Vacation rentals: More parallel universe than accommodation?

Portugal's Algarve region, which forms a bulk of that country's tourist market, has witnessed what is yet to be seen, at least in scale, in other parts of the world: a raft of scams in the area of so-called "parallel accommodations" which are touted as an alternative to regular hotels.

The region's association known as AHETA recently put out a warning to the traveling public "want to stay-cate to be careful about booking into unlicensed rental properties – so-called ‘parallel accommodation’ – through the internet, which can sometimes turn out to be scams. The president of the assocation urged prospective vistors to "not let themselves be fooled by tempting offers often advertised via websites" and noted that "in recent years the number of fraudulent situations of deals done over the Internet regarding unlicensed holiday accommodation, which is neither legalised nor registered with local councils and many times doesn’t even exist, have soared" The AHETA went on to suggest a few simple preventive measures such checking with local townhalls to verify the authenticity of the renters.

The foregoing, as has been noted, is unfortunately not a problem peculiar to Portugal. The New York Times last year reported on a vacation rental scam in London. More recently, New York city too recently witnessed a similar scam when a tourist having prepaid for a "bed and breakfast" on Prince street arrived only to find that the address did not exist.

New York is one of a handful of cities that makes it illegal to rent rooms as alternatives to hotels with the city shutting down several illicit operations offering in the recent past some of whom were offering dorm rooms for a mere $25 or 3 bedrooms for $195. There are scores of other examples many of which go unreported. In the end more regulation or even enforcement may not solve the problem in a seemingly caveat emptor universe that still prevails on the internet. Travelers are best served by exercising caution. The old and trite adage that if it is too good to be true it is not true evidently holds.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.