Accommodation Challenges in Kosovo: Can Airbnb Meet the Summer Demand?

Rreze Cuca, from Tuz, Montenegro, was not able to find accommodation in Prishtina in 2022 when two of the country’s biggest festivals—DokuFest in Prizren, and Sunny Hill in Prishtina—took place on the same dates, causing a tourist surge.

“For 8 days of the festival in Prizren, we paid rent for almost a month’s stay in an apartment in Prishtina as we could not find anywhere to stay for certain days. The owner would not let us pay less than one month,” she told BIRN, explaining that she had lived in the University of Prishtina’s dormitories for several years during her studies.

“I had no idea what the ​​accommodation capacities were like,” Cuca said, adding that she “took [finding a place] for granted, coming from a tourist place that has no such problem.”

The rise in summer tourism in Kosovo, particularly because of the organisation of major international festivals, has highlighted the country’s accommodation shortcomings, especially in the capital. Airbnb is emerging as a solution to bridge the gap in hotel accommodation capacity, however, it has failed to meet growing demands. 

Sunny Hill, the largest festival in Kosovo, will take place from July 25-28. The festival, which was founded by global Kosovo Albanian popstar Dua Lipa and her father Dukagjin, is expected to attract huge crowds. The country’s lack of short term rental options are anticipated to once again be obstacles to festival goers. Thousands have bought tickets to the festival already, and more are expected to purchase them following the announcement on July 15, 2024 that Bebe Rexha, another ethnic Albanian from North Macedonia, will join the festival as a headliner.  

Increased Demand for Accommodation

Historically, the majority of Kosovo’s foreign visitors were from the country’s large diaspora, many of whom have their own houses or apartments in the country. However, the growing number of events, especially during the summer, has made Kosovo a more popular destination for international travellers, which has over increased the need for more accommodation options.

Alban Kastrati, managing partner at the Kosovo based Republika Communications Agency and organiser of the Sunny Hill festival, told Prishtina Insight that accommodation requests during the festival period exceed the hospitality sector’s capacity.

“In every festival edition, platforms like Booking and Airbnb are usually 100 percent booked, which is a direct indicator of the festival’s economic impact. Although the number of private lodgings in Prishtina and its surroundings is increasing, along with family and friend accommodations, it is not sufficient to meet the growing number of festival-goers,” Kastrati stated.

Kastrati further explained that there are many requests for accommodation solutions in and around Prishtina.

“As a festival, we are working to offer new accommodation options for participants because the number of non-resident attendees is increasing. We want the Sunny Hill experience to be seamless, without the interruption of long-distance travel,” he added.

The festival, which was founded in 2018 is the largest music festival in Kosovo and aims to put Kosovo on the map as one of the biggest festivals in Europe. It  has grown annually from 50,000 attendees over a 3 day period in 2018 to 90,000 attendees in the 4-day festival period in 2022, despite it being also organised in Tirana, Albania  because of location disputes at the time. 

Sunny Hill has brought major international performers such as Miley Cyrus, Calvin Harris, Martin Garrix, and J Balvin to a region often overlooked by big name celebrities.

Similarly, Dokufest, a documentary and short film festival that takes place in Prizren , this year a couple of days after Sunny Hill, from August 2-10, has annually attracted thousands of visitors, with the highest so far being 19,000 visitors in 2019.

According to data from the Ministry of Industry, Entrepreneurship, and Trade, Kosovo officially has 490 functional accommodation units,  with an overall capacity of 7,368 rooms and 11,572 beds. The regions with the most accommodation units are Prishtina, Peja/Pec, and Prizren.

Regarding the need for accommodation capacities in Prishtina, surrounding municipalities such as Fushë Kosova/Kosovo Polje and Gracanica also offer solutions for festival enthusiasts.

In the capital, summer also sees the organisation of the Beer Festival, Gastronomy Festival, Opera Festival, and more. On July 15-21, in Peja/Pec the Anibar Animation Festival also took place. 

The lack of accommodation capacities has allowed for platforms such as Airbnb and Booking to have an increased presence in the country, although they do not fully meet demand.

Airbnb as a Solution on Filling the Void on Accommodation

Data from  Airbnb and Booking shows that Kosovo has over 1,000 units registered. Most of these units are situated in Prishtina and Peja region, which happen to have the most accommodation requests.

Marigona Bajrami, who is from Prishtina and has been an Airbnb host for two years, notices that demand is the highest in the summer and in December.

