As the EU is wrapping up its public consultation on housing amid mounting calls for tighter short-term rental (STR) restrictions, European leaders stand at a vital crossroads. The choices made today will determine if Europe emerges as a leader in smart, inclusive tourism — or retreats into self-defeating placebo measures that leave local communities and families behind.

Let’s begin with the basics. The EU’s most recent regulation on STRs has yet to be implemented. Instead of leaping to fresh legislation, Europe must ensure the current framework delivers. Across member states, the groundwork remains unfinished. Digital registration systems are incomplete and essential data interfaces are missing. Before rewriting the rulebook, we owe it to citizens, local authorities and the wider tourism ecosystem to let these reforms take root and show results.

The stakes go far beyond bureaucracy. Tourism remains one of Europe’s key engines of economic growth and competitiveness — creating jobs, reviving rural and underserved communities, and funding vital public services via the substantial tax receipts from activities that cannot be offshored. With 60 percent of Airbnb stays hosted outside cities in 2024, short term rentals have played a pivotal role in boosting and better distributing tourism outputs across European communities, while providing affordable options for European families to travel to cities and discover new destinations across the EU. In rural areas, Airbnb bookings made by families in Europe increased by more than 200 percent between 2019 and 2024.

However, traditional tourism players have steered a concerning drift toward an increasingly ‘hotel only’ model that has weakened Europe’s tourism offering and affordable travel options: soaring accommodation prices with fewer, wealthier visitors going to the same places and a concentration of gains in the hands of powerful hotel chains.

This might have severe consequences. Populism does not typically thrive in the wealthy districts of the EU’s most popular cities. Instead, it feeds on the frustration of non-urban communities that increasingly feel excluded from prosperity. One of the most overlooked opportunities to bridge this growing divide is the potential of STRs to help redistribute the economic benefits of travel across European communities.

Turning our back on tourism growth also risks accelerating Europe’s current downward spiral in political influence, while neighboring regions such as Middle Eastern countries increasingly are opening up to build political soft power. Europe cannot afford to close doors and lose influence against an increasingly disrupted international order.

The continent’s existing tourism model is facing real challenges, from overtourism in iconic destinations to competition for space with much-needed housing in some city centers. But STRs have not caused these trends and blanket bans or crude restrictions are not the answer. From Amsterdam to Paris, and Edinburgh to New York, severe STR restrictions have consistently

failed in improving the housing situation in cities, while contributing to raising hotel rates and pricing out everyday travelers.

Instead, by working with digital travel platforms and the wider ecosystem on a common framework allowing balanced local regulations and incentives, we can protect the diversity of accommodation choice for EU citizens while shifting more tourism toward less-visited communities, and ensure the benefits reach those who need them. Doing so would ease overcrowding in hotspots, open economic doors in neglected rural, suburban and small-town areas, reduce political divides, and sustain tourism as the economic — and cultural — lifeblood Europe desperately needs in an unstable world.

So how should we start? First, let’s agree on where less or more tourism is needed, and make sure local rules contribute to improving the balance of travel across the continent.

●      Conduct a comprehensive impact assessment of the STR regulatory landscape:

As EU short-term rental rules are implemented across member states, European leaders should be guided by data from platforms and prevent further fragmentation of the regulatory landscape. The European Commission should task independent researchers with an impact assessment of existing rules to ensure they truly deliver on the promise of affordable housing.

●      Promote fair and coherent measures to manage tourism flows in saturated destinations:

Cities like Amsterdam or Barcelona that have identified overtourism concerns need to fundamentally rethink their destination marketing strategies, shifting focus from promoting overcrowded tourist hotspots to encouraging a more balanced dispersal of visitors. STR can help. As hotel nights account for 80 percent of guest nights in Europe, caps and quotas aimed at curbing overtourism should apply uniformly across all types of tourist accommodation.

●      Champion  a ‘Tourism for All’ agenda fostering more inclusive and better-distributed travel that benefits European communities:

Establish a dedicated European fund for rural tourism and local lodging initiatives, channel support toward destination campaigns beyond major cities, and create an ‘Erasmus for Social Tourism’ to help Europeans discover destinations across the continent in an affordable way.

Tourism and short-term rentals are part of the solution to build an open, dynamic and inclusive future for Europe. The alternative will leave thousands of EU citizens without vital income to stay in their homes and reduce affordable and sustainable accommodation options for citizens when they travel within the EU. But that vision will only become reality if Europe steers away from one-size-fits-all solutions and token policies and, rather, promotes a sensible framework for data-driven, proportionate and locally tailored solutions.