Barcelona road to Segrada Familia
The wide-open road to Segrada Familia in Barcelona.

In my view, the streets in Barcelona are not suffocating with traffic. I was only in Barcelona for a few days in April, but the roads in the business districts are amazingly wide, and we were never slowed in our travels. When I walked the narrow paths of Gracia, a cozy neighborhood in the middle of Barcelona, I never felt squeezed by cars. I lived in Bangkok for 11 years. I know what bad traffic looks like.

But of course it is all relative. While Barcelona is no where near as hot, congested or polluted as Bangkok, for citizens of Barcelona, conditions are not as good as they should be. According to this VOX article by David Roberts of the University of Pennsylvania, Barcelona is the fourth-most population-dense city in Europe, is well under the World Health Organization’s recommendation for 9 square meters of green space per resident at 2.7 square meters, suffers from urban heat island effect at 3 to 8 degrees Celsius warmer than the region around it, and is considered one of the noisiest in the world.

One of the reasons for this poorer quality of life is due to decades of negligence by former totalitarian leader, Francisco Franco,  After the generalissimo passed away in 1975, development in Barcelona began again, peaking with financing sparked by the Olympics, which may be another reason for the state of Barcelona today.

According to Samuel Rosenthal and his article, Olympic Cities and the Legacy of Infrastructure: Barcelona 1992 and Athens 2004, the planners for Barcelona were essentially taking advantage of global trends, including the desire for large cities to invest in urban renewal, and to also brand Barcelona as an exciting destination for tourists and global financing. In fact, Rosenthal explained that planners shifted attention from “publicly planned, small-scale infrastructural improvements to larger schemes funded by private investors.”

This is not unique to Barcelona. The organizers leveraged the Olympics to realize long-held plans for the development of Barcelona as would any other city. But as I wrote previously, these Games were so successful economically that it is often held up as the gold standard for an organization of an Olympiad, cited as The Barcelona Model. But one can argue that the Olympics triggered inflows of private capital that brought both benefits and detriments to Barcelona, as Rosenthal explains.

…this largely positive appraisal of the Barcelona Olympics belies the negative consequences of its planning strategy that have become evident in succeeding years. The regeneration of the waterfront, while touted as a positive outcome of the Games, has increased housing prices across the city, forcing many longtime residents to leave. Additionally, following the Barcelona Games, inflation in the city increased and unemployment rose. And on a larger scale the city branding approaches used for the Barcelona Olympics have increasingly placed control of the city in the hands of private agents. Generally, post-Olympic city planning in Barcelona has become less focused on the improvement of the lives of the city’s residents, and more attuned to strategies that seek to maximize the attraction of capital.

Part of the woes of urbanization and increased emphasis on development is a diminished prioritization of the working class. Economist Andrew Zimbalist, author of the fascinating book, Circus Maximus – The Economic Gamble Behind Hosting the Olympics and the World Cup, quoted Josep Maria Montaner, an architectural critic, in explaining how old housing and factories, landmarks of a different age, were demolished, and new development lacked any environmental or sustainability standards. Zimbalist then went on to explain how inflows of private capital led to gentrification.

Barcelona’s new urban zones were redeveloped with improved public services and, in some cases, direct access to the sea. These parts of the city became gentrified, and hand in hand with gentrification came higher prices. Higher prices meant that lower-income people had to relocate, and, more generally, plans for public housing were underfulfilled. One study noted the following impacts:

  • Strong increases in the prices of housing for rent and for sale (from 1986 to 1993 the cumulative increase was 139% for home sale prices and nearly 145% in home rentals)
  • A drastic decrease in the availability of public housing (from 1986 to 1992 there was a cumulative decrease of 5.9%)
  • A gradual decrease in the availability of private houses for rent (from 1981 to 1991 the cumulative decrease was 23.7%)11 Thus, like the experience with mega-events elsewhere, hosting the games in Barcelona was accompanied by a redistribution of living standards to the detriment of lower-income groups.

One can argue that the decrease in supply is being driven by a Silicon Valley start up called Airbnb, which is highly popular in Spain. For those who don’t know, Airbnb is a service that connects you with people who are offering accommodations in their own properties. The original premise of Airbnb was that you could rent out a person’s room, and you could spend time with the owner. Today, people and companies run businesses renting out apartments and houses to people who are looking for alternatives to hotels.

Airbnb

I spent a week in Madrid and Barcelona in April. In Madrid, I stayed in a room the owner lived in. He was out of town, but a guest occupied another room. It was a great experience as we got along well with the other occupant. In contrast, our Airbnb accommodation in Barcelona was owned by a couple who managed three properties, none of which they lived in. Overall, both experiences were great for us. But while Airbnb is a boon for tourists, it is to the detriment of local residents, as explained in this New Yorker article.

