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Barcelona mayor defends ban on tourist flats saying ‘drastic’ action needed to cut housing costs
(www.theguardian.com)
this post was submitted on 19 Nov 2024
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Obviously the same 32 million tourists won't come if the same overnight accommodation isn't available and the rest are looking at higher hotel costs due to saturation
It's the right thing to do to serve the local residents housing needs. But the local residents also need the tourist as many work in hospitality / leisure etc
Will be interesting to see what happens
Even if they raise hotel prices 50%, they'll still be cheaper than hotels in other massive cities. If people don't mind paying $300/night in Paris or London, they'll be okay with paying $150-200/night in Barcelona.
that's not how it works. tourism is elastic to only a small extent. the rest is in an equilibrium. barcelona is in constant competition with other spanish cities, portugal, french south coast, italy etc. if barcelona raises hotel prices 50% and nothing else changes, very very many people who were on the fence about their destination and chose barcelona will easily choose the now comparatively cheaper alternatives.
Given that supply is being removed, it is likely that demand will adjust to the new hotel supply.
In markets the typical response to a sudden shortage is an ________ in ______, leading to a reduction in demand, as the demand shifts to alternatives (other destinations, non-consumption) until a new equilibrium is found.
That's right - an increase in pricing reduces demand by pushing people to alternatives, reducing demand.
Cool, but the Barcelona local government isn't increasing prices; they are reducing supply.
That's right, a reduction in supply increases prices.