[flak48]

Holidays homes exists because owners are speculating that tourists will pay a premium that compensates for the time that the rooms stay unoccupied and that overall it will be more profitable than renting it out for ‘100% occupancy’ to a local tenant at a lower daily rate (or equivalent monthly rent)

If a town gets popular among rich tourists and supply remains limited, the tourists will price out the locals (as is already apparent)

Zoning/limiting the number of airbnbs in proportion to the the total housing stock can be one solution to stop the tourist industry from gobbling everything else up (at the expense of the tourist economy)

Not an economist, but an extreme solution to achieve 100% efficiency, i.e occupancy would be for everyone (including locals) to become nomads and be willing to move homes everyday based on daily spot rates for housing and take up any unoccupied house that day based on what they can afford. (I.e a combined market where tourists and locals both live the hotel/Airbnb lifestyle). Sounds horrible though.

The apparent inefficiency (in terms of unnoccupied rooms/houses) IMO arises from the very real inconvenience and costs involved in moving houses too frequently. Contrast that with tourists who want to definitely want to stay in a city only for a few days. The two classes will always compete without intervention that favors one over the other - or tries to find some arbitrary balance