Needy home seeks friend for seven days programme, total pleasure.
Living in an isolated island in the middle of the North Atlantic has its own adversities, among them… Wanting to ‘get some fresh air’ in a place that is not an isolated island in the middle of the North Atlantic Ocean. Travelling to the ‘continent’ (expression used by islanders to refer to all places that are not islands), involves air travelling, many times quite expensive, therefore imagine my happiness when low-cost airlines started to operate from and to the Azores Islands.
This happiness didn’t last long. As soon as I started researching the hotel search engines, I was shocked with the prices of a hotel room in Lisbon. “Misleading advertising!’, I shouted to my wife, “the TV told me that Trivago was going to make me a happy person instead of a bitter skinfit!”. I stumbled onto one of the main problems with accessible mass tourism that low-cost airlines facilitate: hotel prices rise in proportion with the rise in demand. As a market niche isn’t a market niche for long, several alternatives for the consumer came up: hostels, lodges, guesthouses, and especially rental accommodation. Services like Airbnb, HomeAway or Tripping experienced a unbelievable growth. In the case of Airbnb, it grew from a group of friends renting a house with 3 air mattresses in 2007 to a company quoted on the stock exchange in 30 billion dollars in 20016.
Going back to my feeling of apathy looking at the prices of hotels in Lisbon, I was slightly happier noting that continentals would be invariable paying the same price now as travelling to Azores were becoming more accessible. “ If I cannot have inexpensive holidays, no one shall!”.
One of these many entrepreneurs is a guy called Paulo Gomes that, upset about not having a net worth of 30 billion dollars, decided to do something to correct this situation. And he built the project Porto Martins Bay Apartment in the Terceira Island, Azores. Seeking to learn a bit more about the functioning of the working class (as a civil servant, that is a mystery to me), I bugged him until he would grant me an impromptus interview on our way to a pint and some sweet lupins.
João Pedro Cunha (JPC): How did you start in the local rental tourism market?
Paulo Gomes (PG): I knew of accommodation rental for tourism purposes through a friend that had a rental house in the Fajã dos Cubres, in the Sao Jorge Island (Casa da Arcada) and that was featured (and therefore signed up) at the Airbnb site. When I learned of this site, I immediate though the concept was quite interesting, I had once had the experience of staying at a house while travelling. And I realized I had the ideal conditions and localization to rent my properties to tourists. Given the fact that tourism is growing in Azores, I saw a great opportunity to start a rental business.
JPC: What were the main challenges to kickstart your business?
PG: License an establishment of rental accommodation is a relatively simple and fast process. You just need a house or an apartment or rooms properly equipped that are in accordance with the law requirements (these are not extensive). In my case this was slightly more complicated as I had 2 apartments in the same building that were not considered autonomous fractions by the Town Hall (even though, in practice, they were) in the original plant of the building. As the law states “it considered an apartment the local accommodation establishment whose accommodation unit consists of an autonomous fraction of the building”, so I had to hire an architect that would fraction my property in two autonomous fractions. This process dragged for a few months and only after it was concluded I could start the process to licence my local rental accommodation. Bureaucracy is still; paramount and processes ought to be simplified.
JPC: What are the gains of rental accommodation in comparison to traditional hotels?
PG: I believe the idea behind local rental accommodation is to provide people a similar experience to the one they would have if they were in their own home. Providing a home away from home. The impression I have is that there are more and more people preferring rental accommodation to traditional hotels because people feel more comfortable in a house or apartment where they can cook, make a barbecue and they feel they have more privacy than in a hotel.
Also, people have the opportunity to experience how locals live as they end up shopping in the same supermarket and during those days they live their lives as they were in fact actually living there. Hotels cannot provide that. Another great advantage is that it is a lot cheaper for family or friends holidays, as a family of 4 travelling and staying at a hotel usually has to pay for 2 rooms.
JPC: Do you think traditional hotels and rental accommodation can both exist peacefully?
PG: I believe so. With the increase in tourism and low-cost connections there will be clients for everyone. It is paramount to diversify offer.
People like Paulo, are the new “pet hate” (Portuguese expression, hope you get the feel of it in English) of the Hotel businesses, with attractive spaces and competitive prices. Rental accommodation is having a huge impact in the market, especially in Europe where the majority of offer is localized. In cities like Berlin, Madrid, Paris and Vienna it is frequent for hotel prices to be twice a property on Airbnb.
Of course there are downsides. Guests often have to give up amenities like the mini-bar, concierge and cleaning services, and many property owners are not very keen on short holidays and early morning check in.
If you want to help Paulo becoming the next Portuguese billionaire, take a look at his page and his Airbnb listing.
This post was originally written in Portuguese. Click here to read the Portuguese version.