Short-term accommodation rentals in local communities: evidence from Messinia, Greece

Short-term rentals are important components that can profoundly transform the processes of generating tourist accommodation spaces, impacted by the rapid development of information and communication technologies; social media and digital brokerage platforms (Papais, 2023; Cors-Iglesias et al., 2020; Agapito et al., 2012). In countries like Greece, the number of short-term rentals especially in rural areas have created a new reality in the countryside in relation to the tourism product, as well as the characteristics and development of the areas in general. According to the institute of the Greek Tourism Confederation (INSETE) the growth and availability of short-term rentals have reached historic highs in recent months (Ikkos and Koutsos, 2025). These expansion rates signify that short-term rural rentals, respond to the need in Greece as well as other countries worldwide for cheaper, more rural-oriented and short stay demands, reaching in the last decades growth rates that exceed their urban counterparts (Mousavi et al., 2022; Baklien et al., 2016; Kastenholz et al., 2012; Winter et al., 2019; Bell et al., 2007; Weber, 2001).

From a formal and informal institutional point of view, short-term rentals can shape the economic, social and environmental domains of rural areas, while playing a pivotal role toward social behavior (North, 1990; Kaufmann et al., 2018). Therefore, the changes brought about by the advent of short-term accommodation rentals in rural areas are expected to impact the residents and their communities (Zaman et al., 2021). In light of the evidence that the purely farming rural communities of coastal areas or locations situated near traditional or ski resort settlements, have been shifting in recent decades toward “authentic” tourist attractions, raises questions about the fundamental changes in the characteristics and the development of these areas (Wu, 2018; Garrod et al., 2006; Napton et al., 1999; Cors-Iglesias et al., 2020; Boutsioukis et al., 2019; Robinson, 2002). Notably such a shift increases the economic and business opportunities of rural areas (Aziz et al., 2024), accounting for an average 5% of Greece’s GDP especially in mainland areas (Ikkos and Koutsos, 2025).

These developments can come with many advantages, but also a multitude of shortcomings particularly if there is no specific and well-designed institutional framework (Guttentag, 2019; Amaro et al., 2019), that can decisively influence and drive their development (Apostolopoulos et al., 2020; Vaillant and Lafuente, 2007; Hall and Jones, 1999), in a stable and more integrated manner (Yeasmin, 2023; Wang, 2020; Almeida, 2017). Research shows that only through an effective institutional framework can the negative impact on local communities from the spread of short-term rental accommodation be avoided; social inequalities, price and rent increases, as well as environmental burden phenomena be addressed (Caldicott et al., 2020; Nieuwland and Van Melik, 2020).

The saturation of more mature tourist destinations have created the need for expansion in less developed and remote areas in Greece, such as Messinia. The economic and labor market strengths of this area with small and family businesses generates a specific economic and social fabric that has been previously overlooked, despite its connectedness to an airport and major cities and the areas cultural and capital benefits (OECD, 2025). Hence, the study is aiming to examine the impact of short-term residential leases on particular rural landscapes, on the increase in land prices and on the extent of formation of a field of conflicts with land-use competitors in the countryside, by focusing on the rural area of the developing tourist destination “Messinia” in Greece. This study will attempt to expand our understanding of how formal and informal institutional elements may influence the development of short-term residential leases and in what ways these elements positively affect economic, social and environmental domains, while maintaining some stability and minimizing any local burdens, such as land prices increases and conflicts with land-use competitors.

The present research, to approach both the formal and informal institutional elements that influence the integration of short-term residential rentals in rural communities in a holistic way, was based on institutional theory. Institutional theory explains the relationship of a business action in relation to the institutional environment (Martinez and Dacin, 1999). According to North (1990), institutions are the framework of formal and informal rules. This framework creates stability in social behavior and includes, among others, laws, regulations, rules, cultural norms and professional standards (Scott, 2001). Institutional theory explains the pressures that business actions receive from the external environment to shape specific practices (Meyer and Rowan, 1977; Hirsch, 1975). According to DiMaggio and Powell (1983), the institutional environment shapes practices, actions and activities on the basis of isomorphic change processes that are coercive, imitative and normative. Coercive isomorphism is shaped through the exercise of political influences; mimetic isomorphism is shaped by standardized responses to uncertainty, and normative isomorphism is shaped by social influences. According to Deegan (2009), institutional theory can explain the reasons why business action seeks to balance sustainability and efficiency. In this light, the company must take into account the external environment and its institutional influences (Oliver, 1997). The operation of businesses within the formal and informal institutional framework shapes their strategy (Morgan, 2005; Williamson, 1994). Practically, this means different institutional frameworks shape different strategies and lead to different corporate governance practices (North, 1990).

Inquiries such as whether short-term rental businesses are embedded or not in local communities through formal and informal institutional influences are explored. Institutional theory can also facilitate the interpretation of the underlying determinants of long-term performance (North, 1990). The strategic choice of short-term rental businesses is shaped within and constrained by formal and informal institutional frameworks (Peng and Heath, 1996).

Today, in the rural areas under study, institutional frameworks are also shaped by tourism-related pressures. If the tourism product continues to grow, the pressure for changes will also increase. In these rural areas, income from short-term rental accommodations supplements agricultural income, which remains the primary source. However, the excessive growth of the tourism sector, among other impacts, may potentially reverse this relationship to the detriment of agricultural production.

