How Greece is trying to put the brakes on Airbnbs with new legislation

The Rise of Holiday Rentals and the Struggle for Balance in Greece’s Tourism Industry

Greece, a country renowned for its rich history, pristine islands, and vibrant culture, has long been a magnet for tourists from around the world. However, the surge in holiday rentals, particularly through platforms like Airbnb, has sparked a heated debate among lawmakers, hotel owners, and local residents. Hotel owners have voiced concerns that holiday rentals now outnumber traditional hotel rooms, raising questions about the sustainability of the tourism industry and its impact on local communities. In response, Greek lawmakers are proposing stringent new rules to regulate short-term rentals, aiming to curb overtourism and strike a balance between the economic benefits of tourism and the needs of local residents.

Proposed Legislation Aims to Tighten Regulations on Holiday Rentals

At the heart of the debate is a draft legislation that seeks to impose tougher standards on holiday rentals. According to Tourism Minister Olga Kefalogianni, the proposed changes would prohibit the use of non-traditional spaces, such as basements, underground areas, and former industrial properties, for short-term rentals. These spaces, often listed on platforms like Airbnb, would no longer be allowed to operate unless they meet specific criteria. Rental properties must now serve as primary residential areas, equipped with natural light, proper ventilation, and air conditioning. The minister emphasized that these changes are part of a broader effort to ensure that holiday rentals meet minimum operational and safety standards, treating them as a legitimate tourism product.

The legislation also coincides with a one-year ban on new short-term rental licenses in popular tourist areas of Athens, such as Kolonaki, Koukaki, and Exarchia. This move is designed to manage the overwhelming influx of tourists in these neighborhoods, which has led to higher rents and displaced long-term residents. Violations of these new rules could result in hefty fines of up to €20,000. By introducing these measures, the Greek government hopes to promote long-term, sustainable, and high-quality tourism development, rather than chasing record-breaking annual visitor numbers.

Balancing Tourism Benefits with Housing for Locals

While holiday rentals have undeniably boosted Greece’s tourism industry, they have also exacerbated housing challenges for local residents. In 2023, tourism contributed approximately 13% of Greece’s gross domestic product (GDP), making it a vital sector for the economy. However, the proliferation of short-term rentals has driven up rents, particularly during the cost-of-living crisis, making it difficult for locals to afford housing in tourist-heavy areas. The government acknowledges the need to balance the economic benefits of tourism with the accessibility of housing for residents. To address this, officials are offering tax incentives to property owners who shift away from short-term leasing and instead opt for long-term rentals.

Despite these efforts, the number of holiday rental rooms has grown significantly, often rivaling—and in some cases exceeding—the number of hotel rooms available. In central Athens, for instance, holiday rentals nearly doubled the number of hotel rooms in 2023, according to a study by a national hoteliers association. This disparity has led to calls for stricter regulations on websites like Airbnb, which many blame for the rapid expansion of short-term rentals.

The Heated Debate in the Greek Parliament

The proposed legislation has sparked a fiery debate in the Greek parliament, with opposition lawmakers accusing the center-right government of ignoring the social and environmental costs of overtourism. Critics argue that the unchecked growth of short-term rentals has transformed neighborhoods, displacing permanent residents and straining local resources. Left-wing lawmaker Kalliopi Vetta criticized the government for allowing the concentration of holiday rentals in tourist hotspots, asserting that this focus on profit has come at the expense of social welfare and environmental sustainability.

The draft legislation, which also introduces new safety and operational requirements for holiday rentals, is set to be voted on later this month. While some lawmakers support the measures as necessary to manage overtourism, others argue that the restrictions do not go far enough to address the root causes of the problem. The outcome of this debate will have far-reaching implications for the future of Greece’s tourism industry and the communities that rely on it.

The Road Ahead: Navigating the Future of Tourism in Greece

As Greece prepares to welcome an estimated 35 million tourists in 2024, generating a record €22 billion in revenue, the question of how to manage this influx remains a pressing concern. The proposed legislation marks a significant step toward addressing the challenges posed by overtourism, but its success will depend on how effectively it balances the interests of all stakeholders. Hotel owners, local residents, and tourists alike will be watching closely as the Greek government navigates this complex issue, striving to create a more sustainable and equitable tourism landscape. The outcome of this effort will not only shape the future of Greece’s tourism industry but also serve as a model for other destinations grappling with similar challenges.