Airbnb crackdown in South Africa

A new whitepaper from the Department of Tourism threatens the additional income small-time Airbnb hosts make from renting out rooms or garden cottages.

The department first revealed its intention to regulate Airbnb and other home-sharing apps in April 2019 through the Tourism Amendment Bill.

The bill aims to give the tourism minister the power to specify certain “thresholds” for Airbnbs in South Africa, including limits on the number of nights a customer can book.

The department has argued that platforms like Airbnb could lead to a surplus of unregistered properties on the accommodation market, resulting in the value of formal operators’ properties declining.

Traditional accommodation providers like guest houses and hotels have a higher operating cost than informal operators — mainly thanks to the various taxes, levies, insurance and other government requirements they must comply with.

However, their issue is generally not with small-scale players like a homeowner renting out a garden cottage on Airbnb. It’s with those operators claiming to be private homeowners offering rooms for rent that are actually small-to-medium-sized guesthouses.

Airbnb slammed the whitepaper’s proposals in a letter to its South African hosts that Sunday newspaper Rapport obtained.

The company has taken issue with thresholds for the number of nights a property may be rented and a registration system that will require inspection of properties before they can be loaded onto the platform.

Airbnb Middle East and Africa regional lead Velma Corcoran said that although the platform supported regulations to tackle problematic operators, it could not do so at the cost of the tourism industry.

Corcoran maintains that someone who rents out a single room for a small additional income should not be treated the same as an operator who buys multiple properties and rents them out at scale.

Velma Corcoran, Airbnb Middle East and Africa regional lead

Cities worldwide have implemented strict regulations on the number of properties an informal operator is permitted to host and how many days a property may be rented.

For example, in New York in the US, the number of Airbnb properties shrunk from 22,000 to 3,000 after the city implemented strict renting rules.

However, that resulted in a “black market” surfacing on Facebook and other platforms that don’t provide the types of protections available to hosts and users of Airbnb.

The Tourism Amendment Bill comes after an outcry from the hotel industry that Airbnb essentially allowed people to operate unlawful accommodation businesses.

Airbnb hosts don’t require licences or pay the various taxes and tourism levies applicable to hospitality businesses.

Michele de Souza, chair of the Pietermaritzburg Bed & Breakfast Network and a hospitality industry veteran, previously told MyBroadband that bed-and-breakfast type accommodations like guest houses must comply with a huge number of regulations.

De Sozua argued that the bare minimum laws Airbnbs should comply with are:

  • Obtaining permission to operate or get a business licence from the municipality. The property must then be checked by town planning, health, and fire departments to ensure there is no danger to guests.
  • Short-term home rentals must get hospitality insurance with a minimum of R30 million public liability.
  • Membership of a local tourism authority and registration with South African Tourism should be compulsory.
  • Airbnbs that offer breakfast or other meals must get a food preparation certificate and/or a business licence to prepare perishable foods — health and safety checks on kitchens must be conducted.
  • Domestic workers must be paid according to the hospitality sectoral determination. The minimum wage for this sector is higher than domestic workers.

In addition to complying with the regulations above, De Souza said short-term home rentals should be classified as a business.

That would subject them to the same rates and taxes as a business, business rates on services like phone lines, DStv, and fibre, and having SABC licences for each TV on the premises.

She has also called for Airbnb to account to the government on several fronts — including paying 15% VAT or a 15% Tourism Levy for every booking made on its portal, and not being allowed to use the term “breakfast” in their names if they don’t offer breakfast.

South Africans hungry for additional income

Airbnb recently surveyed 1,800 South African hosts and guests about user trends.

50% of the respondents said the rising cost of living was becoming unaffordable, while a third said they needed additional income.

It found that hosts typically collected about R26,000 per year in additional income.

In addition to providing its hosts with additional means to earn a living, Airbnb properties tend to be substantially more affordable than formal accommodation.

That makes it possible for people to book holiday or business accommodation who would not be able to afford to stay in a hotel, B&B, resort, or guest house at a popular holiday destination.

The lower costs also allow travellers to extend their stays beyond what they would have done with more expensive formal accommodation, meaning they can spend more money on products or services at other businesses.


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Airbnb crackdown in South Africa