Summary 5th Ibiza Tourist Housing Convention October 11th
Summary of the presentations and interventions made during the V Congress of Tourist Housing in Ibiza. PHOTOS: Sergio G. Cañizares and Jara Studio.
October 7, 2019 (day 1)
Presentation
The President of AVAT, José Antonio Llano, welcomed the attendees, detailed the program to be held at the Congress and stressed the need for professionalization of the sector. On the other hand, he remarked the existence in Ibiza of an annual congress, which serves as a meeting point for professionals of the sector, owners and representatives of the administration. Finally, he thanked the workshop participants, the sponsors and the institutions (mainly the Consell d'Eivissa and the Santa Eulària Town Hall) for their maximum collaboration for the celebration of the event.
The area director of Banc Sabadell, main sponsor of the event, Óscar Prohens, was proud to inaugurate this congress that closed the 2019 tourism season. A season that began with uncertainty and ended with the bankruptcy of the tour operator Thomas Cook. Prohens praised the congress program and pointed out that the holiday home sector is increasingly aware of its economic importance and also its role in improving environmental management.
The Mayoress of Santa Eulària, Carmen Ferrer, welcomed the attendees to the Centre Cultural de Jesús. She thanked AVAT for maintaining this quality work both in their sector and in the congress, which has reached 5 editions. Ferrer considered it very important to adapt to the new times, differentiate and boost the competitiveness of the sector. He emphasized the spirit of the fight against piracy defended by both the administration and the sector. Finally, he valued very positively the program of the Congress as it addressed the problems of the sector and wished that the congress reached conclusions and sought new objectives.
Finally, the President of the Consell d'Eivissa, Vicent Marí, acknowledged the existence of an important intrusion on the island that the Administration cannot ignore. He linked the serious housing problems the island is experiencing in part to the existing illegal tourist offer. Marí affirmed that the legislation must be enforced and pointed out that during the summer inspections were intensified. He also informed that all the Responsible Declarations (DRIAT) presented (863 with 6,300 vacancies) would be registered immediately so that they would have the definitive registration number without having to wait any longer. Finally, the President of the Consell advocated an intense collaboration between the institutions and the private sector.
Presentation 1 - Local and regional regulations
The first presentation was moderated by the UIB professor and scientific coordinator of the Congress, Juan Franch Fluxà. The aim of this presentation was to shed light on the diverse regulations existing at all administrative levels.
Jesús Cuartero, from the Consumer Department of the Autonomous Community of the Balearic Islands, pointed out that the General Consumer Law states that it must be clear who is making the product available, its characteristics and the price of the product (taxes and fees included). The EU Package Travel Directive also applies if applicable. Cuartero stressed that special care must be taken when contracting over the Internet, in Europe there is a lot of security but outside "it is very cold". Justice is asking for certain diligence from the consumer, even the Court of Justice of the European Union has spoken of the "average consumer" when carrying out different procedures. Cuartero recalled the code of good practices for the rent-a-car sector, which has worked well in the islands. On the subject of tourist accommodation, it should be the tourist administration or even the sector itself that should create a self-regulation code. Finally, he recalled that the consumer law does not cover contracts if one of the parties is not an entrepreneur.
The President of Fevitur, Tolo Gomila, recalled that his association has called for a national registry of tourist homes, with three legs to deal with: taxation, national security and consumer protection.) In his opinion, the Balearic administration breaks the law in the DRIAT when it uses it as a previous license. Gomila reminded that the General Tourism Law of the Balearic Islands was born in a conjunctural period with many tourists on loan and that the legislation does not allow to control the activity. The President of Fevitur affirmed that we are already on the path of regulatory standardization (tax model 179, police forms, modification of the Law of Urban Leases and the Law of Horizontal Property, etc.). As an example, the hotel sector is also creating its own housing marketing platforms. In his opinion, the percentage of tourist housing is so low that it does not affect the issue of housing and rentals. Gomila demanded that the state administration create the national housing registry and that the National Institute of Statistics provide real metrics on the supply of tourist housing. Gomila advocated seducing owners who have homes to put them on the market by protecting them. Finally, he defended that the city councils are the ones who know their territories best and should participate in the regulations. For Gomila, the Catalan and Valencian regulations are good examples, as is Madrid, leaving open the question of which was the worst.