Based on the connection between institutional theory and the sharing economy, the rental of assets – an economic model rooted in the sharing economy – raises innovative challenges and shapes new rules and values (North, 1990; Powell and DiMaggio, 2012). In recent years, research interest has been extensively focused on short-term residential rentals provided by individuals or businesses (Albuquerque et al., 2024; Balampanidis et al., 2021; DiNatale et al., 2018). This is in line with a surge of interest in the sharing economy, which has received significant attention from scholars, practitioners and policymakers (Gutiérrez et al., 2017). The notion of sharing economy overlaps with other concepts, such as collaborative consumption, access economy, platform economy and community-based economy (Belk, 2014) and brings opportunities for new businesses as well as for places and communities. Sharing economy in the context of short-term residential rentals is mainly enabled by online platforms such as Airbnb and Vrbo, on which the short-term accommodation rental system is based (Sainaghi, 2020; Farmaki et al., 2020; Sainaghi and Baggio, 2020). Sharing underutilized assets (such as property in this case) is seen as a prospect for increasing efficiency and even sustainability. Nevertheless, the relevant literature on shared economy is characterized by diversity, complexity and contradiction (Acquier et al., 2017)

The changes resulting from the shift of traditional settlements toward mixed-use activities, such as agriculture and tourism, through short-term accommodation rentals represent an institutional change that shapes its own dynamics (North, 1990). These changes lead to deinstitutionalization (Oliver, 1992) and shape the new identity of the regions. Concerning short-term rental leases in particular, on a broad level, their economic impact on the traditional tourism sector, local businesses and communities have been analyzed in several studies (Shokoohyar et al., 2020; Yeon et al., 2020; Guttentag, 2019; Martín‐Martín et al., 2019), revealing positive aspects and areas of concern. The literature also points out that short-term rentals may influence social relations and local cohesion, (Masoumi Dinan et al., 2025; Rembulan and Kusumowidagdo, 2022; Muschter et al., 2022; Balampanidis et al., 2021). They may also affect the local residents’ quality of life, and cultural identity (Theophilus and Ulrich-Schad, 2025; Fang et al., 2016), disrupting everyday lives and weakening established social relationships (Nieuwland and Van Melik, 2020; Gutiérrez et al., 2017). Moreover, increasing environmental concerns in regard to short-term rentals have also been explored (Caldicott et al, 2020; Contu et al, 2019; Midgett et al., 2018). There is an apprehension that such an activity contributes to higher resource consumption and waste generation (Barron et al., 2021). The few studies that examine short-term rental accommodation in rural regions indicate a positive impact on employment and economic growth (Albuquerque et al., 2024; Gerwe and Silva, 2020; Fang et al., 2016). By the same token, there are serious indications that short-term rental activity in rural areas may increase land prices and housing rental rates (Allam et al., 2026; Choi and Won, 2023; Sheppard and Udell, 2016). While there may be a positive effect contributing to real estate market growth, this can also disrupt farming and lead to displacement (Derdemezi et al., 2026; Muldoon et al., 2025; Furukawa and Onuki, 2022; Barron et al., 2021; Zou, 2020). In the same line, in rural and agricultural landscapes, the influx of tourists may have detrimental effects, both esthetically and in terms of productivity (Yeager et al., 2024). Drawing on such indications, Graham and Pritchard (2024) argue that policymakers need to ensure that the expansion of short-term rental accommodation is compatible with rural landscapes and does not disrupt agricultural production, instead such policy making should be based on evidence. However, there is only scant evidence of how short-term residential leases affect rural landscapes, land use, the commercialization of rural areas and agricultural production and diversification (Almeida-García et al., 2025; Graham and Pritchard, 2024). Moreover, as Torkington et al. (2025) point out, the impacts of short-term rental accommodation on the sustainability of undervalued rural areas have been little explored. Clearly, further research is needed to determine the extent to which rural communities can benefit from short-term rental accommodation and the adaptation required by the institutional, socio-economic and ecological resilience of the community (Yeager et al., 2024; Holladay and Powell, 2013).

There is also focus on spatial patterns, institutional arrangements and agricultural diversity. It concerns the interplay among institutions, space and diversity. Institutions determine behaviors and shape spatial patterns. The diversity of local institutions leads to heterogeneity. It is noteworthy that such research must recognize the heterogeneity that exists from region to region and be mindful of the different categories of countryside, which demonstrate significant differences (Hanafiah et al., 2024; Rembulan et al., 2020; Cors-Iglesias et al., 2020). For instance, there are coastal areas and some mountainous areas with high levels of tourism, inland rural areas where the supply of accommodation presents an average rate of growth and inland areas with a strong rural element. Taking into account spatial patterns of distribution and location in deepening understanding of the phenomenon requires research that uses the pertaining institutional framework as an analytical lens. The latter is a critical factor in conceptualizing the operation of short-term rentals in rural areas (Barrero-Rescalvo and Díaz-Parra, 2024; Chen et al., 2021), as institutional arrangements in the form of formal and informal institutions shape social behaviors, expectations (Zaman et al., 2021) and codes of conduct (North, 1990). The diversification of rural areas in Greece calls for more localized and targeted empirical research. In the case of the Peloponnese, a recent OECD report (2025) highlights that the prevalence of small and family-owned businesses, combined with strong cultural capital and international attractiveness, creates a distinctive environment for the development of short-term rentals, albeit one that requires specific institutional arrangements. More specifically, the region of Messinia has previously been identified as an area characterized by strong economic linkages among small and medium-sized enterprises that align well with the operation of short-term rentals, yet marked by weak social cohesion and limited specialization, thereby calling for tailored policy interventions (Drakakis et al., 2017).

Despite these distinctive structural features, such regions remain insufficiently examined in the relevant literature. Their combination of unique economic, social and environmental characteristics, alongside increasing short-term rental activity and relatively low levels of tourism maturation, underscores the need for a more nuanced understanding of the development trajectories and local impacts of short-term rentals in non-metropolitan areas of Greece.

Thus, this research aims to address the gap in knowledge we have about the development of short-term rental accommodation in rural areas by examining how institutional arrangements may shape the form and outcomes of short-term rental accommodation in them.

