News in English

2019.12.02 09:03

Lithuanian hoteliers hard-pressed by competition from short-term rentals

Vesta Tizenhauzienė, Darius Šlapelis, LRT TV, LRT.lt2019.12.02 09:03

Short-term rent is becoming an increasingly popular alternative to hotel accommodation. Lithuanian hoteliers complain that they are being pushed out of business by hardly regulated rentals.

Algis does not live in Lithuania, but he regularly comes for short visits. When he does, he usually stays at a short-rental flat. Not only is it cheaper than staying at a hotel, Algis says, but he also finds it more convenient.

“There's more privacy in a rented flat, you can have friends over and no one will monitor who is coming and going,” he tells LRT TV. “In a hotel, you have to buy their food, which is more expensive, whereas in a flat, you can make a meal for yourself whenever you want.”

Short-term rentals, often advertised on platforms like Booking.com or AirBnB, have become abundant in Lithuania's accommodation market.

It is estimated that in Vilnius alone, some 2,000 properties are listed for short rents.

“Migrant workers who come to work for construction companies perhaps stay at short-rental properties, at least part of the time, transiting tourists, many people,” Vaidas Šuklys, a real estate expert, names some of the clients using the service. “It is probably on the rise throughout the world.”

Meanwhile hotel owners say that short-term rentals represent unfair competition. The Lithuanian Association of Hotels and Restaurants approached the government numerous times to demand stricter regulation for short-term rental landlords.

Arvydas Kalėda, a Vilnius-based hotelier, says he is planning to close down his hotel, because staying in the market is becoming increasingly difficult due to competition from short-term rentals.

Some landlords own several dozen properties in central Vilnius, he says. “That's hardly small business, it is a very powerful big business,” yet it enjoys incomparably easier conditions than hotels, according to Kalėda.

Hotels are subject to stricter regulations and inspections, whereas owners of short-term rental properties are only inspected by the Tax Inspectorate to see if they pay their taxes.

Some do not – failing to declare all or part of their revenue from rentals is one of the most common violations detected by the tax authority.

“We collect and analyse information and putting together lists of, if you will, risky individuals,” Vidas Osipovas, head of the Control Department of Panevėžys County Tax Inspectorate. These individuals are then monitored and alerted that their income declarations are incomplete, he adds.