Terra Urbe's urban planning lawyer, Rafa Encarnacion, said that tourist housing is hyper-regulated (tourism, environment, urban planning, etc.) The city councils had only two options: modify the urban plans or apply the planning by analogy. In his opinion, zoning cannot cover everything. Conditions, mixed uses of zones, etc. have been made. Zoning, in the end, is a funnel rule that leads to judicialization of the issue.
Competition agencies consider that zoning reduces the market. Encarnación pointed out that planning modifications are difficult and cumbersome because of what the Administrations have done is to standardize the use of the dwellings to the hotel tertiary use. In his opinion, the administration should try to favor regulations that are less detrimental to the administrator, detailing that in Valencia a temporary solution has been reached, allowing multi-family dwellings as long as there are internal municipal reports. Registration numbers are not issued even with administrative silence. It is true that in Valencia there is compatibility of use, although it is difficult. Following the CNMC, any decision must be motivated and justified. Restrictions can be based on cultural issues, etc. Total prohibition leads to judicialization, according to the speaker. Finally, he highlighted the serious problem of coordination between administration and platforms.
Finally, the Conseller Gestió del Territori i Lluita contra l'Intrusisme del Consell d'Eivissa, Mariano Juan, defended that the town councils have to decide, it is the most logical thing to do. The compatibility of uses must be decided by the town councils although it is clear that it increases the legislation. Juan, who was previously in municipal politics, pointed out that urban planning changes are extremely difficult. In Ibiza there is a debate on whether tourist housing should be allowed on rural land or not, not only in multi-family houses. Juan emphasized that the Administration must have control instruments, not only personal but also legislative. The very lack of control of the sector provokes a contrary effect in society, creating groups that advocate a total prohibition. As an example, he mentioned the leisure sector, which has been criminalized by some due to the bad practices of a few. For the representative of the Consell, the issue of noise is important along with incivism. The Consell should develop a Plan of Intervention of Tourist Areas and modify the Insular Territorial Plan (PTI), in addition to supporting municipalities in the reform of their urban planning regulations either by making special plans or complete reforms.
Presentation 2 - Environmental sustainability in tourist accommodation
This presentation was coordinated by Sandra Benbeniste, from the Foundation for the Conservation of Ibiza, who explained the Plastic Free Ibiza initiative.
Juan Calvo, from the Water Alliance and the Sustainability Observatory, pointed out the need for efficient housing. He recalled that water is a scarce and finite commodity. We come from a very different scenario, but now we have low water reserves, housing on rural land, greater risk of fires and dry and salinized wells. The data tells us that the highest consumption is in housing, whether urban or rustic. According to Calvo, the priority measures for sustainability would be the reduction of groundwater consumption in rural land dwellings, the priority use of desalinated water for urban supply, domestic savings, improving losses in the supply network, improving sanitation and purification, greater water reuse, etc.
Calvo explained the water saving ordinance of the City Council of Sant Josep:
telematic reading meters, flow reducers, Mediterranean gardens, rainwater harvesting systems.
reuse of gray water, not going all to septic tank, reuse of swimming pool water, closed cooling systems.
Óscar Caro, from Ibiza Sostenible, commented on the goals of the 2030 Agenda, the Sustainable Development Goals (SDGs). Caro highlighted that tourist homes generated 4.4 billion euros in Spain, a large expenditure of stays. He then detailed which of the 17 SDGs are applicable in a guide of good practices for housing. The challenge is to minimize and offset the impact. He considered it very important to draw up a welcome decalogue for tourists, welcome packs with messages for tenants (sustainable bags ....), insist on the messages of cleaning without littering, contracting green energy, saving energy, saving water, 0 km purchases, etc. It is important to offer this information to guests, support environmental initiatives, promote social sustainability and the integration of universal accessibility. Finally, he encouraged the use of renewable energies and the introduction of permaculture.
