Real Estate Investor Magazine South Africa September/ October 2019 | Page 45

AIRBNB
PROPOSE TOURISM BILL AMENDMENTS
Earlier this year, the Department of Tourism proposed
an amended bill which would regulate the use and
implementation of Airbnb services in South Africa. In an official
statement, the Department of Tourism explained the aims of
the amendment. “The Tourism Amended Bill aims, amongst
other things, to address the regulatory vacuum on short-term
rentals by defining short term home rentals as “the renting or
leasing on a temporary basis for reward, of a dwelling or part,
therefore, to a visitor”. This includes enabling the Minister of
Tourism to determine thresholds regarding short-term home
rentals. In this regard, the Minister could possibly stipulate the
amount of nights guests are able to stay at the property along
with the earning bracket for the homeowners.
The Tourism Amendment Bill was published on 15 April
2019 for stakeholders to generate a comment on the proposal.
Due to pressure from the South African hospitality industry,
the Department of Tourism has taken into consideration
the implications of Airbnb services on other local hospitality
offerings. The increased use of Airbnb services currently
threatens the profit of other hospitality services, with many in
the industry fearing a major job loss in the sector. According
to reports, SA Tourism, The Tourism Business Council of South
Africa (TBCSA) and the Federated Hospitality Association of
South Africa (Fedhasa) have been urging the Department of
Tourism to regulate the online service, Airbnb.
Implications for investors
The proposed amended bill could impact investors who own
properties and are utilising them for the sole purpose of
Airbnb services. Currently, Airbnb only takes a 3% commission
for each booking from the host and an estimated 6-12%
from guests who utilise the hosts’ accommodation services.
This minimal cost of part of the host has made utilising or
purchasing property for the sole use of Airbnb services an
appealing concept. As a lucrative industry, Airbnb has tapped
into an affordable form of accommodation which allows
those who own property to make a steady profit. According
to a recent survey released by Airbnb, the service has injected
an estimated R10-billion into South Africa during 2018,
showcasing the benefits of the service to the overall economic
health of the country.
The proposed amendments may change the profit outcome
and overall regulate the service and ‘hosts’ or property owners.
Investors are advised to keep an ear to the ground for the
overall outcome of the proposed Tourism Amendment bill.
In closing, the real estate sector in South Africa has taken a
downturn with the evidence in the market, as properties which
have been for sale drop their prices even further. Cape Town’s
Atlantic Seaboard and opulent Constantia area’s mansion
prices have taken a fall, with some dropping from R67-million
to a reported R58-million.
Under this proposed bill, the department indicates that
short-term rentals will be fall under the regulations of the
Tourism Act. Although our local economy stands at a precarious point
with the uncertainty of where it may go, international investors
are still pouring in the county.
As an online platform, Airbnb has grown rapidly in terms
of users since established. Allowing travellers to book more
affordable accommodation whereby they are able to access
a more ‘at home’ environment while travelling overseas. Many
locals have turned to renting out their properties, either
apartments or houses for the use of Airbnb, as it brings in a
lucrative monthly stipend. It may seem all downhill from here but the regulations that
have been proposed and possible changes can potentially
provide an upside to not only existing investors but those
looking to invest and increase their wealth portfolio. As an
investor, it’s not only important to keep abreast of financial
news but also the implications of changes in multiple
industries’ and its impact on the property sector.
SOURCE Real Estate Investor
SA Real Estate Investor Magazine SEPTEMBER/OCTOBER 2019
43