Nearly half the Airbnb properties in Barcelona are entire houses or apartments. The conceit of friendly locals renting out spare rooms has been supplanted by a more mercenary model, in which centuries-old apartment buildings are hollowed out with ersatz hotel rooms. Many properties have been bought specifically as short-term-rental investments, managed by agencies that have dozens of such properties. Especially in coveted areas, Airbnb can drive up rents, as longtime residents sell their apartments to people eager to use them as profit engines.

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PyeongChang Olympic ski venue

I’ve decided on a Christmas present for myself – a trip to South Korea for the 2018 Winter Olympics!

I woke up one morning a couple of weeks ago thinking – South Korea is only 2 hours away by plane, February is manageable workwise, and I’m a total fanatic about the Olympics – why not go?

So, I’m going. But I had to make some decisions based on information only on the Internet.

Rooms were hard to figure out. Nothing but guest houses with shared space, or really expensive hotel rooms seemed available. Then, Airbnb came to the rescue! I found a private room not far from the Olympic Stadium, and the hosts speak English!

Then, I had to see whether I could purchase tickets for the Opening Ceremonies. I know that ticket sales for these Winter Games are a little weak right now, but I thought that the opening ceremonies would be sold out by now. They weren’t! I secured my seat for the evening of February 8!

And finally, I had to buy my plane ticket, which was the easiest of the tasks. After I arrive in Seoul, I will take a train from Incheon to Jinbu Station, check in, and have a day to acclimate to the surroundings.

How cold will it be? Will tickets for all events be relatively easy to attain? How convenient is transportation between the various sites? Will I make further inroads in my understanding of the Olympic bureaucracy, and expand my Olympic network? Will the Games actually be exciting?

I look forward to answering those questions!

An Airbnb hosted accomodation in Brazil
An Airbnb hosted accommodation in Brazil

Airbnb helped find accommodations for 85,000 people during the 2016 Rio Olympics. That is, according to Fortune Magazine, 17% of the approximate 500,000 local and foreign tourists who visited Rio during the 2016 Rio Olympics.

Handling spikes in tourist traffic during big-tent events like the Olympics, World Cup, or industry conventions is a challenge, even more so in cities like Tokyo that are already at high occupancy rates during normal weeks. Services like Airbnb have business model which connect travelers with individuals who commonly offer up their own apartments or houses and sometimes more personalized service, for fees often lower than the hotel chains.

The Japanese government has been, contrary to trends in other countries and cities, rather welcoming to Airbnb, as this kind of service potentially opens up the less populated countryside of Japan to repeat travelers who want to see the “real” Japan. Through Airbnb hosts, travelers can stay in rice-field-side houses run by elderly folks whose children have long skipped town and are in need of additional spending cash.

As the “Official Alternative Accommodation Services Supplier” of the 2016 Rio Olympics, Airbnb can argue that it put cash directly in the hands of Brazilian citizens, and helped the government and organizing committee deal with room over-capacity during the Olympics. According to this Fortune article, 421,000 arrivals stayed at Airbnb rooms in Brazil in 2015. In 2016, the year of the 2016 Olympics, the number of arrivals doubled to more than 1 million.

Airbnb in Hokkaido
Airbnb listings for Hokkaido, Japan

The Silicon Valley home-sharing accommodation business has faced first-mover angst. While customers seeking cheaper, more varied accommodations are using Airbnb more and more, the hotel industry in particular is pushing back, lobbying local governments to put a stop to these unregulated competitors.

Even in San Francisco, its home base, Airbnb faces pressure from the government to prove that the Airbnb hosts are indeed residences of the rooms they rent out, not companies that own various condos or houses and rent out rooms like hotels.

But Airbnb, while it has faced push back from authorities, have just been given a very bright green light in Japan. On Friday, March 10, the cabinet of Prime Minister of Shinzo Abe “approved rules…limiting home-sharing by private citizens to 180 days a year,” according to The Japan Times. Prior to this, hosting a room in your home to rent was essentially illegal in Japan.

The impact will be significant. According to this report, hotel vacancies in Tokyo are currently limited, as occupancy rates in recent years have consistently been over 80%, which has allowed the average daily rate (ADR) to climb significantly. With foreign tourist numbers expected to climb, and with the inevitable spikes in demand for hotel rooms for the World Rugby Cup scheduled for Tokyo in 2019 and the Olympics scheduled for Tokyo in 2020, there is continued fear of angry visitors from outside Tokyo and Japan screaming for hotel rooms, certainly with hopes of less expensive options.