Joan Tur, CEO of Solsulet, called for greater use of solar energy in holiday homes, as only 2% of electricity production comes from renewable sources. Tur explained the different types of off-grid or stand-alone installations, grid-connected installations to feed energy into the grid and grid-connected installations (with or without storage). In urban areas, panels are usually placed on integrated roofs, while in rustic areas they are on the ground. Tur pointed out a dual use in tourist holiday homes (depending on the partial temporary rental or only temporary rental use). In smaller plots the tourist rental is a bonus for the owner, so the consumption rate per person is lower. In the case of rental only are homes that are usually on rustic land, which have a lot of roof area but is used on the ground, the customer is a high income profile, which results in very high consumption. Finally, Tur explained the different dimensions of the installations as well as the payback and amortization periods.
Álvaro Martínez, from Terravita, explained what needs to be done to ensure that a building uses little energy. He looked at where energy is lost: through transmission or ventilation. He analyzed the passivhaus concept: good insulation, windows with good thermal use, thermal insulation-thermal bridges, airtightness and ventilation. These concepts are not only for new construction, but can also be used in renovation. Martinez explained that the tourism sector is starting to take initiatives, the user demands it and prefers to live in a sustainable home.
Finally, Tom Hoddell, from Mi Casa Tu Casa Ibiza, said that we all have an obligation to the environment, including tourists, but who should lead are the owners, who must take measures both in housing and in the information they provide to tenants. He gave a series of practical, common-sense tips for villas:
Water savings: regular checking of irrigation systems for leaks, flow restrictors, dual flushing mechanism for toilets, clear message to tenants, less lawn, grey and brown water purification, rainwater harvesting.
Reduce energy: LED light bulbs, outdoor lights with timer or motion sensor, reduce air conditioning costs, hot water through solar panels, A+++ appliances, energy efficient air conditioning, heat pump, thermal break windows.
Eliminate plastic: osmosis filters, reusable shopping bags, refillable bathroom products and large containers, better without coffee capsules, clear communication with tenants.
Recycling: explain the use of blue, green and yellow containers, inform the cleaning team, reusable glass bottles...
Presentation 3 - Present and future of tourist distribution
This presentation was coordinated by Roberto San Esteban, from AVAT's Board of Directors.
Nicolas Galantini, from AJL Consulting, spoke of a consolidation of tourism distribution as large operators are making various purchases (Expedia is buying Homeaway, Airbnb have acquired Hotel Tonight and Luxury Retreats, Google is also entering, Marriott is entering with Homes & Villas). 75% of bookings have been made through distribution platforms in 2018. Galantini presented a study where results and prices were valued both island-wide and in the island capital. Accepting instant bookings (50% in Ibiza) means a clear increase in turnover. Revenues, average daily price and average occupancy are higher if the property is in direct distribution. For Galantini, Homeaway is strong in Ibiza although other operators are growing. According to him, distributing on various platforms means more revenue for property managers.
Finally, he wondered what trends the future holds?
Loyalty programs
Technologies that help distribution.
Alexis Barceló, CEO of Abal Consulting, presented a series of tourism data. 1.4 billion tourists in 2018, 82.6 million foreign tourists in Spain, problems issuing markets of Great Britain, Germany and Italy. Demand has stagnated this year while supply has grown by 1633% between 2012 and 2017, clear danger of stagnation. For Barceló, new platforms have shaken the foundations of traditional businesses. We are in the 4th industrial revolution, the technological one. All this evolution implies that a better hospitality service has to be provided ("loving strangers") as it is becoming increasingly difficult to choose. How do I sell it? What do I sell? For how much? You have to understand consumer behavior, learn from neuroscience the inputs the brain uses to make decisions. Value must be generated, the numbers come later. Get to know the guests (nationality, habits, etc.), create more inspiring images, improve amenities ('eco' amenities), etc. It should be analyzed that the economic performance of a property is based on the photography, the website, the rate structure, the graphic communication, etc. Owners must be made aware of the existence of Smart Data. For Barceló, each property has to be marketed differently, its cost structure has to be different. Finally, he stressed the need to monitor the online reputation of the business.
