Barcelona is booming. Tourism levels are at an all-time high… and everyone wants a piece of the Catalan pie! Unfortunately, it’s only natural with so many properties on offer to tourists that some are going to be ‘illegal’…. Times are tough in Spain – people want to make money… but at what cost? At who’s detriment?
As Product Manager of HostelBookers, I have learned that especially over the past few years there has been an alarming influx of these ‘illegal’ properties trying to infiltrate the market. This may mean that they:
A. operate without a business license altogether OR
B. operate without a valid business license IE – not a true representation of the type of license they should hold, in comparison to what they are
While a lot of these licenses are legible in the various languages they are submitted in, it is also quite common that they are written in a regional language other than a standard Spanish understood by many OTA employees. In Spain, there are seventeen different regions, each region usually with their own laws and language. In Barcelona, Catalan is common for legal documents – very difficult for many Spanish staff to interpret every line as meant. While OTA’s have multiple dedicated departments, they are not dedicated legal specialists who are able to decipher every contract in every region, for every language… the amount of time needed to achieve this is largely unattainable.
So what happens when these ‘illegal’ hostels and properties are operational and ‘stealing’ bookings… what can the legal properties and organisations like ACATUR do? They report them to local authorities, who visit the property to view the license and premise. In turn, they fine them and grant them a period of time to obtain the correct license. The property is not immediately shut down… and therefore will sometimes stay on the books of OTA’s… this happens again the next month… and the next. Another small fine in comparison to what the property earns, with further extensions granted.
Frustration ensues from the ‘legal hostels’ of the lack of action of local authorities to follow through their job professionally. They feel they are not supported. Who can they go to who will listen – who will assist? OTA’s are limited in the actions they can take. It really does greatly start and finish with the local laws and authorities – the people that govern and oversee this part of the industry in Barcelona.
ACATUR have obviously presented their case on T.V (see link to program in Catalan) and at various conferences held by OTA’s. Their concerns are not just for their businesses, but also the customer. Fire & safety issues are raised, especially if there are not adequate escape routes on premise for a business operating on incorrect licenses. This is detrimental to the customers, the holidaymakers who unassumingly and potentially are putting their lives at risk.
Mats Diedrichsen, Director of Ecommerce at HostelBookers, flew to Barcelona recently to discuss the concerns of ACATUR. While sympathetic to their cause and happy to explore what HostelBookers can do to help their situation, he admits that there are limitations… and agrees that the local authorities must do more to lead – not just assist. Asked on his impression of ACATUR, he states ‘ They are a very well organised hostel organisation…by far the best that I am aware of. The PR coverage in local press in Barcelona is very impressive. Other destinations that have similar issues should really take a look and follow their lead.’
Many new properties that have entered the Barcelona market recently are not just legal – but huge. St Christopher’s already opened last year and made a big splash – winning ‘Best Newcomer’ in HostelBookers ‘Awards For Excellence’. In the lead up to Summer 2013, over a thousand new dorm beds are estimated to be on the way. Generator is set to open a hostel and a hotel imminently…. and multiple applications are made from new Barcelona properties weekly to advertise on OTA sites. No wonder why other hostels who have had it so good for so long are sweating. Their businesses are being hit from all angles… and they have little control of this.
Having monitored and being well informed of the illegal property situation, Miguel Moreno, Product Team Leader at HostelBookers states ‘Generator, St. Christopher’s – this is the type of competition that ACATUR and legal hostels and properties don’t mind, as it is fair competition. These are the types of properties that give our industry a good name… they don’t ruin the good reputation of the legal hostels like Urbany, Equity Point and Be Hostels. It is the illegal hostels, the ones that don’t have a proper reception, that do not have to pay for things like licenses, insurance, pay tax for employees…. these are properties that introduce an uneven playing field… they pay nothing, but poach business and earn the money that should be distributed to valid businesses. If they wish to play, they should do so on an equal basis. They need to pay for proper licenses or face being closed down by local authorities’.
Carles Gras – Director of ‘Equity Point’ and President of ACATUR, was kind enough to comment on the situation that ACATUR and Barcelona find itself in today. When asked about their next steps, he states ‘Next steps for ACATUR are to reinforce contacts with local authorities so we are their contact for whatever happens related to the hostel industry. We also participate in the new law for hostels in Catalonia. At the same time, we have started contact with all portals selling hostels beds’.
I ask, ‘Have there been any property closures recently, based on the work you have done?’ Carles replies ‘Yes, there has been one property closure, and a second one is very close according to our information.’
The growing strength behind ACATUR has led to an influx of interest on membership and benefits. Carles clarifies this area with, ‘To be a member of ACATUR you just need to download the form from internet, www.acatur.cat and send it to us with your licences from the local authorities (all of them). Only fully licenced hostels that have passed all controls can be a part of ACATUR. The association has a low cost for members and there is no commercial work to be paid. We do all our work by ourselves using our time without any paid salary from ACATUR’.
So what are the benefits? Carles says, ‘The benefits should be visible the following years if we can regulate the sector. We want the following – that being a part of ACATUR represents for our members a signal of quality in the market’
So – ACATUR have definitely made progress. People are waking up…people are listening and understanding the problems that Barcelona’s legal hostel and hotel industry currently face. OTA’s are making the effort to fly to Barcelona, to explore ways that ACATUR and the industry can be supported. The hostel industry is still far away from being regulated, but at least there is a start – a foundation for others to build off. Like New York’s problems before it, Barcelona will not be the last city to experience illegal operators who destroy the industry’s good name and consumer’s perception. However, new organisations like ACATUR can be formed in other cities… to stand up and make a difference.
“I am only one, but I am one. I cannot do everything, but I can do something. And I will not let what I cannot do interfere with what I can do.”
Famous Quote from Edward Everett Hale