RIO DE JANEIRO – When Carlos Eduardo Muzy first rented his beachside Rio de Janeiro apartment on Airbnb in 2019, he just wanted some extra cash. What he got was a career managing some 100 properties – and a front-row seat to how the tech platform is transforming one of South America’s most famous tourist destinations.
In Rio’s Ipanema neighborhood, there is now one Airbnb listing for every seven homes, a Reuters analysis of Airbnb (NASDAQ: ABNB) data collected by analytics firm AirDNA showed.
Since 2019, the oceanfront neighborhood made famous by the bossa nova classic “Girl from Ipanema” has seen a 24% rise in listings, in line with neighboring tourist hot spot Copacabana.
The surge has changed Rio’s rental landscape, sparking tensions in condo associations, bringing fresh competition for hotels, and creating businessmen like Muzy, who charge apartment owners fees of 20% to 30% to manage their short-term rentals.
Like many, Muzy started small, renting his own Copacabana apartment, but saw an opportunity when neighbors asked him to manage theirs too. His rental management firm SuhcasaCopacabana employs 17 people and has accumulated around 5 million reais ($916,136.83) in reservations in the last 12 months.
“We basically double in size every year,” he said about the number of listings his firm handles.
Muzy books reservations through short-term rental platforms like Airbnb (NASDAQ: ABNB), but has also created his own site and opened a storefront in Copacabana to offer hotel-like services, such as free bag storage before check-in.
Rental management firms like Suhcasa often hire teams to clean homes, wash linens, decorate and photograph properties – and sometimes even cover the costs of minor repairs, which are discounted from future rental revenue, owners told Reuters.
The emerging market is not without tensions in Rio, echoing issues in other cities where Airbnb has taken hold.
In Mexico City, another hot Latin American destination for tourists and remote-working “digital nomads,” residents have complained about the platform pushing up rental costs, leading the government to tighten the rules for short-term rentals.
Experts say it may be a matter of time before authorities push back in Rio, as they have also done in New York, Los Angeles, and Montreal.
“In Brazil, it takes a little longer for these things to happen,” said Leonardo Schneider, vice president of Secovi-Rio, a real estate industry association. “But I have no doubt the state will intervene.”
Legal restrictions on short-term rentals are a possibility, but Schneider said he believes authorities will want to tax rental management firms now competing with hotels.
LONG-TERM RENTALS TAKE A HIT
Airbnb (NASDAQ: ABNB) takes housing concerns seriously and is willing to work with governments to establish good policies, share best practices, and partner to contribute to tourism, the firm said in a statement.
The surge in short-term rentals started making waves in Rio’s real estate market a few years ago, Schneider said, making long-term rentals harder to find in the most touristy neighborhoods and complicating life for building managers.
Horacio Magalhaes, president of the Society of Friends of Copacabana, a neighborhood association, even called a meeting between administrators and a local law firm to explain legal issues involving short-term rentals.
He said administrators’ concerns ranged from annoyances like tourists partying on work days to higher utility bills and safety concerns about building access.
While some building managers looked for ways to ban short-term rentals, most did not want to curb them for fear of upsetting opposing owners who have come to rely on the revenue.
“They were just looking for guidance on how to create rules,” Magalhaes said. “The hard thing is to find a balance.”
($1 = 5.4577 reais)
(Source: ReutersReuters)
