Tourism pressure as a driver of social inequalities: a BSEM estimation of housing instability in European urban areas

There is a certain agreement in the regional economics literature on tourism development as a lever of territorial cohesion and regional convergence. Yet, evidence about its impact on social inclusion within destination regions is scant. The emerging literature placing tourism development as a driver of inequality relies mostly on qualitative methods and individual case studies, thus overlooking a cross-national perspective. In this article, we address this gap by estimating the impacts of tourism growth between 2013 and 2018 on housing instability through its effects on rents and the perceived financial burden of housing costs. Based on a combination of data sourced from Eurostat and a geo-located dataset of Airbnb listings, a Bayesian path analysis model was specified with a sample of densely populated areas in 85 European regions. Results reveal the controversial influence of tourism on urban destinations, indicating how the increase in the number of visitors may benefit mean incomes and relieve the pressure on housing costs, while at the same time, driving a higher dispersion of income and residential displacement. A clear difference is established between homeowners and tenants to this regard: the former can use the opportunities of rent extraction in the platform economy to withstand the economic pressure of tourism, while the latter are more exposed to the risk of having to leave their homes.