Study: Data-Driven Strategies: The Solution to Over-Tourism?

In the wake of the pandemic, travel has experienced a significant resurgence, placing extensive pressure on popular tourist destinations. A recent study from Horwath HTL and AllTheRooms suggests that this issue can be mitigated with well-strategized and data-led approaches, thus preventing the need for restrictive legislation.

Criticisms have been levelled at the short-term rental market, accusing it of contributing to the global housing supply crisis. This has elicited various responses from local legislators, varying from complete bans on licensing and registration to restrictions on listing durations. Despite these criticisms, the short-term rental market in Europe has seen impressive growth, with gross revenues rising by 72% from €11.8bn in 2019 to €20.3bn in 2023.

The study revealed that just 10 out of 27 countries contributed to 90% of Europe’s total short-term rental revenue in 2023. The top contributors were France, the UK, Italy, Spain, and Germany, accounting for 74% of the total revenue. Despite stringent legislation, Germany grew 32% between 2019 and 2023.

In 2023, the range of available beds in European countries varied from 3,000 to over 2 million, with France leading with 2.67 million beds. This significant growth in the short-term rental market has led many to blame it for over-tourism and overcrowding. However, the onus of this issue also falls on poor planning and institutional inertia.

According to Siniša Topalović, ISHC, managing partner, Croatia, Horwath HTL, the real failure is not in short-term rentals, but in the strategic inaction of booking platforms that have grown exponentially within a policy vacuum. He also highlighted the urgency for national tourism regulators and destination managers to move toward targeted, data-led strategies that align accommodation growth with affordable housing, community resilience, and balanced development.

Joe Stather, managing director, UK, Crowe UK/Horwath HTL, emphasized the importance of robust data analysis and intelligence in creating a balanced tourism strategy that caters to the needs of residents and visitors alike. He further acknowledged that while short-term rental products are useful in the market, a successful model should consider each destination’s different requirements and consumers’ varying preferences.

The latest research shows that data-driven strategies provide a potential solution to the issue of overcrowding and overtourism. It underscores the need for strategic planning and proactive measures rather than reactive ones, promoting sustainable tourism for the future.

Read the full study here.