The impact of mass tourism on housing costs

Tourism is one of the main drivers of the global economy, contributing 3% of global GDP. The profits it generates make it one of the most attractive industries for countries to drive. However, this industry also faces several challenges, such as sustainability and the impact on local communities. 

Different cities around the world, such as Tokyo, Venice or Amsterdam, have adopted measures to reduce the influx of more visitors. These measures include the implementation of daily tourist limits, the regulation of short-term accommodations, and the introduction of tourist taxes. How does the influx of tourists affect housing prices?

Increased Demand and Prices:

1. Increased Demand for Short-Term Accommodations:○ Digital platforms have popularized short-term rentals, reducing the supply of housing available for permanent residents.○ This increases rental and property prices, as landlords prefer to earn more income through tourism.

2. Property Investment:

○ Investors, attracted by the profitability of tourist rentals, buy properties in tourist areas, increasing demand and, consequently, prices.

Resident Displacement:

3.Gentrification:

○ Tourist areas often experience gentrification, where low-income residents are displaced due to rising housing costs.

4. Reduced Housing Availability:

○ The transformation of resident housing into tourist accommodations reduces the supply of permanent housing, complicating access to affordable housing for locals.

Although tourism generates large revenues and will continue to grow, it is essential to find a balance between visitors and locals. Governments, tourism businesses and communities must work together to develop policies that maximize economic benefits while protecting quality of life and cultural and natural heritage.