Europe’s short-term rentals market is facing its toughest political moment in years.
From Barcelona to Berlin, governments are linking the rapid spread of holiday lets and short-stay rentals to the worsening housing crisis, arguing that homes used for tourism are being pulled out of the long-term rental market in places where residents already struggle to find affordable housing.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The result is a tightening web of STR regulation: stricter local caps, stronger enforcement, and a new EU framework designed to force more transparency from booking platforms.
Behind the backlash is a simple tension. Short-term rentals can expand visitor accommodation quickly and generate income for hosts. Yet in high-demand districts, the same model can concentrate tourism in residential streets and encourage more properties to operate as year-round commercial lets.
Policymakers increasingly describe this as a housing supply problem first, and a tourism management problem second.
Why short-term rentals have become a housing issue
The core policy concern is the relationship between short-term rentals and long-term housing availability. When an entire flat can earn more as a holiday let than as a conventional tenancy, incentives shift.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIn tight markets, even a small reallocation of homes towards tourism can matter, particularly in historic centres and well-connected neighbourhoods where demand is strongest.
A growing body of European research suggests regulation can reduce the number of entire-home listings and curb professional operators, but it does not automatically deconcentrate activity away from the most touristified neighbourhoods.
That finding matters for cities trying to “spread” tourism rather than simply reduce it. The same research also stresses a practical point: enforcement depends heavily on whether platforms cooperate with local rules and data requests.
The European Commission has begun framing the issue within a broader affordability agenda. In its recent affordable housing plan materials, the Commission points to long-run rises in EU housing costs and reports a sharp increase in short-term rentals between 2018 and 2024.
It also highlights structural factors such as limited social housing supply and the scale of under-used housing stock, suggesting that short-term rentals are one part of a wider set of market pressures.
Community pressure, overtourism and enforcement politics
The backlash is not only about prices. In many destinations, residents complain about noise, waste management, overcrowded public transport, and the day-to-day churn of strangers in blocks built for permanent neighbours.
Even when cities focus regulation on whole-home commercial listings, enforcement disputes can become a proxy battle over what neighbourhoods are “for”: residential life, tourism, or a mix of both.
Spain illustrates how quickly the debate can escalate when housing stress meets record visitor volumes.
In late 2025, Spain imposed a large fine on Airbnb linked to allegedly unlicensed or inaccurately registered listings, presenting it as part of a wider push to protect housing access. Airbnb said it would challenge the penalty and argued it was cooperating, while the government tied enforcement to affordability concerns.
Barcelona has become a European symbol of the political shift. The city has said it intends to end tourist apartment licences by late 2028, aiming to return homes to residential use.
The plan has faced pushback from parts of the sector, but has also been reinforced by legal and national political developments, underlining that the direction of travel in some cities is towards outright market shrinkage rather than marginal adjustment.
France shows a different style of crackdown: tighter compliance rules and heavier penalties, alongside broader “change of use” constraints in some areas.
French reporting has described a patchwork of local restrictions that can require owners to secure permissions and, in some cases, provide housing “compensation” before switching a property to tourist use—measures designed to make conversion away from long-term renting more expensive and less attractive.
Germany’s debate increasingly includes not just classic holiday lets but also furnished, fixed-term “micro-letting” models that critics say mimic short-term rentals while skirting established controls.
Recent reporting from Berlin points to district-level decisions that could influence how far authorities can go in restricting short contracts where they are seen to worsen affordability and displacement.
The regulatory turning point: eu rules from May 2026
The most consequential change for the market may be administrative rather than ideological: data.
Regulation (EU) 2024/1028 creates a framework for collecting and sharing information on online short-term accommodation rental services across the EU, with core obligations applying from 20 May 2026.
The aim is to make it easier for authorities to identify listings, track activity, and enforce local rules.
In practice, the regulation sets out a model built around registration and reporting. Member states can require hosts to register and obtain an identification number; platforms must facilitate the display of registration information and transmit specified activity data through national “single digital entry points”.
Several official and legal explainers emphasise that platforms will also need to carry out checks and respond to takedown requests for non-compliant listings where required by authorities.
This EU move arrives as national and city measures harden.
London already operates a long-standing 90-night limit for short-term letting of an entire home without planning permission, a rule the Mayor of London frames as a balance between allowing occasional hosting and protecting housing supply.
Similar local planning explanations across London boroughs underline that the cap is measured across a calendar year and that enforcement can follow if homes are used as temporary sleeping accommodation beyond the threshold.
At EU level, the policy agenda is still expanding. The Commission’s affordable housing plan signals further work on short-term rentals in “housing stress” areas, pointing towards additional tools and legal clarity for cities beyond the data rules that take effect in 2026.
A Commission press release from December 2025 explicitly includes action on short-term rentals within its wider housing programme.
What this means for the hotel industry
For the hotel industry, Europe’s tightening stance on short-term rentals marks a structural shift rather than a short-term policy cycle.
The introduction of EU-wide data-sharing rules from May 2026 is expected to reduce regulatory blind spots that previously allowed parts of the short-stay market to operate at scale with limited oversight.
As enforcement becomes more consistent, the supply of unregulated or quasi-commercial holiday lets may contract in several high-pressure cities.
This change could alter competitive dynamics in urban accommodation markets. Hotels have long operated under planning controls, safety standards and taxation regimes that short-term rental operators have often avoided or only partially met.
More robust STR regulation, including registration requirements and rental caps, is likely to narrow this regulatory gap, particularly in cities where enforcement capacity improves with access to platform data.
However, the impact will not be uniform. Local authorities retain wide discretion over zoning, night limits and licensing rules, meaning market outcomes will continue to vary by city.
In destinations where caps are strictly enforced or licences are withdrawn, hotels may see reduced competition from entire-home listings, especially during peak seasons. In other markets, short-term rentals are likely to remain a significant complement to traditional accommodation, particularly for longer stays and group travel.
For hotel operators and investors, the key variable is not whether regulation exists, but how effectively it is applied. The emerging EU framework signals a more predictable regulatory environment, but one that still requires close monitoring at city level.
Strategic planning will increasingly depend on understanding how local housing pressures, political priorities and enforcement resources shape the balance between hotels and short-term rentals in each market.