Messinia as regional unit is located in the southwestern part of the Peloponnese Region in Greece, and in total it occupies an area of 2,991 square kilometers and a population of 146,080 inhabitants and is a developing tourist destination (Hellenic Statistical Service, 2021). In recent years, large tourist units have been established in the area to meet the needs of the constantly growing tourism flows (Klada and Georgopoulos, 2024; Manola and Mouchimoglou, 2022; Timotheou, 2021; Drakakis et al., 2017). Despite the increase in tourism output in the period 2015–2020, Messinia recorded a decrease in Gross Domestic Product by 7%. This was in consistency with the per capita Gross Domestic Product which had also experienced a sharp 5% decrease (Hellenic Statistical Authority, 2023). Messinia operates an airport whose international arrivals are constantly increasing, thus, revealing the tourist potential of the region. In 2024, international arrivals increased by 13.6% compared to the previous year. More specifically, from 135,160 arrivals in 2023, they reached 153,607 in 2024, while in 2021 there were only 77,186 arrivals. In addition, domestic air arrivals had also increased from 12,521 in 2023–12,816 in 2024 (INSETE/INTELLIGENCE, 2024). Furthermore, the new road axis to Athens, which is the capital of Greece and the most populous urban center, reduced the distance to Messinia to approximately three hours and this provided a powerful momentum to the tourist destination of Messinia (Liargovas et al., 2019). Messinia area is characterized by natural and cultural heritage, with many beaches, important archaeological sites, museums, traditional settlements, famous castles, hiking trails, popular gastronomic cuisine, several hotels and short-term rental accommodation units (Anagnostopoulou et al., 2023; Malaperdas and Sarris, 2023; Gaitanakis, and Leivadi, 2020; Lee, 2001). Throughout the coastline of Messinia, visitors encounter sandy beaches, beautiful small coves and rocky coves that attract tourists from various parts of the world who come for summer holidays (Liargovas et al., 2019). In 2022, visitors to the archaeological sites of Messinia reached 209,425 and to its museums 23,896 visitors (INSETE, 2023).

Messinia is a place that, alongside its hotel units, has also developed short-term rental accommodation. In 2023, 5,363 short-term rental accommodation had been operating with a total of 9,743 rooms and 23,592 beds (INSETE, 2023). Most of these short-term rental accommodation are located in Kalamata, the capital of Messinia, and throughout the entire coastline of the countryside. It should be noted that in 2022, 626,510 foreigners and 521,939 Greeks stayed overnight in Messinia hotel accommodation, with an average length of stay of 5.2 nights for foreigners and 2.6 nights for Greeks (INSETE, 2023).

Empirically, a qualitative approach was applied to identify the opinions and perceptions (Creswell, 2014) of certain owners of premises offered for short-term rental accommodation as well as elected chairpersons of local councils lying in the same coastal areas. Notably, qualitative research adequately enhances the interpretation of social phenomena (Denzin and Lincoln, 2008). whilst is considered an appropriate research method in exploring entrepreneurship topics (Javadian et al., 2020). Qualitative research is effective in capturing and analyzing how individuals experience events (Willig, 2001). At the same time, qualitative research effectively addresses elements related to experiences, actions and social contexts (Fossey et al., 2002), and is used to understand the behaviors that are shaped by the interaction of individuals (Pathak et al., 2013). In this light, data collection occurred in person and by using phone calls, through semi-structured interviews. Semi-structured in-depth interviews effectively delve into social and personal issues to highlight and capture the experiences, opinions, perceptions and beliefs of research participants (DiCicco‐Bloom and Crabtree, 2006; Smith, 1995). This type of interview is frequently used in rural research (Paunović et al., 2024; Henderson et al., 2020; Farrell et al., 2010). The entire procedure of interviewing was performed during the period of November 2024–January 2025. For the formulation and phrasing of our questions we followed the design suggested by Robson (2024) and Mason (2010). Our questions focused on the themes of our research question. They were open-ended and flexible to enable the respondent to delve deeply. They were comprehensible and relevant to the experiences of the interviewees. They complied with the respective ethics. They did not directly or indirectly guide the participant to reply in a particular way. Our question framework was versatile in three ways: In terms of modifying the content according to the research participant, then toward the order wherein the questions were asked and lastly with regard to the addition or removal of questions. Furthermore, this study was conducted with methodological rigor to ensure trustworthiness and credibility. The data collected was rich and comprehensive, providing useful insight into the lived experiences of small-scale rental property owners and representatives of local government in Greece. In addition, ethical research practices were also upheld by securing the anonymity of participants (Apostolopoulos et al, 2021) while all participants provided their consent for the conduction of interviews. In this regard, the research team followed carefully concrete ethical principles relevant to protection of participant’s identities to ensure that they will not be recognized as they are all located in the same region and particularly in small communities (close to each other as well) (Orb et al, 2001). Finally, the interviewees were informed about the purpose and design of the research as well as the form of results’ publication (Qu and Dumay, 2011; Bulmer, 1982).

We chose “Messinia” as the location for our sample collection for three reasons. In recent years, it has transformed into a growing tourist destination, experiencing rapid tourism growth as a large number of residents have left the agricultural sector. Messinia combines coastal and inland rural areas with intense tourism development, particularly in its coastal zone. There is a marked increase in short-term rental accommodations in areas that, just a few years ago, were predominantly agricultural. These institutional adjustments observed in rural settlements – which involve sudden transitions – require examination to determine their impact on the agricultural sector and the factors shaping the new identity of these regions

The research team adopted a combination of convenience and purposive sampling to recruit relevant participants (Yin, 1994) which is very popular in qualitative studies (Apostolopoulos et al., 2025; Gregory and Austin, 2020). Particularly, the latter sampling strategy has the capacity to identify those persons who have deep knowledge toward the concrete subject thereby they could in-depth address potential issues and clarify the respective aspects (Patton, 2002) shedding light on the exploration of the formal and informal institutional elements that influence the integration of short-term residential tenancies in local rural communities. We have chosen convenience sampling for sample with regard to sample collection since according to Golzar et al. (2022) is suitable and effective in extracting data regarding people’s perceptions and attitudes toward the phenomenon. This capability facilitated us in detecting the views, experiences and perceptions of farmers who own short-term rental accommodation structures. Simultaneously, we have applied purposive sampling to recruit elected chairpersons of local councils respectively who represent the local populations. Table 1 summarizes the study sample. According to Patton (2002) the particular sampling technique is commonly employed in qualitative empirical researches concerning information-rich cases for in-depth investigation whilst it can be used through a small sample size. Moreover, adopting purposive sampling was useful as potential interviewees appeared to be key informants featuring the adequate knowledge to offer pertinent and insightful data (Popay et al., 1998). Based on the convenience sampling strategy, we selected cases wherein there was ease of access and individuals’ willingness to participate as interviewees (Patton, 2002). According to Stratton (2021), convenience sampling is appropriate for participants who are available close to a location. Participants in the study were notified of the aims and objectives of the study and provided the research team with a written consent. On top of that, we assured them that their anonymity would certainly be guaranteed.

