Is the AirBnB dream starting to crumble?

Shares for AirBnB have declined in the US market amid potential financial concerns among target customers.

The vacation rental company recently reported a decline of 14% in shares, having disclosed a lower second-quarter profit of $555m, compared to $650m the previous year. While it’s unclear what caused this drop, economic concerns are primarily suspected.

But the company isn’t just struggling in the US. Barcelona has recently banned AirBnBs to help tackle tourism issues, and Edinburgh’s council is cracking down on short term letting. All of this begs the question – is the AirBnB dream dying for those who use it as a chief source of income, or even as a side hustle?

Barcelona bans AirBnBs

In June 2024, Barcelona announced a ban on short term rentals from the end of 2028. This means it will stop issuing new licences to properties and not renew existing permits, so hosts will not have permission to rent their homes out for tourist accommodation.

Around the same time, locals also took to the streets to protest against mass tourism. Residents claim that too many tourists are responsible for ramping up short term housing prices, making city centre apartments unavailable and unaffordable for locals. 

Barcelona’s mayor, Jaume Collboni, stated that the ban was to confront this issue and provide more housing for working and middle-class citizens so they don’t have to leave the city due to unaffordable prices.

Other cities including London, Amsterdam and Paris have limited the number of nights an apartment can be rented annually on the market. Meanwhile, Berlin banned short stay lets of entire homes in 2016.

Edinburgh’s regulations on AirBnB properties

Similar to Barcelona, the city of Edinburgh is also tackling its affordable housing shortage, with the city council introducing a licensing scheme in 2022.

Hosts are required to apply for a licence as part of this scheme, while people who list whole properties on AirBnB also have to apply for planning permission. Anyone who hasn’t applied for a licence but continues to operate can be fined up to £2,500 and banned from applying to the scheme for a year.

Many were opposed to this scheme at the time, and it was ruled “unlawful” by a supreme court judge. Meanwhile, critics deemed it a threat to Scotland’s tourism sector and the broader economy by critics. Holiday let owners also took the council to court over a “de facto ban”, claiming that the scheme was taking out small operators in favour of big businesses.

The scheme was still carried out, though amends were made following the backlash. However, opponents claimed that fundamental issues remained and accused the council of trying to “shut down the sector”. They also claim that confusion was the main reason why few operators applied for a licence and that more legal problems will arise if the council continues to “grant only a handful of secondary let licences through a combination of planning and licensing measures.”

Should you become an AirBnB host in 2024?

While it’s still possible to let your property short term, it’s becoming a lot more challenging if you want to become a full time host.

For example, entire home listings in Greater London have been limited to 90 nights a year, and you’ll need planning permission to host more frequently. You can find out more about rules and regulations on AirBnB’s responsible hosting page. You should also make sure to research short term letting regulations in your local area.

AirBnB hosting is still viable as an occasional side hustle, especially if your home is going to be empty for a few weeks. However, with the latest bans in Barcelona and strict regulations in London and Edinburgh, the tides seem to be turning on AirBnB, so it might be a riskier business model to rely on.

If AirBnB hosting doesn’t work out for you, check out our list of small business ideas for other ways to start your side hustle.