News: South Africa regulates Airbnb

The Story

Airbnb faces tightening regulations all over the world, and South Africa is the latest country to pass a law to oversee the platform’s activities. The country recently published a Tourism Amendment Bill that will allow its tourism ministry to enforce thresholds, such as limits on the number of nights guests can stay and how much Airbnb hosts can earn from the platform. The new regulation will also determine which zones Airbnb hosts are allowed to operate in.

Cape Town Airbnb. Source: Sharp Magazine

Industry Take

Industry agencies and associations, such as the Federated Hospitality Association of South Africa (Fedhasa), South Africa Tourism, and the Tourism Business Council of South Africa (TBCSA) have longed lobbied government authorities to pass regulation that will level the playing field for all hospitality providers. The TBCSA has affirmed that Airbnb threatens the profitability of hotels, which could lead to job losses. Smaller hospitality providers, such as bed and breakfast operator associations, have also joined in the call for laws to tighten regulations on the problem, as they have seen slower growth, while Airbnb continues to record exponential growth. A particular charge from a bed and breakfast association is that Airbnb is taking away business from established bed and breakfasts and hotels.

Airbnb has said that it supports clear and progressive rules that support the sustainable growth of home sharing. The tech startup, whose most recent internal valuation was at $38 billion, is actively engaged in discussions with governments all over the world and seeks to ensure that Airbnb hosts follow the rules and pay their fair share of taxes.

LC Take

The traditional travel and tourism sector is a powerful engine for economic growth. According to the World Travel & Tourism Council, the sector accounted for 10.4% of global GDP and supported over 300 million jobs in 2017. Concerns about any threats to jobs are valid.

However, Airbnb has also emerged as a great channel for families and individuals to open up their homes, exchange social and cultural norms, and most crucially earn money. South Africa dominates active listings in Africa and has earned South Africans over $600 million since the platform was founded in 2008. Regulation might be necessary to ensure safety and security for all parties impacted and also ensure that government can collect fair taxes, but strict regulation that does not account for the uniqueness of a digital home-sharing platform will harm more than it helps.

Sources: Independent Online and MyBroadband

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