The industry may recognize the need to be sustainable, but the incentives need to align with the infrastructure. It's also important to treat sustainability as a common goal and shared outcome, and not as just an accreditation.
The short-term rental industry can be sustainable, but not without support and structure. As it currently stands, there are few institutional incentives and considerable regulatory obstacles to make sustainability a universal priority.
Some destinations are testing the waters, however, by instituting standards for sustainability. Think accreditation.
Global travel and tourism’s contributions to the global greenhouse gas emissions stand at 11 percent as of 2021 and that number is predicted to double by 2050. And, accommodations, which includes short-term rentals, account for roughly 10 percent of the total annual emissions of the tourism sector or 264 million metric tonnes of CO2-equivalent direct and controllable emissions, according to industry estimates.
The United Nations World Tourism Organization announced its One Planet Vision in 2020 with lofty goals such as supporting wildlife conservation efforts through tourism, engaging the tourism sector in carbon removal, and accelerating the decarbonization of tourism operations.
Lofty goals aside, the travel and tourism sector is barely grappling with containing the damage.
Falling Short (Term Rentals)
So where do short-term rentals stand on this?
“At the moment, vacation rentals associations are busy fighting regulatory frameworks to actively think about sustainability initiatives,” said Simon Lehmann, co-founder and CEO of AJL Atelier, a consulting firm specializing in the private accommodation and vacation rental industry.
Lehmann said that his firm offers consulting services to property owners and managers on sustainability and there is considerable interest among travelers to support sustainable stays. However, the incentives and infrastructure continue to be misaligned.
“We still don’t have many institutional owners, and there is an over reliance on individual property owners, who bear the cost of making the property more sustainable,” Lehmann said. “While more online travel agencies now say that consumers prefer sustainable properties, unfortunately, price is still a key determinant.”
In certain European markets such as Denmark, Italy and Spain, it’s common for guests to pay for the electricity consumed. But that’s more an exception rather than a rule. Even so, Lehmann noted that Europe is in the forefront of a lot of such initiatives and awareness.
Sustainability as a Standard
The market for sustainable tourism will grow by $336 billion by 2027 — and 38 percent of the total market share growth will be from Europe, according to data from London-based market research firm TechNavio. The initiatives are specifically led by France, Germany, where governments develop different policies at the national level to encourage sustainable tourism. For instance, in April 2022, the French government banned short-haul flights where alternative routes via a bus or train would take two and half hours or less. The rule is part of an overall effort by France to reduce carbon emissions by 40 percent by 2030, bringing them back down to 1990 levels.
Even as travelers self-report on surveys agreeing that they consider environmental matters as “extremely” or “quite important,” the onus of making private accommodations largely falls on the shoulders of private owners, as Lehmann pointed out.
When such is the case, developing a minimum viable standard for sustainability becomes vital. Vanessa de Souza Lage, a serial entrepreneur in the vacation rental industry is on this mission with her current company Sustonica. Founded last year, Sustonica claims it’s the first sustainability recognition for the short-term rentals industry. The startup credits a certification for properties meeting 33 percent of its eligibility criteria which include energy conservation, promoting inclusiveness, waste reduction, and water conservation. Property owners or managers pay an annual fee of €40 to register a property for inspection and the badges last for a year.
“The certification industry is a maze, especially when it comes to creating a standard for short-term rentals,” de Souza Lage said.
She also noted that her company is in talks with local governments and the European Commission to keep the process simple. “We don’t want [the European Commission] them to come up with regulations that are not feasible and hard to follow,” de Souza Lage said. “The idea is to keep the standards simple so it’s easy to understand and raise awareness.”
On Sustonica’s list of priorities is encouraging guests to spend less energy during their stay. And the company’s strategy to get there is by trying to get as many properties certified under its fold and make property managers and owners sustainability ambassadors. For instance, Sustonica works with AES Events Group, a property management company in Cannes, France, as a pilot project to educate owners and property managers about getting accreditation.
Chris Maughan, CEO of AES Events Group, noted that it’s in the mutual interest of the vacation rental industry and the local government to push the needle on this effort. “No place is 100 percent sustainable, but we have to get somewhere,” Maughan said. “We’re mapping out this initiative with Sustonica and if it works out, it will become obligatory for management companies in Cannes to have the badge.”
Business as Unusual
The private accommodation industry will have to invest €768 billion ($810 billion) over the next two decades: €243 billion ($256 billion) for investments for abating greenhouse gas emissions and €525 billion ($553 billion) for greening the energy supply of the remaining emissions.
While that’s the common goal, the effort has to be proportionally collaborative. There are already some initiatives in place —The Global Short-Term Rental Sustainability Research Project was created in November 2022 to formulate a ‘united voice’ and will assist the industry in determining best practices.
But some industry professionals believe that branding should play its role in promoting sustainable practices. Bob Garner, who founded EnviroRental, a resource for the vacation rental industry to learn about sustainable practices, said that it’s good for business.
“People tend to think of it as a huge effort,” Garner said. “But guests who feel guilty about flying to their vacation feel better about staying at a sustainable rental.”
Garner observed that upholding and advocating for an eco-friendly accommodation is great for business. As a property owner of a rental in Italy, Garner noted that he has a 90 percent direct booking rate, 65 percent return rates and a loyal and repeat clientele.
“And as hosts, we can get better and more nuanced reviews,” Garner noted.
He also highlighted the overlooked aspect of regional grants to support such initiatives. “Owners can apply for local grants to have their homes insulated. Or investing in an EV charging station, which the local community can use can also be eligible for government subsidies.”
Big Players, Small Pockets
At an individual level, though, walking the talk could could mean small, conscious changes: starting with supporting smaller businesses that are an alternative to big online travel agencies like Airbnb, VRBO and the likes — businesses that are invested in local communities.
“A lot of us talk about sustainability, but there is very little impact,” said Emanuele Dal Carlo, co-founder of Bologna-based sustainable tourism company Fairbnb.coop. “If Airbnb and VRBO demand sustainability standards, they’d have to close their doors to over 70 percent of their guests.”
Dal Carlo’s organization Fairbnb.coop connects conscious travelers with hosts who aim to create sustainable and equitable communities around the world. He also advocates for more responsibility taken by owners and property managers at a local level to safeguard their communities.
“These mainstream travel platforms should have standards, but they should be set locally and hosts should teach the platforms what sustainability means for them.”
Commenting on the aspect of corporate responsibility, Dal Carlo asks if platforms like Airbnb and VRBO are willing to make less money in order to give the fair share to destinations and places that make them money.
“We’re not asking for anything that a good gardener wouldn’t do.”
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