In the sample we did not include entrepreneurs in the strict sense of the term but farmers who, in parallel with their crops, have proceeded to create short-term rental accommodation to increase their overall income. They are aware of whether the development of short-term rental accommodation has an impact on the rural landscape and agricultural production. We also recruited elected representatives of rural residents within our sample because they represent the local population and implement local policies.

The sample size was determined based on theoretical saturation (Saunders et al., 2018). After the 18th interview, it was observed that no new information was emerging. From that point on, the interviewees were repeating themselves without providing new data. The small number of respondents in qualitative research has also been confirmed by the studies of Guest et al. (2006), Mason (2010) and Bertaux (1981). In addition, according to the international literature on qualitative approaches, the sample size should be small so that each case has a distinct voice within the study and an in-depth analysis of each case can accurately be carried out (Smith et al, 2009; Robinson, 2014).

Saturation was achieved when the analysis revealed that no new themes or concepts were being identified from the data (Guest et al., 2006) whilst the sample size was such that it did not distort individual characteristics (Patton, 2002; Polit and Hungler, 1999). The sample size was ultimately evaluated adequate based on relevance and sufficiency principles (Moser and Korstjens, 2018). Figure 1 shows the map of Greece highlighting Peloponnisos region and specifically Messinia regional unit where the data collection were carried out, respectively.

Interviews lasted for 45 min on average and were audio-recorded then transcribed. The thematic analysis followed the steps suggested by Braun and Clarke (2006). Initially, familiarization with the research material was carried out through the search for meanings, themes and patterns that are relevant to the phenomenon under study. We proceeded to produce initial codes by identifying units of meaning that are connected to each other, organizing the data into groups that make sense according to our research question (Guest et al., 2011; Miles and Huberman, 1984). Following the coding completion, we proceeded to search for themes and subthemes (Terry et al., 2017; Langdridge and Hagger-Johnson, 2009) through the research material based on positions, assumptions and the broader research design. We proceeded to review the topics to identify topics that did not meet the criteria for inclusion. The thematic categories were examined based on internal homogeneity and external heterogeneity (Patton, 1990). After forming the data thematic map, we determined the content of each topic as well as the dimensions that each topic contains. By gathering all the processed topics that emerged from the research material, we proceeded to capture the findings.

The thematic map was created by organizing the data as outlined in Table 2 into three major categories, namely, Institutional Framework, Socio-Economic Impact and Environmental Footprint that are graphically presented in Figure 2. The Institutional Framework category encompasses both formal and informal institutional frameworks. The Socio-Economic category includes the economic impact, the purchase of agricultural land for the development of short-term accommodation units, local conflicts of interest and social and cultural dimensions. Finally, the Environmental Footprint category comprises resource management and impacts on the natural and agricultural landscape.

A hybrid analytic process was adopted in order for the research team to identify and code the collected qualitative data (Gittins et al., 2025). Specifically, for the needs of thematic analysis, both inductive and deductive reasoning were employed (Joffe and Yardley, 2004) since it is evident that constitutes an adequate method of analyzing qualitative data (Azungah, 2018). Initially, predefined subjects based on in-depth study of the existing literature were deductively highlighted through an open-ended interview topic guide and individual interviews examined followed by employing an inductive approach (Neeley and Dumas, 2016; Thomas, 2006). The latter practice provided the research team with the extraction of more relevant concepts by being attentive to emerging new notions (Clarke et al., 2015). Table 2 reflects the respective themes and sub-themes identified in this study. Transcribing the 20 interviews provided us with a rich data set of 182 pages, which were analyzed manually. The analytical process that led from the initial codes of the five thematic units to forming the sub-themes is presented in Table 2.

Table 3 provides a summary of how North’s (1990) framework aligns with the thematic areas and findings.

To avoid the risk of bias, reflexivity was maintained throughout all phases of the research to ensure that the knowledge embedded in institutional theory did not influence or predetermine the coding frameworks of our study. Furthermore, to ensure reliability among coders and inter-rater reliability, one member of our research team designed the coding guide and the other two participated in the data coding process. The agreement among all members of the research team reduced the possibility of bias and demonstrated that the codes were interpreted accurately.

On top of that, to ensure consistency between the coders and the review, we followed the procedure outlined below. Three members of the research team were involved in the validity check to ensure reliability between the coders and the control. One member of our research team designed the codebook and the other two were involved in the coding of the data. As a result, we have reduced the possibility of bias behalf the member of the research team who created the coding system (Krippendorff, 2004). The agreement among the members of our research team indicates that the codes are interpreted correctly by our members (Richards, 2020). According to Krippendorff (2004), at least three members should be actively involved in the validity check to avoid potential bias behalf the person who created the coding system. One person should design the codebook and at least two more people should be involved in the coding of data samples. Furthermore, according to Richards (2020), when there is agreement between the coders, this means that the code is interpreted reliably.

The findings on the integration of short-term rentals in local rural communities through both formal and informal institutional elements were structured on the basis of the following five thematic units. These are namely: economic impact, social and cultural impact, environmental impact and the impact of formal institutional elements and finally the impact of informal institutional elements. The quotes used in support of the claims made in each are representative of the views expressed by the participants and illustrative.

This thematic section examined issues such as the impact of short-term residential rentals on local development, employment, revenue streams that increase incomes and market strengthening. Issues related to the purchase, sale and rental prices of land and real estate within rural settlements, the effects on agricultural production as well as the creation or not of conflicts between neighbors with competing land uses were also examined.

