The impact of the tourism accommodation composition on housing prices: The case of Croatia

Abstract

The adverse effects booming tourism activity and peer-to-peer platforms on housing markets are well known, while the influence of relative changes in tourism accommodation composition on housing prices are not well understood. To shed more light on the issue, this paper employs the data set on housing prices and its main tourism, economic, and demographic determinants, for cities and municipalities in a tourism-dependent country. The results suggest more intensive tourism demand and the conversion of housing stock into rentals boost housing prices. The increase in the share of short-term rentals depresses prices, while in destinations where hotels and campsites become more prevalent prices increase. These findings could be attributed to the pricing-in effects of an increased supply of tourism amenities developed as part of hotels’ and campsites‘ product mix that improve the quality of life, and lower quality of life experienced at destinations where rentals are becoming more prevalent.