Tel Aviv and Jerusalem are among the world's 10 most expensive cities for Airbnb vacations, financial news agency Bloomberg reported on Tuesday.
The Bloomberg Index released Tuesday analyzed Airbnb rates around the world based on the "average daily cost of lodging in private dwellings."
Airbnb is an American company that operates an online marketplace and hospitality service for people to lease or rent short-term lodging. It includes holiday cottages, apartments, homestays, hostels and hotels.
Bloomberg ranked Tel Aviv as the fourth most expensive city, with hosts asking an average of $183 a night. Jerusalem ranked ninth, with rentals averaging $173 per night.
Three other Middle Eastern cities made the top 20 list as well: Dubai came in fifth, at $185 a night, Riyadh was ranked 11th with $171, and Kuwait City ranked 15th, with $155.
"Miami and Boston took the top two spots in the average daily cost of lodging in private dwellings for the second straight year. Airbnb owners asked for $205 a night and $195 a night, respectively, in the two cities," Bloomberg said.
"However, the Middle East has been climbing in the annual index and this year has five destinations among the top 15 priciest global cities: Tel Aviv and Dubai at Nos. 4 and 5, and Jerusalem, Riyadh and Kuwait City also near the top.
Dr. Yoav Kerner of the Ben-Gurion University in the Negev told Bloomberg that "pricey Airbnb listings in Israel may have more to do with the high cost of housing in Tel Aviv and Jerusalem."
According to Kerner, "Since Airbnb owners want a premium over what they could earn renting out their units for a full year, that drives up short-term rental costs."
Mally Bitzur-Parnas, the CEO of the global consulting firm Tefen Israel, told Israel Hayom: "More than a third of those who rent out their apartments in Tel Aviv have three or more dwellings. They ended up joining Airbnb because of the red tape and the government's efforts to fight real estate investors. This results in everyone joining Airbnb."
Real estate law expert Shmuel Kamil told Israel Hayom that "despite the high value of property in central Israel, their return on investment is about 2% of the property's value after costs are deducted."
He added that "hotel rooms in Israel are very pricey, mainly because of regulatory requirements that add costs. This creates incentives for owners to rent out their apartments through short-term rental sites, that can generate a yield of 4% and much higher than that."
He said that "property rights and freedom of contract would bring about fair prices that benefit both sides and despite the many costs associated with renting out dwellings – including maintenance and cleaning – the short-term rental market is a very attractive option for vacationers. The Bloomberg Index has found a clear correlation between the price of real estate in the prices charged by owners."
