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AIRBNB

French hotels sue Airbnb claiming ‘unfair competition’

The main trade group for French hotels has sued the home-sharing giant Airbnb, accusing it of unfair competition by "knowingly violating" rules imposed as part of a crackdown in one of the US giant's biggest markets.

French hotels sue Airbnb claiming 'unfair competition'
Photo: AFP

In the lawsuit seen by AFP on Tuesday, the UMIH hotel industry body accuses Airbnb of keeping listings online even when they lack the required registration numbers, a rule recently introduced in Paris and other French cities to crack down on people who rent out their property as a full-time business.

Airbnb knows that some owners rent their rooms or apartments for more than the 120-day yearly limit, or that renters are illegally using the site, the lawsuit also claims.

An initial court hearing has been set for February 14, 2019.

“Assuming that one percent of the listings offered by Airbnb are illicit, the total loss for the (hotel) industry would reach tens of millions of euros each year,” the UMIH said.

The French hotel association is seeking a symbolic 143 euros ($163) in damages, in line with the nightly rate charged by one illegal Paris renter who was found guilty by a court earlier this year.

The UMIH also wants 50,000 euros ($57,000) to cover its legal fees.

Paris leads charge

Paris has led the charge in France against Airbnb and other home-sharing platforms, claiming they have driven up home prices while depriving municipalities of taxes on income which often goes undeclared.

It has imposed stiff penalties on platforms who fail to register their apartments, obtaining 1.38 million euros ($1.57 million) of fines between January and August 15.

In September the Paris city council member in charge of housing said he would seek an outright ban on rentals in the heart of the capital, saying Airbnb was making the city too expensive for locals.

The moves echo actions taken in other tourist hotspots like Amsterdam, Barcelona, Berlin and New York.

An Airbnb spokesman said Tuesday he was “not surprised by this new attempt by the French hotel lobbies, the latest in a long series of legal actions — all of which have been unsuccessful.”

Hotels “continue to protect their interests and try to restrict the rights of the French to profit from tourism as well,” he said. 

Airbnb lists some 500,000 rooms and apartments in France, with an estimated 65,000 in Paris — compared with 80,000 hotel rooms in the capital.

Yet just 38 percent, or about 25,000, of the Paris listings are currently registered, a city official told AFP.

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RENTING

Local authorities in France get power to crack down on Airbnb rentals

Authorities in Paris and other French towns will be able to regulate local businesses who wish to rent property on Airbnb, according to a decree published by the French government. 

Local authorities in France get power to crack down on Airbnb rentals
This illustration picture taken on July 24, 2019 in Paris shows the logo of the US online booking homes application Airbnb on the screen of a tablet. (Photo by Martin BUREAU / AFP)

The news was welcomed by authorities in Paris, who have long battled to keep a check on Airbnb and its impact on the rental market. 

On Sunday, the French government published a decree that allows the City of Paris to subject the renting of local businesses to prior authorisation. 

This decree applies to all types of offices, stores or medical offices who may be turned in holiday rentals. 

It aims to allow towns to limit the growth of rentals on Airbnb, “protect the urban environment and preserve the balance between employment, housing, businesses and services on their territory,” says the decree. 

The news was welcomed by authorities in Paris, which has been witnessing “the multiplication of ground floor business premises being transformed into holiday rentals,” said deputy mayor Ian Brossat, who is in charge of housing, in a press release

This decree which comes into effect on July 1st, “will prevent local businesses from being turned into holiday rentals,” Brossat added on Twitter.

The conditions businesses will have to meet in order to get an authorisation still have to be defined said Brossat, according to Le Figaro. But Paris aims to draft these regulations and get them voted by the end of 2021, so they can come into force at the beginning of 2022. 

Other towns allowed to apply the decree are those who have put into effect “the procedure of a registration number for furnished holiday apartments, owners and, subject to contractual stipulations, tenants of local businesses who wish to rent them as furnished holiday apartments.” 

In recent years, Paris city authorities have made tax registration obligatory for apartment owners and have restricted those renting out their primary residence to a maximum of 120 days a year.

Now if owners want to rent a furnished property for less than a year to holidaymakers, they must apply to local authorities for permission to change the registered use of the space.

They are then required to buy a commercial property of an equivalent or bigger size and convert it into housing as compensation. 

Until then, these onerous and time-consuming tasks did not apply to local businesses who only had to fill out a declaration.  

In February, France’s highest court, the Court of Cassation, ruled that regulations introduced to counter the effects of Airbnb and other short-term rental sites on the local property market were “proportionate” and in line with European law.

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