The overall assessment of the participants in the survey is that short-term accommodation rentals contribute to the economic development of local rural communities through the increase in tourism product. Most interviewees (17 out of 20) support the notion that short-term rentals created economic development with a positive impact for all:

The research showed that the jobs created by short-term accommodation rentals themselves are limited, covering reception, security, cleaning and repair needs. However, they contribute indirectly to the development of jobs in a number of other businesses such as those related to catering, entertainment and food supply. Most (16) feel that the creation of such jobs contributes to the retention of the population in the countryside:

The research indicated that income from short-term rental accommodation in rural areas with a seasonal tourism product alone cannot cover the needs of the family and one cannot depend solely on such an income. However, it can significantly boost family income and is a good investment, which was expressed by all the participants:

All of the participants in the survey believe that visitors staying in short-term rental properties in small rural settlements, where no hotel units are available, create mobility in the local market. Also, they create income, local wealth and interest in investments. They transform the settlements from purely rural ones into tourist destinations:

Both the owners of short-term rental properties and the presidents of local rural communities believe that the increase in tourism in their area has added value to their agricultural plots, land and buildings and most consider this as a positive development. They are selling their land at satisfactory prices:

The participants in the survey believe that in small rural settlements there is very little demand for long-term rental housing. Therefore, the increase in rents is not as excessive as seen in urban centers. However, the phenomenon of increasing rents is real and most mention that the increased demand in the market is responsible for such a change. In addition, the participants in the survey claim that in their settlement when tourist traffic increases, rental prices also increase, especially in agricultural plots located near the settlement:

Moreover, it is evident that most of the participants believe the transformation of a rural area into a tourist destination has an impact on agricultural production. Initially, the income from the tourist product functions as a complement to the agricultural income, but as the tourist product increases, many residents give importance to tourism, reducing their activity in the agricultural sector:

The research showed that the coexistence of agricultural holdings and agricultural processing enterprises with tourist service facilities is a difficult balance in rural areas. In most settlements in the Greek countryside, spatial planning that delimits land use to avoid competitive conflicts is absent:

This thematic section examined issues such as the impact of short-term residential rentals on social cohesion, the quality of life of residents and the cultural identity of the community.

The research showed that the increase in tourism, even in small rural communities, affects social cohesion by changing local societies and creating long-term changes in local habits. However, the majority of the participants in the research showed that they were not afraid of these changes and found them positive, especially when the tourist entrepreneurships are open toward the local community. Only a couple raised their concerns about the feelings of social cohesion expressed by the local people that feel alienated:

The opinions of the participants in the survey are divided on the issue of the impact on the quality of life of residents. The owners of short-term rental housing claim that the quality of life of residents is not negatively changed by short-term rental housing. The presidents of rural communities believe that in many cases the sense of traditional community is lost and elements that support the quality of life of residents are weakened:

The majority of survey participants believe that short-term rental housing in rural communities does not create a negative impact on their cultural identity, but creates opportunities for promoting their cultural heritage outside the community. However, few (3/20) expressed opposing views and raised concerns about changes in the long-term:

This thematic section examined issues such as the impact of short-term accommodation rentals on resource consumption, the increase in waste, the impact on the natural landscape and environmental sustainability.

The research showed that short-term accommodation rentals that attract visitors to rural settlements increase the consumption of resources, such as water and energy, and there is an increase in waste and noise production. These changes have not been adequately met by the local infrastructures concerning water supply, waste management, cleaning services, as well as traffic network. However, many settlements make an effort to become self-sustained and this creates positive developments, but more planning and infrastructures are eminent to meet the ever-growing needs:

Most of the participants in the survey, especially the short-term rental owners, believe that there is no significant and negative impact on the natural landscape in small rural settlements, due to visitors using short-term accommodation rentals and the small number of them that does not create environmental problems. Few local elected chairpersons, though disagreed and raised their fears that increased tourist activity poses a biodiversity and natural landscape burden due to intensive reconstruction and increased waste production:

The research showed that in the settlements of the Greek countryside in which tourism is developing, no measures have been taken for sustainability due to the increase in visitors. Most participants believed that the tourist development has not reached the size for such measurements to become essential. Very few initiatives are in an infancy stage, but the need for future planning was raised:

This thematic section examined issues such as the legal, regulatory and normative framework governing short-term rentals as well as the balancing of owners’ rights. The framework for the protection of local communities and the framework for the purchase of agricultural plots, plots and buildings in rural settlements were also examined.

The survey participants, both short-term rental owners and local elected chairpersons, believe that the legal, regulatory and normative framework governing short-term rentals of rural accommodation is complex and unfair to the development of rural tourism. It does not take into account the specificities of the countryside, operates horizontally, imposes high taxes and leaves little room for intervention by the community itself. There is a sense that the government frameworks mainly concentrate on tax evasion and little is done on urban building planning, although the existing regulatory framework secures safety and hygiene of the short-term housing:

The survey participants believe that the legal framework should be made simpler, friendlier and fairer for short-term rentals of accommodation in the countryside. It should be fiscally fair and create a favorable environment for investments in tourist accommodation and take into account the specificities of small rural settlements. Also few mentioned that monitoring must be employed to ensure rule compliance by all owners and measure the impact in the local area. Whereas as far as differences between the official urban and rural frameworks, some believe that the framework is the same and others believe there are differences that do not meet the appropriate needs of the areas of interest, where islands and small village rural areas are treated similarly but they are significantly different:

The presidents of the local communities who participated in the survey believe that the institutional framework should balance the rights of owners, tenants and residents. They believe that this is a balance that short-term rental owners in particular must pay attention to have good relations with residents. If this balance is disturbed, then there is an overall problem for the community. However, the owners also agree with the presidents’ opinion, pointing out that the institutional framework in this area has several gaps that in practice are exposed and therefore requires reform:

The participants in the survey believe that the institutional framework has difficulty protecting the local community from arbitrariness in the use of land and real estate within the settlement. The absence of spatial planning and the non-completion of the land registry leave room for the development of arbitrariness and in many cases conflict of interest:

This thematic section examined issues such as the emotional attachment to investments in the place of residence, local habits and local traditions.