Sponsored speech - The insurance and security of holiday homes
Mariano Esteban, from Mariano Esteban Insurance Agency, explained various forms of insurance: home insurance, civil liability, multi-risk insurance for companies, etc. He explained that for intermediaries it is compulsory to take out activity liability insurance and to include secondary activities such as maintenance, concièrge, etc. On different insurance issues, he answered the attendees' doubts. Regarding security, insurance companies can cover theft, but they usually set limits between 1000 and 1500 euros, sometimes excluding cell phones, etc. Finally, he recommended making it clear that the property is not responsible for theft against the tenant and that the traveler should take out travel insurance directly or indirectly.
Presentation 4 - How to increase the profitability of my tourist property?
This presentation was coordinated by Alex Reyners, from AVAT's Board of Directors.
Chema Herrero, CEO of BedsRevenue, explained that revenue management is a new business DNA/culture based on optimizing not only revenue but also margin. You have to look for profitability and sustainability of the product. This is a professional field, knowledge must be constantly updated, and knowing your customers is not a fad. Herrero pointed out the importance of the globalization of the tourism sector: the air component of the island, growing offers at all levels of products, Internet as a base of operations, billboard effect more accentuated in the vacation home product, challenge of professionalization of managers....
The owner cannot afford not to have an online booking formula. The more professional the sector is, the more demanding the entire chain will be. For him, the client has changed, is looking for new experiences, has more information and is more demanding, so it is very important to listen to the opinion of clients. Herrero presented a revenue management strategy:
PRODUCT is fundamental
CUSTOMER SEGMENTATION, they are all different (last minute, young people, countries, ....).
TIME OF PURCHASE
PRICE. Depending on how much you put and the possibilities of customers.
CHANNEL. Channels have costs.
The right allies for owners are technology and professional outsourcing. The trend of the future is towards one-to-one revenue, knowing as much as possible about customers, creating customer profiles, matching the product to the profile and adjusting prices.
Raúl Castillo, Director of Bookiply in the Balearic Islands, gave a presentation on Bookiply, part of the Holidu group. This company is a channel manager that manages 5,000 properties, 1,200 in the Balearic Islands. There are more and more travelers to more places. It has changed the way of traveling and tourism. The Internet has changed the way we buy tourism. As far as Ibiza is concerned, it is subject to a very strong seasonality, 70% of the activity in 4 months. Guests book 25% in January and February. There are two very clear trends: early bookings and last-minute bookings. For Castillo, it is necessary to ensure that the property is visible and allows early booking, rates and availability should be configured for at least the next 12 months and one year in advance. It is also advisable to set up last-minute discounts for summer vacancies. According to Bookiply's director, the ad should be tailored to demand. 19% of the nights were not bookable (prices not configured, limitation of nights ....), 60% arrive during the week and 40% on weekends. For Castillo, check in and check out should be made more flexible. 35% of reservations are made for stays of less than 6 days; minimum stays should be made more flexible. Set prices based on demand, it is recommended to have between 6 and 10 rates.
VISIBILITY. Being advertised in several portals increases profitability (Airbnb 48%, Booking 29%, Homeaway 12%).
SEARCH FILTERS. Wifi, swimming pool, family friendly, air conditioning, barbecue, TV, parking, pets, garden, dishwasher. Families are a very attractive segment, as they generate an increase in demand in mid and low season. It is advisable to adapt the property for children (safety measures, accessories, cribs, etc.).
IMMEDIATE BOOKING. 40% want to book instantly, which represents a 20% increase in bookings.
Castillo advised to increase the flexibility of the advertisement (minimum stays, adapt check-in and check-out days), increase visibility, adapt rates to demand, attract more tourists by using filters, immediate booking, etc.).
For Domènec Biosca, President of Educatur, profitability is based on 5 concepts:
Good opinion of the sector
Brand of the destination
Business mentality, prestige
Innovation
Job creation
A network of experiences must be created to generate emotion, networking and teamwork. For Biosca, the brain is an emotional inheritance from the ancestors. The emotional map is made of plasticine; innovation must be encouraged. Happiness is being able to choose and know how to resolve conflicts. It is essential to create links, networks, encourage associations and the pride of belonging to a community. Biosca pointed out that the crisis is to arrive late to changes and now the clients want the maximum information to close their trips. The luxury is to surprise, it is necessary to give the client what he wants, "if you are one more, you will be one less". The most important thing is people, not technology. It is managed by example, with generosity. Biosca defended that things must be done with passion, making life difficult, preparing to have the solutions. It is necessary to look for the culture of the leader, we are all tourism. Success depends on going from owner, to entrepreneur and leader.
