When Tommaso Pediconi turned his family house in the old Jewish Ghetto area of Rome, one of the most ancient and beautiful neighbourhoods in the city, into an Airbnb rental more than 10 years ago he was one of the few in the area to run such a business.
Given the large number of tourists who poured into the city and the boom in the Airbnb model, it soon became his only source of income. Business was going so well that he decided to rent two other flats in central Rome and put them on the platform.
Today, Mr Pediconi, 34, has no clients left. “I had reservations until October but they were all cancelled, I had to pay back a lot of money,” he said.
The collapse in tourists visiting Rome during the pandemic has burst the city’s Airbnb short-term rental bubble, forcing some indebted landlords into fire sales of their flats to avoid defaulting on their mortgages.
In recent years, vast numbers of flats in central Rome close to monuments such as the Colosseum and Trevi fountain have been repurposed for short-term letting by amateur landlords seeking to profit from the Eternal City’s estimated 15m visitors a year.
Now, estate agents say that the collapse in visitors has left landlords overstretched after they speculated on Rome’s tourism boom at a time when the wider Italian economy has been stagnant. Many are rushing to convert their properties into long-term rentals or sell them to pay off debts, and estate agents say sales prices are down by about a third.
“There are forced sellers now, and that is a sad and inevitable consequence of the collapse in tourism,” said Bill Thomson, chairman of Italy for Knight Frank.
“Many people in places like Rome used their profits to invest in even more properties, some have bought five or even 10 of these. There was always the risk that too many people would jump on the Airbnb bandwagon at the same time.”
Rome was the sixth most popular city in the world for total nights booked on Airbnb in 2018, according to the company, behind only London and Paris in Europe.
The company claimed that it contributed nearly €1bn to the Roman economy in 2018 alone through bookings and subsequent spending by its users — the largest of any city in Italy. This demand provided a rare bright spot in a local economy that has fallen far behind Italy’s financial capital Milan over the past decade.
Mr Pediconi said he used to rent out his former family home for €120 a night. Now it is on offer for between €40 and €50 per night. Because of the pandemic, all bookings were cancelled and reimbursed, and he had to cancel the rental contract for the two other houses he was managing.
“I never thought this could happen. I’m now waiting and hoping for a swift recovery but I am sure many who started doing this as a job will perish,” he said.
“At the moment I’m trying to rent the house to residents, but I haven’t been able to do it yet, although I have lowered the prices by 75 per cent.”
Donato Cristiano, an estate agent in Rome, said two-room flats in the city’s historic centre that rented for €1,300 a month before the Covid-19 pandemic were now on offer at €900, including utilities.
“We are talking about flats that a few years ago you could easily rent for €2,000 a month as a holiday rental,” he said.
The boom in Airbnb rentals in Rome in recent years has resulted in the online lettings platform falling under greater scrutiny from the heavily indebted local government, which in June announced a new “tourism tax” levied on guests staying in short-term lets in Italy’s capital.
Rome’s mayor, Virginia Raggi, said the nightly €3.50 charge for Airbnb guests that is paid directly to the municipality of Rome, would help “re-establish fair competition between [hotel] operators, fight the black economy and track tourist flows”.
Estate agents say that as a result of the collapse in short-term rentals many landlords have tried to repurpose their properties into longer-term rentals instead of selling, but supply currently vastly outstrips demand.
“At the moment, the problem is that there are too many properties for rent and not enough people, due to the lack of tourism and prolonged remote work,” said Carlotta Marchionne, an estate agent working in the centre of Rome.
“The phone is no longer ringing. Our office has never been so quiet.”