“For two years, I’ve been hosting on Airbnb. The highest interest has been in July, August, September, and December. My apartment has two rooms for four people in the capital,” she said.

She pays a fee to the platform. “As a host, I pay 3.0 percent of the total booking amount to Airbnb,” she added.

Naim Kastrati from Vushtrri/Vucitrn has also started his Airbnb activity one year ago, renting out during the summer and winter seasons.

“I’ve been renting out for a year, mainly to the diaspora. Some citizens don’t register these properties with the tax administration immediately as they are unsure about the year-round demand,” he stated.

The Kosovo Tax Administration, ATK, told Prishtina Insight that they sent requests to Airbnb and Booking companies to provide information to ATK on who their clients (both renters and leasers) are. 

“Booking has responded positively to our request, appointing fiscal representatives with whom ATK has held two meetings, and they are currently undergoing procedures in accordance with the current legislation,” the statement from ATK reads. “Meanwhile, Airbnb has not yet responded to our request,” it further explains.

Kosovo has also signed agreements with several countries on the Elimination of Double Taxation regarding income tax, which aimed at preventing tax evasion and avoidance. The latest agreement is from 2021 with the Republic of Ireland.

A double taxation agreement in an agreement between two or more countries to eliminate or reduce taxes that are imposed twice on the same goods or services in situations where double taxation concerns arise, which often occurs in international transactions.

Regulatory Challenges for Airbnb

Unlike other countries in the EU and worldwide, the concept of Airbnb in Kosovo is still relatively new. The state has not yet developed policies to regulate  short-term rentals. Some properties are declared with the Kosovo Business Registration Agency through real estate firms or agencies that rent them out as Airbnb.

Gezim Brahaj from Prishtina mentioned receiving requests from Spain, Colombia, Switzerland, Turkey, and Albania.

According to Airbnb or Booking regulations, taxes are paid directly after each booking or at the end of the month, and then processed further for each country.

In Kosovo, Airbnb operates similarly to most other countries. Property owners can create accounts on Airbnb and list their spaces for short-term rental. They set the price, availability, and other information about their space, including stay rules.

However, institutions such as the statistical and tax agencies do not have precise data on the number of these units in Kosovo, as they have data for hotels or hostels. The Business Registration Agency did not respond to BIRN regarding properties registered for temporary rentals by the time of publication. 

Mërgime Shala, an official for the Hotel and Tourism department at the Kosovo Statistics Agency, told BIRN that they do not have data on the number of Airbnb units.

“We are trying to include these accommodation units, but currently, we don’t have concrete information,” she said.

The Kosovo Tax Administration also lacks data on who pays taxes from Airbnb rentals and other residential leases.

“There are taxpayers in Kosovo who offer rental services through platforms like Airbnb and Booking, registered either as businesses or as individuals, who declare and pay taxes. However, we do not have selected information on who these landlords are,” it stated.

Hysen Sogojeva from the Hotel and Tourism Association said Airbnb significantly aids the insufficient hospitality sector but emphasised the need for reporting and taxation of guests.

“This helps Kosovo’s hospitality sector, especially Prishtina, which lacks rooms for large events. Like hotels, Airbnb hosts should report guests, or the ministry should obtain data from Airbnb. Hosting foreign guests entails responsibility and requires reporting,” he stated.

Kosovo Tourism Strategy

The Ministry of Trade, Entrepreneurship, and Industry in Kosovo has issued a draft tourism strategy for the 2023-2030 period, noting that the tourism sector has been growing since 2022 after the pandemic.

The vision of this strategy is for Kosovo to become a sustainable and competitive tourist destination in the Western Balkans by 2030, prioritising natural and cultural tourism while also addressing other emerging trends driven by domestic dynamics and global influences.

Key objectives of the tourism strategy include promoting Kosovo’s tourist image globally, enhancing tourist information through digital methods,  increasing accommodation capacities and upgrading infrastructure, expanding sustainability standards and competitiveness, strengthening human resources to boost workforce skills and improve services, and developing winter tourism.

The strategy emphasises that visitors to cultural festivals are primarily locals or from the diaspora.

“A small percentage come from the region, EU countries, and the USA. The most prominent festivals, especially internationally, are Dokufest, a film festival held in Prizren, Sunny Hill Festival, an annual music festival in Prishtina, and the international animation festival in Peja, Anibar,” the strategy states.

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