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The impact of COVID-19 on the European short-term rental market

Author

Listed:
  • E. Guglielminetti

    (Bank of Italy, Directorate General for Economics, Statistics and Research)

  • M. Loberto

    (Bank of Italy, Directorate General for Economics, Statistics and Research)

  • A. Mistretta

    (Bank of Italy, Directorate General for Economics, Statistics and Research)

Abstract

The diffusion of COVID-19 and related containment measures practically halted tourism flows, which in many countries generate a significant share of GDP. By leveraging Airbnb data covering the main touristic destinations in Europe, we investigate the impact of the pandemic on the market for short-term rentals up to early 2021. We find that the epidemic reduced dramatically both the supply of apartments available for rents and customers’ demand, with travellers cancelling many reservations and reducing new bookings even many months in advance. Accommodations relying relatively more on foreign tourism were the hardest hit and reacted by cutting prices. By exploiting the different timing of the epidemic spread across Europe and the timelines and intensity of the measures adopted to contain it, we show that government mandated restrictions had a stronger impact than the spread of the infection itself. All in all, our results point to a persistent and heterogeneous impact of COVID-19 on the accommodation industry.

Suggested Citation

  • E. Guglielminetti & M. Loberto & A. Mistretta, 2023. "The impact of COVID-19 on the European short-term rental market," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(3), pages 585-623, August.
    • Handle: RePEc:kap:empiri:v:50:y:2023:i:3:d:10.1007_s10663-023-09576-x
    DOI: 10.1007/s10663-023-09576-x
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    1. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "The Cost of the COVID-19 Crisis: Lockdowns, Macroeconomic Expectations, and Consumer Spending," Department of Economics, Working Paper Series qt4jn1x65h, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    2. Felipe Lozano Rojas & Xuan Jiang & Laura Montenovo & Kosali I. Simon & Bruce A. Weinberg & Coady Wing, 2020. "Is the Cure Worse than the Problem Itself? Immediate Labor Market Effects of COVID-19 Case Rates and School Closures in the U.S," NBER Working Papers 27127, National Bureau of Economic Research, Inc.
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    6. Asger Lau Andersen & Emil Toft Hansen & Niels Johannesen & Adam Sheridan, 2020. "Pandemic, Shutdown and Consumer Spending: Lessons from Scandinavian Policy Responses to COVID-19," Papers 2005.04630, arXiv.org.
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    Cited by:

    1. Valerio Della Corte & Claudio Doria & Giacomo Oddo, 2023. "The impact of COVID‐19 on international tourism flows to Italy: Evidence from mobile phone data," The World Economy, Wiley Blackwell, vol. 46(5), pages 1378-1407, May.
    2. Luigi Infante & Francesca Lilla & Francesco Vercelli, 2023. "The effects of the pandemic on households' financial savings: a Bayesian structural VAR analysis," Temi di discussione (Economic working papers) 1421, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    COVID-19; Lockdown; Airbnb; Tourism; Heckman model;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • Z30 - Other Special Topics - - Tourism Economics - - - General

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