Touristification, Airbnb and the tourism-led rent gap: Evidence from a revealed preference approach

Abstract

Over the past decade, the global rise of home-sharing platforms, such as Airbnb, has catalysed the process of ‘touristification’ in major tourism cities. Touristification, a term recently used to describe tourism-induced gentrification, leads to a morphological transformation of a community into a tourism commodity. However, less is understood about the effects of this process, when it is triggered by short-term accommodation platforms, in reshaping urban housing markets. Therefore, in this case study, we apply the rent gap theory to the process of touristification and hypothesise that, ceteris paribus, (1) touristification can create a new potential ground rent that brings about a tourism-led rent gap (i.e., net positive externalities), whereas (2) in a low-density neighbourhood the urban conflicts caused by touristification can lead to a negative rent gap (i.e. net negative externalities). This study's instrumental evidence from the revealed preference approach confirms two opposing forces of the Airbnb listing density on house-type versus apartment-type accommodation rents. Further, its empirical findings imply that in framing policies for effective destination management, policymakers should consider the positive as well as the negative externalities associated with touristification.