The participants in the survey believe that in order for someone to stay and be active in their village, they must be emotionally bound by their love for the place they were born and raised in. If this feeling is absent, then life becomes difficult in rural settlements. Although, a number of short-term rental owners (3) believe that the motive is financial investment and then emotional and also few local chairpersons think that it is a combination of economic and emotional motivation:

The research showed that visitors who come and stay in rural settlements leave their own imprint. The increase in population and the different lifestyle of visitors leave their impact over time on the local society. However, visitors are more integrated into local habits and to a lesser extent the local population changes its habits. Some though believe (6) that the small numbers of tourist cannot change local habits, whereas others (4) see changes and the development of practices that may not impact tradition, but do incorporate some novelties:

The research showed that visitors to rural settlements like local traditions. They are connected to the settlements and to local traditions. They like local traditional events and many participate in them. These traditions is believed that are not changed and on the contrary most participants believed that they are enhanced. Only two elected local chairpersons expressed that some traditions are changed to meet tourists’ needs and become more profitable:

The research indicates that short-term rental accommodation contributes to the economic development of rural communities and creates a small number of jobs. However, they indirectly create jobs in a number of other related businesses in the rural area, which contributes to the retention of the population in the countryside. They create additional income for rural families as well as mobility in the local market. At the same time, they transform settlements from purely rural ones into tourist destinations. This provides added value to the plots of land, houses, and buildings of rural communities. Sales and rentals take place at better prices, a fact that rural residents consider as positive development. However, the transformation of a rural area into a tourist destination has an impact on agricultural production since in many cases residents give importance to tourism, reducing their activity in the agricultural sector. The research has also highlighted the problems created in rural communities due to the lack of spatial planning that delimits land use to avoid competitive conflicts.

Past research findings have reflected on the contribution of short-term residential rentals to the economic development of rural communities (Agapito et al., 2012; Roberts and Hall, 2001). Relevant research has also identified that accommodation infrastructure brings neglected rural areas to the center of tourist interest, therefore, leading to the creation of further development (Sanagustin Fons et al., 2011; Roberts and Hall, 2001). In addition, they create jobs, increase family income and most importantly, enable rural communities to connect with the global public (Boutsioukis et al., 2019; Ladegaard, 2018), as well as revitalizing both the market and the local economy (Huebscher et al., 2020). The study of international relevant literature clearly shows that the increase in short-term residential rentals creates an upward escalation in the prices of land, plots and buildings as well as in rental values (Choi and Won, 2023; Garcia-López et al., 2020; Sheppard and Udell, 2016). The impacts of short-term residential rentals on local communities and in particular on housing, rents and the real estate market (Furukawa and Onuki, 2022; Barron et al., 2021; Zou, 2020) in this research is reflected as a positive element for rural areas that have previously experienced continuous degradation. This element contrasts with the finding of the research of Graham and Pritchard (2024) which supports that there are difficulties in the objectives of protecting agriculture with the escalation of the price of agricultural plots encouraging farmers to abandon agricultural production. The impact of the conversion of settlements from purely agricultural to tourist destinations has also been reflected in other research (Wu, 2018; Garrod et al., 2006; Napton et al., 1999). Finally, the lack of spatial planning creates problems for the smooth development of the countryside, which is reason why policies are needed to ensure that the expansion of short-term residential rentals is compatible with rural landscapes, and consequently, does not hinder agricultural production (Graham and Pritchard, 2024; Pritchard et al., 2024; Garcia-Ayllon, 2018).

Therefore, it is evident from this study that short-term rentals not only contribute to rural tourism, but are also a viable solution for areas with the particular characteristics of Messinia, demonstrating their multifaceted role as hybrid economic structures that can be intergraded in the local lifestyle. According to rural economy theory and development, short-term rentals can function as supplementary income strategies that can in a way reorientate traditional agricultural activities, without replacing them entirely.

The research showed that although residents of short-term rentals in rural settlements leave their own mark of influence on communities, the impact on social cohesion is small. However, this does not in any case exclude the possibility of this impact to experience growth in the long term. The impact of the tourism product on the quality of life of rural residents is divided between owners of short-term rental properties and community presidents. Further research is required to capture the views of rural residents who do not engage in short-term rental accommodation. However, this study showed that the tourism product in rural communities does not create particular problems in their cultural identity due to the small number of seasonal visitors. Juxtaposing these findings with the international literature on short-term rentals in rural areas, we did not identify any corresponding findings for the countryside. The existing findings generally refer to the impact of short-term rental accommodation without specifying what this might do to the countryside (Müller et al., 2021). These findings are in the opposite direction in terms of the intensity of the phenomenon indicated by the findings of the present study. Based on these findings, short-term residential rentals affect social cohesion, quality of life and cultural identity (Fang et al., 2016). Furthermore, they change the character of areas, disrupt the daily lives of citizens and weaken social ties (Nieuwland and Van Melik, 2020; Wachsmuth and Weisler, 2018; Gutiérrez et al., 2017).

A comparison of the findings reported by short-term rental property owners and local council chairpersons reveals that, on most points, they are aligned. However, both parties believe that the existing challenges arise from the inadequate institutional framework. The latter causes weaknesses in the field of implementation and, in many cases, leads to conflicts of interest, as it does not adequately balance the rights of owners, tenants and residents. Where their views differ is on the impact that short-term rentals have on the community as a whole. Unlike accommodation owners, local council chairpersons argue that, in many cases, the factors that support and enhance residents’ quality of life are being undermined and the sense of traditional community is eroding. A significant aspect is the fact they approve of the conversion of the community to a tourist destination aimed at boosting residents’ income without expressing concerns over the decline of agricultural production.

As far as social sustainability theory is concerned the small impact of short-term rentals tourism and their duality on local heritage strengthening further highlights the dynamic non-linear nature of guest-local residents relationship and its dependence on future planning.

