
Torque: 900Nm
Price: Dh940,160 (plus VAT)
On sale: Q1 2020
UAE tour of the Netherlands
UAE squad: Rohan Mustafa (captain), Shaiman Anwar, Ghulam Shabber, Mohammed Qasim, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Chirag Suri, Ahmed Raza, Imran Haider, Mohammed Naveed, Amjad Javed, Zahoor Khan, Qadeer Ahmed
Fixtures and results:
Monday, UAE won by three wickets
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match