October 8, 2019 (day 2)
Presentation 5 - Policy proposals for the current legislature.
Vicent Roig, Conseller of Presidency and Environmental Management of the Consell d'Eivissa, moderated this classic table of the Congress where Ibizan politicians expose their proposals for the sector. Roig said it was a luxury to participate and thanked PIMEEF, AVAT, sponsors and institutions for organizing such a high quality congress. For him, it is clear that new forms of tourism have been imposed, which is an opportunity to differentiate, to have a tourism with a different type of consumption. Tourist housing tourism is seen as an opportunity by one part of the population but also as a risk by another (noise, higher housing prices). There is a serious problem of intrusion on the island, so it is very important to fight against those who make us an absolutely unfair competition. For the conseller, it is important to revitalize the countryside. He recalled, on the other hand, that there are obsolete urban planning rules in three municipalities, which influences the capacity of regulation. The Consell is going to unblock those 6000 places that were without a definitive registration number. Finally, Roig wanted to make a reflection on the activities allowed in the houses.
Miguel Tur Contreras, Councillor of Tourism of the Town Hall of Sant Antoni de Portmany, explained the tourist situation of Sant Antoni. He believes that the Strategic Plan that is being carried out will be important for the hotel renovation. In his opinion, it is clear that the expenses made by a holiday home tourist are higher although it generates problems in some cases with the neighbors. Residential housing has moved out of the town, so limits will have to be set in these intensely residential urban areas. In addition, given that there is a lot of hotel supply within the town, it is necessary to think about the neighbors. The town council wants to change the type of tourist that comes, eliminate binge tourism and improve the quality of hotels and housing. Tur Contreras said that it is necessary to seek a balance for urban and tourist issues. Finally, he remarked that the priorities for this legislature will be to change binge tourism and improve the tourist infrastructures of the municipality.
Vicent X. Roselló, Councilman of Tourism of the City Council of Sant Josep de sa Talaia, explained that the extra-hotel accommodation has always been a reality, first without regulation and in a more modest way, but now it is a very powerful and regulated sector. For him, we have to give a great offer and quality without undermining the right of residents. Sant Josep in the zoning prioritized respect between residents and tourists so it only left the marketing in isolated single-family homes. Roselló said that irregular activities in multi-family dwellings should be pursued. In his opinion, an activity that is well regulated does not have to harm anyone. He recognized that the town planning regulations are obsolete and that it is essential to adapt town planning to the current regulations, in addition to the Administration being able to control all the activities. Among all the Administrations, he pointed out, we must be able to adequately regulate the supply; business must be made compatible with access to residential housing. Finally, Roselló defended the concepts of coexistence and regulation.
Miguel Tur Rubio, First Deputy Mayor of the Santa Eulària des Riu Town Council, defended that all the institutions have to agree on the type of tourism they want. Santa Eulària wants to clearly differentiate between residential and tourist uses. Urban centers must have a life of their own, so they should not depend on tourism. Tourist areas are very clearly delimited in their municipality. Tur Rubio clearly stated that they did not want tourists in the multi-family houses and they wanted them in the rustic single-family houses. If one is in favor of tourist housing, as a complementary tourism to the hotel, they must provide and have security, in addition to offering tourist services to users. He defended that the administrations have to provide services to the tourist zones. Tur Contreras ended by defending that the activity must be clear and regulated and the Administration must pursue those who do not provide a good service and carry out a pirate activity.
Aitor Morrás, Second Deputy Mayor and Councilor for Housing of the Town Council of Eivissa, explained that in Ibiza Town there is more urban and tourist pressure on multi-family buildings. He advocated reflecting on whether the right to enjoy the revenues of a private property means a better quality for the residents. For him, there is a problem of coexistence, civil servants do not want to come to the island because of the high cost of housing, there is a problem of access to housing. It is a phenomenon that occurs for various reasons, including the clear increase in the price of rents. Morrás recalled that Article 31 of the Hotel and Catering Agreement, which was repealed, included the provision of housing for seasonal workers. The platforms have worsened the problem and many homes are being occupied not by residents but by seasonal workers or tourists. All this leads to the depopulation of urban centers, as is the case of La Marina, which is mainly dedicated to tourist rentals. This also has a negative impact on trade. Morrás acknowledged that it is very legitimate to get a return on properties but we must analyze the whole of society. People are being expelled from the island because of the high rental prices. Morrás concluded by stating that there is a housing stock that is being used for other activities that are not residential, it would not be necessary to build more.