The research supports the claim that short-term rental residents increase the consumption of resources and waste. However, infrastructure in rural communities often lacks the capacity and services to effectively respond to growing needs. The research also showed that rural communities’ lack of sustainability plans. The impact on the natural landscape is limited since the visitors are not that many to create environmental problems. However, the research of Yeager et al. (2024) revealed that increased tourist presence in agricultural landscapes can lead toward adverse aesthetic and productive impacts on the landscape. This is consistent with the research of Graham and Pritchard (2024) which highlighted the necessity of having sustainability plans to remain compatible with tourist expansion in rural landscapes and to maintain agricultural production. As mentioned, an important element of the present research is that the increase in short-term accommodation rentals requires greater consumption of resources such as water, and therefore, increased waste (Barron et al., 2021). However, these increases are not accompanied in many rural communities by corresponding upgrades to infrastructure and cleaning services.

The current study though underlined that although short-term rentals increase the environmental pressure of negative externalities, it also holds the catalytic potential for adaptive sustainability practices in rural tourism.

The research has also revealed that the legal, regulatory and normative framework governing short-term accommodation rentals in the countryside is complex and misguided for the development of tourism in the countryside. It does not take into account the specificities of rural settlements since it considers that all short-term accommodation rentals in the country’s territory have the same characteristics and the same performance. There is no decentralization since it does not leave room for intervention by organized local communities in short-term accommodation rentals. It presents difficulties with protecting the local community from arbitrariness in land use and the use of real estate. Spatial planning is absent and the cadaster has not been completed, which creates conflicts of interest. The research has also identified that the current institutional framework governing short-term accommodation rentals needs to be reformed to be simplified, friendlier and fairer. At the same time it should be conducive to establishing a favorable environment for investment in tourist accommodation. Importantly, it should take into account the specificities of small rural settlements and balance the rights of owners, tenants and residents.

Considering the relevant literature, the institutional framework constitutes a decisive factor for the smooth and uninterrupted operation of short-term accommodation rentals in rural settlements, since social behaviors are adjusted based on it (Zaman et al., 2021). Institutions are the ones that determine the codes of conduct (North, 1990) and business environment is under pressure to act on specific behavioral practices (Meyer and Rowan, 1977; Hirsch, 1975). However, the international literature presents a lack of studies in examining in detail the legal, regulatory and normative frameworks that govern short-term residential rentals and their effects (Chen et al., 2021). Ineffective institutions and deficient planning frameworks are unable to manage new challenges, resulting in confusion and contradictions (Graham and Pritchard, 2024). The management of agricultural plots and buildings in the countryside requires an effective institutional framework which will contribute toward eliminating conflicts and disputes amongst stakeholders (Lisec et al., 2013). The presence of spatial planning and complete cadaster strengthen the institutional framework, and make it transparent to stakeholders (Rokos et al., 2024).

The current findings though demonstrated the misalignment between rural area specificities and existing regulatory frameworks used in more mature and urban areas, supporting the need for developing more context-sensitive regulatory mechanisms.

Moreover, the research captured the emotional attachment of the residents of rural settlements to the place where they were born and raised. This emotional attachment constitutes a vital element of investing power and resources for these areas. At the same time, visitors who come and stay in rural settlements allegedly leave their own imprint that has a long-term impact on the local society. However, visitors tend to experience local habits, which is part of the attraction of such destinations, without causing changes in habits of the local population to any significant extent. The research highlighted that visitors to rural settlements favor local traditions and often participate in local traditional events. Hence, tourism entrepreneurship even in the form of short-term rentals apart from the financial incentives is also highly driven by emotional and cultural motivation in search for a more holistic and full resident experience and survival.

Based on relevant literature, informal institutions such as emotional attachment, habits, traditions, moral values and beliefs shape rules of behavior (Kaufmann et al., 2018) and in this way influence the attitude and behavior of social actors (Zaman et al., 2021). In the case of short-term rental accommodation in the countryside, there are corresponding findings in the international literature showing that the emotional attachment to the land and buildings inherited from their ancestors in countries such as Greece is strong (Makris and Apostolopoulos, 2021; Koutsou et al., 2011; Goussios and Duquenne, 2003). On this point, research shows that cultural heritage and cultural identity are driving forces of attraction for tourists seeking cultural travel experiences (Zhang et al., 2020; Chen and Lu, 2011; Agrusa et al., 2010). Moreover, tourism businesses are the ones that promote the identity of the place, traditions, customs and events to attract tourists (Dredge and Jenkins, 2003). Finally and crucially, as relevant research shows, in cases where both formal and informal institutions are ineffective, a new regulatory framework is required to ensure the rights of owners of short-term rental accommodation, the rights of visitors and the rights of residents on the basis of pursuing sustainable development (Barron et al., 2021; Lee, 2016). Table 4 illustrates the connection between the research questions, the findings and the institutional interpretation.”

The empirical findings of the study extend institutional theory to the rural environment based on the dimensions of institutional logic, formal versus informal institutional correspondence and through the institutional roles that exhibited divergence. The shift in institutional logic is evidenced by the fact that short-term accommodation rentals do not have a purely economic dimension but contribute to a shift in employment from agricultural production to tourism and commercial activities. In this light, land and property values are redefined, and at the same time, agricultural production declines. The mismatch between formal and informal institutions is demonstrated by the failure of formal institutions, since the state does not take into account the specificities of rural areas and the relevant regulatory framework is complex and unfair. However, informal institutions stemming from the family and local traditions function in such a way as to facilitate the smooth integration of visitors into the local community. The divergence in institutional roles is reflected in the differentiation between community leaders and landowners regarding the impact on residents’ quality of life. The novelty of this research highlights this conflict of institutional roles. On the one hand, community leaders, who are responsible for social cohesion and the enforcement of operating rules, view residents’ quality of life through a protective lens. Conversely, accommodation owners view quality of life through the lens of empowerment.

