Finnish capital planning rules for Airbnb market

Last year, there were 10,000 hotel rooms and 2,300 Airbnb properties on offer in Helsinki, where municipal leaders plan to begin work on new regulations in the spring.

Image: Petteri Sopanen / Yle

Of all the accommodation available in Helsinki, about 20 percent is covered by Airbnb – an online service where private individuals can rent rooms or whole properties to visitors.

Researcher Pekka Mustonen from Helsinki city administration says that statistics compiled by AirDNA show that there were 2,300 Airbnb-accommodations available in Helsinki last year. In contrast, the number of hotel rooms totaled 10,000.

However that does not mean that a fifth of all overnight stays in Helsinki occurred in Airbnb-rooms, Mustonen says.

“Hotels in Helsinki are boring”

Anna Varakas has rented her property in southern Helsinki for two years. Image: Ronnie Holmberg / Yle

Anna Varakas has been renting her property in Ullanlinna through Airbnb for two years, and says that the demand for the 20 square metre flat close to the seafront has increased over time.

Varakas understands why visitors to Helsinki are interested in Airbnb. “In my opinion, the selection of hotels in Helsinki is rather boring. In terms of quality and price, Airbnb has a lot to offer,” she says.

According to her, a typical guest is a German or British couple working in a creative industry. On the other hand, she has not accommodated many Asian tourists.

Regulation of Airbnb planned

The figures of Helsinki's Airbnb beds became as a surprise to Mustonen and Laura Aalto, the chief executive at Helsinki Marketing.

“We all know that in large European cities Airbnb is huge. But it has perhaps not occurred to us that here in Helsinki there are thousands of places on offer at all times,” Mustonen says.

Aalto considers the news on Airbnb positive for Helsinki tourism, as last year the city recorded four million overnight stays for the first time ever. Airbnb provides flexibility to the supply of traditional accommodation and both are needed, she says.

Nonetheless the city of Helsinki plans to introduce rules for residents who want to rent their property through Airbnb. Planning work for the system of regulations is due to begin this spring.

Aalto denies that the purpose is to slow down the Airbnb market.

“It is important for the city to do something before this turns into a problem. For example, rents could rise or certain areas of the city become exclusive to Airbnb guests.”

Hotels and hostels lose

Timo Lappi from the Finnish Hospitality Association Image: Ronnie Holmberg / Yle

Among Finland’s largest cities, Helsinki has the most to offer in terms of Airbnb housing, while Espoo, Tampere, Vantaa and Oulu are far behind. Outside of the most populated areas, Rovaniemi offers close to 400 Airbnb properties.

Last year, the sales generated by Airbnb are estimated to total 58 million euros in Finland, of which 24 million comes from Helsinki.

Timo Lappi from the Finnish Hospitality Association says the growth of Airbnb is not necessarily good news.

“When Airbnb grows and becomes a business-like activity, hotels and hostels lose,” Lappi says.

According to Lappi, Airbnb used to be part of the sharing economy, but it has now turned into a professional business. Investors may buy several flats in a building and engage in a full-time accommodation business without establishing a hotel, Lappi says.

Varakas, the Airbnb host from Ullanlinna, disagrees. Airbnb is changing the market in a way that hotels do not like, she says.

“I don’t know of any other industry where professionalism is considered a threat.”