Following the pattern of events in the tech ecosystem, it is noticeable that whenever new establishment disrupt the norm, established old bees will begin to call for regulations. This trend has also found its way into the hospitality sector. The Federated Hospitality Association of South Africa (FEDHASA) and other small organizations are calling on the government to regulate Airbnb, an e-rental platform that lets people find accommodation in more than 191 countries across the globe.
Airbnb is a San Francisco based platform founded in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. It launched in South Africa in 2015 and ever since, has expanded across the country. Their company has changed the way people reserve accommodation through a seamless process. A new check-in tool automatically issues instructions to the user on the app and more than 40% of its listings are available via Instant Book, a tool for reservations. An Open Homes program launched in 2017 allows hosts to offer accommodation to refugees, displaced, and internally displaced people.
Back to the cries of FEDHASA, the Federated Hospitality Association are concerned that unregistered accommodation establishments listed on Airbnb are taking away potential customers from already established hotels. San Francisco for example, had regulated Airbnb since 2014 to protect affordable housing such as limiting the number of nights and banning of short-term rental of entire houses. The hospitality industry in South Africa is now calling on government to do likewise.
The Federated Hospitality Association of SA (Fedhasa) called for the government to crack down on Airbnb, and smaller organizations have echoed this call. A report from Nelson Mandela Bay Metro’s Economic Development, Tourism and Agriculture committee revealed that Airbnb earned more than R6 million last year December, which is almost a 65% increase. The formal accommodation industry registered an increase of 0.08%, equivalent to R5.7 million in December compared with December 2017.
“There is a massive problem, the playing field must be leveled and that is why we want Airbnb regulated,” said Sheena Wilmot, Chairperson of Port Elizabeth Metro Bed and Breakfast Association (PEMBBA).
The news also revealed that the tourism industry in South Africa is not happy because they are obliged to pay taxes while Airbnb, which is not regulated can afford to undercut prices.
“We are not opposed to Airbnb, in fact we support it. However, it is important that this type of business– like any other business in the city, is operated within a regulatory framework,” said Anele Qaba, Nelson Mandela Bay’s Metro Economic Development Executive.
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