Presentation 6 - Tourist housing: regulation vs. liberalization
Mª Victoria Torre Sustaeta, Doctor of Law specialized in Competition Law, moderated this presentation and began by pointing out that Competition Law is the guest at all parties since, as the defender of the market, it must ensure its free functioning. In Spain, the body empowered to intervene is the National Commission for Markets and Competition (CNMC). Given that there are legal assets to be protected, the CNMC requires justification for the regulations. The CNMC is aware that there is not only market freedom and that there are other goods that must be guaranteed. Finally, Torre Sustaeta highlighted the strength of the Spanish Tax Administration compared to other administrations, including the competition administration.
Pedro Hinojo, from the Sub-Directorate of Studies and Reports of the CNMC, said that the market must be complemented with good regulation. He reviewed the history of the tourism sector:
Tourist 0.0 - predigital - intermediary - accommodation.
Tourist 1.0 - web - accommodation
Tourist 2.0 - platform - accommodation (3R: rating, review, recommendation), less asymmetric information, more information about accommodations, consumer empowerment, socio-cultural technological factors.
Tourist 3.0 - platform or not - accommodation (prosumer, homesharing, homeswapping).
The regulation of tourist rental has to be different from that of traditional tourism (minor environmental externalities), the price of land is affected in the same way, the price of housing will be more expensive in the short and long term. Hinojo made a brief reference to the report he has made on the regulations of Formentera. This defines the housing for tourist use, speaks of suitable areas (the CNMC does not agree with the territorial contingency), which for the CNMC violates the freedom of enterprise and is not supported by the jurisprudence. Sensitivity to urban planning. The CNMC is totally against the segmentation by maximum limit of vacancies and its distribution by type of accommodation, this is not a transferable right, economic and environmental inefficiency. The requirement of the transfer of housing in its entirety (prohibition of renting rooms, including habitual residence) is not admissible for the CNMC, prohibiting the rental of rooms lacks justification and is counterproductive, less inconvenience for neighbors. The regulation of Formentera does not take advantage, according to the CNMC, of the margin granted by the Balearic law, contingent on short periods of one month. Restricting the rental of permanent housing is the worst thing that can be done. There is also a limit on the number of licenses per operator, the DRIATs have authorizing aspects, and there are many requirements.
A diagnosis must be made, paying special attention to externalities. For Hinojo, regulation must be dynamic and adapted to time and space; taxes can be used to correct externalities. General economic policy measures should be considered.
Mateo Silos, Principal Economist at Ofwat, argued that in many cases regulations do not correspond to the basis of why they should be regulated. In other words, incumbent operators have supported or pushed for regulation to exist. Stiegler defined that the basic resource of the state is coercive power and that agents are rational and maximize their utility. Regulation is a response to the demands of interest groups that seek to maximize their benefits. The interest groups that will control regulation will be those that are best organized, those that have the most to gain, and small groups with strong preferences. Silos recalled that Stigler and Peltzman explain why regulation often favors producers over consumers. Silos defined the costs of regulatory capture: less competition, efficiency and productivity, wasted resources, maintenance of privileges and greater inequality. It leads to clientelism and distrust in capitalism. For him, the regulation of tourist housing is not justified from the point of view of the general interest, they are designed to block the entry of a maverick, protecting the incumbents (hotel sector). In the Balearic Islands the ability of competitors to enter has been blocked and the legislation has favored the profits of hoteliers. For Silos there are solutions to regulatory capture: greater transparency, accountability, improving channels for consumers to act, facilitating institutional stability, .....