Japan Hotel Performance 2007 to 2015

But also significantly, this is an opportunity to expand the number of accommodations available to travelers in the more remote parts of Japan where corporations are reluctant to invest, as well as put tourist money into the pockets of rural folks whose towns have been hollowed out by loss of youth, and a lack of energy to continue with the labor intensive agricultural business.

Japan hand, Terrie Lloyd, believes Airbnb Japan is going to grow the number of room listings significantly thanks to this law, which is expected to be passed easily in the not so distant future. And he believes the impact will be great:

  • People owning homes in areas under served by hotels (pick almost any countryside area in Japan) will now be able to step into the breech and offer accommodation with little/no development cost. This will significantly increase the flow of tourists out to more remote areas, which of course will be a shot in the arm for local economies.
  • 180 days a year means that the average household out in the countryside could make up to JPY900,000 or so a year (JPY5,000 average per night) that would have been impossible otherwise – and with very little outlay – thus offering a low barrier to entry per household.
  • There will be a regional property boom, at least in those areas which have visually attractive tourist assets, and this will encourage other regions who haven’t preserved their traditions to do more conservation work to pull visitors.
  • There will be a rebuilding boom, as relatives of hospitalized elderly and the recently deceased start to realize that instead of allowing a home to decay into a rotting ruin, it can be restored and rented out to local and foreign tourists.
  • There will be a surge in demand for rental cars, as the proximity of accommodation to the train station no longer determines where you want to travel.
  • There will be a surge in demand for services to maintain rooms and to look after foreign guests.

When I saw the CEO of Airbnb give a talk last year, I remember him waxing poetic about the possibilities for the graying countryside of Japan, where curious foreigners meet elderly entrepreneurs who gain a financial reward, and perhaps a personal reward in opening their homes up to the world.

Airbnb Japan screenshot
Screen capture from the Airbnb Japan website

Nearly 20 million foreign tourists visited Japan in 2015, already approaching the 2020 goal. This 47% year-on-year increase has been a revelation to Japan, making citizens and business owners keenly aware that Japan needs to gear up for continued growth, particularly as we get closer to the opening ceremonies of the 2020 Tokyo Olympic Games.

According to this article, the ability for Tokyo to accommodate this sudden influx of foreign tourists has been strained by the supply of hotel rooms. The room shortage is compounded by the weak yen, which results in more Japanese taking vacations within Japan as opposed to overseas. Occupancy rates at hotels in Tokyo and Osaka are routinely over 80%, and sometimes over 90%.

So into the breach steps Airbnb, a peer-to-peer business that connects travelers with individuals who want to open their homes, or a room in their home for rent. Airbnb has exploded worldwide as travelers seek greater choice of accommodations, as well as the possible added experience of personalized service and comfort by the owner. It was once thought that Japan, and its particular sensitivity to privacy, would be a bad fit for an Airbnb model. But Airbnb Japan’s business has grown 529% since last year, while the number of listings in this country has also jumped year on year 373%.

airbnb logo

And this is for a business that is essentially illegal, as Japan’s Hotel Business Law includes taxation of officially recognized accommodations, as well as various regulations around hygiene and safety, all of which Airbnb hosts have ignored.

But now, Ota Ward, one of the 23 districts that make up Tokyo, is hoping to legitimize the model, opening the door to individuals and families who need the income, want the business, and perhaps enjoy the experience of hosting strangers in their homes. Along with Osaka, the Japanese government will be looking closely at Ota Ward, with the hopes of expanding this model over the coming years.

Here’s how Nikkei Asian Review explains it:

In an attempt to eliminate such problems, Ota Ward has published rules and screening criteria. They include a requirement that neighbors who live within 10 meters of a rented property be notified in writing before an application is made. The local fire department must also be advised beforehand. Under the ward’s rules, minimum stays are set at six nights and seven days. Guest information such as names, contact numbers and passport numbers must be kept for at least three years. A host must also set up a window to accept complaints from neighbors and be ready to respond in foreign languages in emergencies.

What’s special about Ota Ward? It houses Haneda Airport, the expanding gateway to Asia and the world. Between 1978 and 2010, Haneda was, for all intents and purposes, the airport for domestic flights. But since 2010, it has taken on significant capacity as a port of call for international flights. Haneda is now the third busiest airport in Asia, and fourth in the world.

And let me tell you, as someone who has flown primarily into Narita International Airport, which requires at least another two to three hours of waiting and travel time to just get into downtown Tokyo, I much prefer to fly into Haneda. Tourists will as well. And wouldn’t it be nice to hop into a short taxi ride to your Airbnb accommodation about 10 to 15 minutes away.

