The impact of Covid-19 on the european short-term rental market

Abstract

The spread of Covid-19 and the related containment measures practically halted tourism flows, which in many countries generate a significant share of GDP. By exploiting Airbnb data covering the main tourist 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 dramatically reduced both the supply of apartments available for rent and customers’ demand, up to 9 months ahead. Accommodation more exposed to foreign tourism was the hardest hit and owners reacted by cutting prices with results that were mainly driven by government-mandated restrictions. All in all, our findings point to a relevant but uneven impact of Covid-19 on the accommodation sector.

Keywords: Covid-19, Airbnb, tourism, travel activities, lockdown

JEL Classification: L83, L85, R20, R30, Z30