The findings of the current research provide a significant contribution to the existing institutional theory. This takes place on the basis of the decoupling between the government policies and the practical implementation of such policies by the institutions within the emerging concept of sustainable rural development. The policies implemented by the under-examination institutions both legitimize and modernize the framework of short-term rental accommodation, but prove ineffective within the context of practical implementation. Therefore, according to Meyer and Rowan (1977), this the institutional decoupling. In practice, this means that the Greek state is fully aligned with the current regulations and directives of the European Union in relation to its overall provided tourism product. In several occasions, these policies carry a rather symbolic than a substantive application to short-term rental of rural accommodation. Importantly, the current regulatory framework has been found to be applied horizontally to both the urban areas and the countryside. This occurs by not taking into consideration the peculiarities of the Greek countryside (R2). While the regulations require spatial planning, the Greek countryside lacks a strong spatial planning framework and the cadaster is yet to be completed (R 20). In other words, a decoupling of the formal rules from the scope of application has been observed. While at both national and European levels priority is placed in favor of the countryside’s sustainable development, in the scope of application, local communities lack a realistic sustainability plan nor have they developed sustainability initiatives in the effective and efficient management of their natural resources (R2, R14). Based on the existing institutional theory, this occurs when there is institutional complexity which can create additional problems that require structured confrontation (Pache and Santos, 2010). Furthermore, in the case of short-term rentals of accommodation in the Greek countryside, a number of elements have been found, including, coercive pressures behalf the EU, regulatory pressures from the tourism industry, political pressures to support the primary sector and at the same time scarce resources that create constraints to the sustainable development. Based on these elements, the Greek state, while unable to satisfy the conflicting demands arising from all stakeholders involved, is currently forced to proceed with the decoupling. On the one hand, this shapes the institutional framework and on the other, it informally allows for its loose application. This research significantly contributes to the identification of the paths of decoupling by identifying the multi-level decoupling in the case of short-term accommodation rentals in the Greek countryside. As a result, this research has identified three paths. The first refers to the path leading from the national level to the local level where the presidents of the communities declare limited interventions of the local community in the governance of short-term accommodation rentals (R 2). The second path refers to the policy sectors where tourism policies are not adequately connected with the current rural policies, hence, resulting in the creation of a conflict of interest (R 20). Finally, the third path refers to the individual level at which two elements have been identified. On the one hand there is a commitment to the rural identity but on the other hand, at practical level it shifts to the tourism product. Simultaneously, this research redefines three institutional gaps institutional retreat, institutional delay and institutional inconsistency (Khanna and Palepu, 2010).

Tourist destinations transform rural communities from purely agricultural ones into burgeoning tourist areas. The residents of these communities develop short-term rental accommodation to meet the needs of tourists and in this way supplement their family income. However, this development of short-term rentals must operate in a way that balances the interests of owners, tenants and residents. It must not have a negative impact on agricultural production, the environment and social cohesion. It must not lead to the depreciation of the agricultural profession and the abandonment of crops.

The results of the research point out that basic elements of the aforementioned may be missing in the existing institutional framework for short-term rental accommodation in the Greek countryside. Therefore, this makes it ineffective, often operating at the expense of agricultural production, the natural landscape and local residents. This ineffective institutional framework in combination with the deficient planning frameworks create confusion, contradictions, conflicts of interest and disputes. Substantial reforms of the existing institutional framework are required. Such reforms should take into account spatial planning and cadastral mapping. The institutional framework should be simple, fair, effective and at the same time support and promote the identity of the place, traditions, customs and events to expand the tourism product. This expansion of the tourism product in rural communities should be accompanied by an upgrade of infrastructure and services so as not to create environmental issues and other negative externalities. Importantly, it must avert the cessation of agricultural economic activity through incentives and support sustainable development. In doing so, it must take into account the characteristics and specificities of rural settlements and give a role to local communities themselves.

This study theoretically enhances the understanding of rural short-term rentals and the theories concerning rural tourism sustainability through economic diversification and social and environmental dynamics. It most importantly though adds to the international literature on the institutional framework on which short-term residential rentals in rural settlements should be based and highlights their need for adaptability. The findings of this research are useful for those who implement policies for tourism and short-term residential rentals in rural communities. They are also useful for rural residents who want to create short-term rental accommodation units.

Based on the institutional friction highlighted by the present study, we propose two interventions on the part of the State. The first concerns the decentralization of state regulations. The second refers to the creation of a framework of measures that will take into account the specific facets of rural areas and the seasonality of the tourism product.

The present research was limited to examining a particular rural area of Greece, hence findings highlight the specificities of Messinia and might not be applicable to other areas. Future studies comparing different rural areas in Greece could elucidate the generalizability or restriction of the current findings. In accordance, the study focused on the impact of both formal and informal institutional elements on short-term accommodation rentals in the countryside, emphasizing on rural landscapes, increasing land prices and the formation, or not, of a field of conflicts with land use competitors. Therefore, future research could expand on the impact of short-term rentals to other elements of the countryside providing a more holistic overview.

Furthermore, due to the design on examining the impact of short-term rentals on agricultural production, environmental footprint and social cohesion, as well as clarifying whether engaging in such entrepreneurships leads to the devaluation of the agricultural profession and the abandonment of crops, the sample was limited. In particular, we chose to address the owners of the accommodation who are also involved in the agricultural sector and are aware of the interaction of short-term accommodation rentals with agricultural production, as well as the presidents of local communities who are elected representatives of local populations, and therefore, express these populations. Hence, future research could involve other short-term rental owners as well as general public residents for a more diversified point of view that could capture the needs and worries of all of the residents in those areas. In the same stance, future research could also address the interaction of other actors, directly or indirectly, involved in short-term residential rentals, such as tourists, cultural institutions, civil society and individual members of local communities. It could also involve other institutional elements that shape and influence short-term residential rentals, and draw on the perspectives of participating and nonparticipating local residents. Accounting for and collecting more opposing views characterized by both positive and negative sentiments on short-term rentals, could reveal more in-depth insights that can shape the future of rural tourism and short-term rentals in more areas.

Although methodologically, qualitative research was chosen, future research could follow a more quantitative or mixed approach so that the findings can be further validated and approached more holistically.