Tokyo International Airport at Haneda
Haneda Airport in 1964, the entry point for Olympians from overseas.

sakura fujiyama,tokyo

In 1964, Japanese officials expected 130,000 foreigners to visit during the Olympics, so they encouraged proprieters to get ready for the world to flock across the seas, not only to Tokyo, but to the beautiful vistas around Tokyo and beyond.

But alas, government projections proved to be overly optimistic as only 70,000 tourists were estimated to arrive that October. Millions of dollars were spent to accommodate more people and make the experience for non-Japanese tourists a good one in popular resorts like Atami and Hakone, but facilities never got close to capacity.

Kyoto hoteliers turned down reservations by Japanese wanting to see the old capitol in all its beauty during the refreshing Autumn season in anticipation of the busloads and trainloads of foreigners instead saw occupancy rates plummet, when instead they should have been near capacity.

When a country holds the Olympics, there is a promise that the tourists will come and the money will flow for hotels and restaurants. It is a promise that goes unchallenged, and proven time and time again to be baseless.

circus maximusEconomist Andrew Zimbalist explains in his fascinating book, Circus Maximus – The Economic Gamble Behind Hosting the Olympics and the World Cup,  that a country which hosts the Olympics may very well be welcoming a large number of foreign visitors (athletes, coaches, judges, media, family members, etc.), anywhere from 10 to 25,000 related to the Olympics. But rarely have there been instances where the number of tourists actually increase. Very often, it is the opposite – tourism decreases, sometimes significantly.

Zimbalist cited China, which dropped 6.8% in foreign visitors from 26.1 million in 2007 to 24.3 million in 2008 when the Olympics were hosted in Beijing. London experienced a year on year drop of 6.1% in overseas visitors from July and August 2011 to July August 2012, when the Summer Games were held there. Athens expected 105,000 foreign tourists per night during their Olympic Games in 2004, but in actually hosted only 14,000 per night.

Zimbalist does write that Sydney’s number did increase modestly from 2.5 million in 1999 to 2.7 million in 2000 when the Games were held in Australia, but that was more than a quarter less than projected, resulting in low occupancy rates on top of expansion hotel expansion in anticipation of higher numbers – just like in Tokyo in 1964.

So what’s happening?

A dynamic that is not understood is that Olympic traffic is not adding to overall numbers – it is merely replacing traffic that would have come. And yes,

From the book,
From the book, “Tokyo Olympics Special Issue_Kokusai Johosha”

Every time you hold a mega-sports spectacle like the Olympic Games or the World Cup, you simply won’t have enough accommodations to handle the spike in visitors. The Tokyo Government anticipated 30,000 visitors so they asked area hotels to expand and refurbish for foreign tourists, schools and companies to open up their dormitories, and people living in Tokyo to make their homes available to foreigners.

They also had 10 passenger liners visit Japan during the Olympics. These were big ships, 5,000 to 11,000-ton ships with names like “The Brazile Maru”, “The Vladivostok”, “The Oriana”, “The Khubarovsk” and “The Empress of England”.

Ten passenger liners arrived in the ports of Tokyo and Yokohama from October 8 to 13, housing over 5,000 visitors, serving as the perfect temporary housing units. All of the ships departed Japan by October 26, two days after the completion of the Games.

According to Sports Illustrated, around 115 buses were prepared to shuttle the visitors between their floating hotels in Yokohama and the Olympic venues.

Handling the spike in 2020 is definitely a concern for planners. Think Airbnb – get that closet under the stairway ready. Could get you 20,000 yen a night.

#9 of 11 Brazilian Airbnb's You Must Experience
#9 of 11 Brazilian Airbnb’s You Must Experience

Japan may need to learn to love Airbnb.

As the democratization of the hotel industry takes the inevitable step of your home becoming another hotel room, Rio knows it will need to consider all options to accommodate the spike in visitors during the 2016 Summer Games in Brazil.

According to ESPN, Airbnb is now the official “alternative accommodations” sponsor of the 2016 Games. That’s an amazing 20,000 spaces in peoples’ homes available to visitors.

During the Tokyo Olympics in 1964, the government came up with various ideas to increase the number of rooms. One of the ideas was asking owners of private homes to make rooms available to foreign guests. A total of 1,445 beds in 588 homes were available to guests, a 20th century version of Airbnb. But, different from Airbnb, the government made sure that Japanese in charge of restaurants, hotels and shops were provided training and information on food sanitation, medical and first aid services for foreign guests, even to the owners of the private homes.

Let’s see how it goes in Rio. In the meanwhile,