South Africa Punts on Airbnb Regulation

Few days ago, I noted that hotels in South Africa are asking government to regulate Airbnb. They do think that allowing the hospitality platform to operate without regulations will eat into their business opportunities. The government has since responded. The summary is this – no one wants to annoy voters for the sake of big corporations, and everything in the amendment is “will” or “can” since it seems no practical methodology exists yet. Ban Airbnb in South Africa, illegal ones will emerge since people have tasted and liked it. Largely, there will be some cosmetic rule changes for tourism sector but those will not slow down Airbnb which operates are near-zero marginal cost!

Through this bill, ‘short-term home rentals’ will now be legislated under the Tourism Act in South Africa.

Under the amendments, the minister of tourism will have the power to specify certain ‘thresholds’ when it comes to Airbnb in South Africa.

These thresholds can include limits on the number of nights that a guest can stay or even how much income an Airbnb host earns.

According to the department, this would ensure that “everyone gets their fair share” and that both private users of Airbnb and hotel groups get to enjoy a shared economy.

The department also plans to give more oversight to local government when it comes to zoning and where an Airbnb may be located.

Airbnb responded thus: “We are having productive discussions with the government, based on our experience working with more than 500 governments around the world,…hosts to share their homes, follow the rules and pay their fair share of tax”. Yes, Airbnb hosts are not afraid of paying taxes – bring them on. Of course, with largely no overheads, hotels even on same tax rate, with Airbnb hosts, will continue to struggle as Airbnb hosts will enjoy better margins.

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