Carlos Pérez-Lanzac, President of the Andalusian Tourist Housing Association (AVVA), pointed out that the hotel lobby is very structured, and regulations that are truly savage are approved. The market can intervene when there are problems between supply and demand. According to him, the Andalusian regulation is not bad although it has some deficiencies. It demonizes a sector (holiday homes) that has not had a structure until recently. The tourist sector is transversal, the associationism is fundamental and key in these moments. For Pérez-Lanzac, we are in the final stretch. A minimum national standard is needed, a difference must be established between individual and professional operators, and city councils must be able to decide what model of city and tourism they want. It is not understood even finding simple rules such as the Andalusian phenomenon of illegality exists. For the President of AVVA, model 179 gives fiscal transparency but only affects tourist housing.
Presentation 7 - Platforms, marketing and intermediation in housing accommodation
Tolo Deyá, Dean of the Faculty of Tourism of the University of the Balearic Islands (UIB), moderated this presentation.
Francisco Rodríguez, project consultant and founder of collaborative startups, stressed that we are in a moment of reform of digital platforms, he described their advantages and problems:
Advantages: triple impact, scale, global impact.
Problems: negative externalities, lack of data, conflicts with the industry.
4Ds: decentralization, distribution, de-seasonalization, de-standardization.
Large international hotel companies are already launching their tourist housing product (Marriott, Be Mate). It is important to use information to make decisions (artificial intelligence and the internet of things are beginning to be used). For Rodriguez it is necessary to ask what the demand wants, the information can be obtained through social networks, big data, seek to understand what they want, what are the barriers that exist. The ideal is to promote a tourism industry that is compatible with progress. How do we create new destinations, he asked. Finally, he considered that revenue management is very interesting for owners, the use of technology based on data offers solutions.
Roland Buquet, Partner Success Director EMEA Homeaway, pointed out that Homeaway belongs to the Expedia group and manages 2 million properties. Travelers are generally groups or families, so the ideal is to match the property to these two possibilities. Searching for the perfect property is a job. 86% make the decision between several people, it is important to eliminate friction, get references. Reducing owner effort is a goal. 4 times more bookings if using reservation board. Boost comments. Facilitate travelers' decisions. According to Buquet, Homeaway works on the owner side, has its own revenue manager tool. Use data to make the right decisions (comparison with surrounding properties). There are ad management models. Each owner offers something different and you have to study the external inputs that affect demand (problems of competing countries, Brexit, weather). The vacation rental client is of all types although traditionally it is the family with children and also groups of friends. Finally, Buquet said that a distinction must be made between individual owners and professional property managers. The latter have understood how important revenue is to be competitive. Individual landlords have not yet reached that point, although there is beginning to be an interest in obtaining training in this area.
Presentation 8 - Taxation of Vacation Rentals
As every year, the presentation on taxation closed the Congress. Mª Ángeles Marí, General Secretary of PIMEEF, introduced Vicente Arbona, Head of Inspection of the Tax Agency (AEAT) in Eivissa.
For Arbona, the taxation of vacation rentals revolves around a fundamental concept, whether or not services of the hotel industry (cleaning, change of linen, food, etc.) are provided during the stay. If there are services there is VAT (10%, as in a hotel), if there are no services, there is no VAT.
As far as personal income tax is concerned, the income must be taxed on the benefit of the income. The treatment is different if services are provided or not. If there are no services, the owner is a lessor and expenses (IBI, depreciation, repairs) can be deducted as long as there is a lease. If complementary services are provided, the owner is no longer a lessor and becomes an entrepreneur. When deducting expenses, entrepreneurs do not have to prorate expenses. In the case of transferring the property to a company that does the marketing, this transfer of use is a lease that is taxed at 21%. The company will make a withholding tax at 19%, all similar to a rental lease. The owner will have to declare the rents collected and the deductible expenses will be prorated.
Practical cases were presented and cases of owners who are legal entities were studied.
Form 179 is an informative declaration on transfer of use of dwellings for tourist purposes. This form must be filed by the intermediary between the transferors and the transferees of the use of dwellings for tourist purposes. A tourist dwelling is understood to be the temporary assignment of the use of all or part of a dwelling, regardless of the channel through which it is marketed or promoted and carried out free of charge or for a consideration. This form must include information on the owner, the transferor, the accommodations (dates and amount), etc. Copies of customer documentation must be kept.
