Picture: FLICKR
Picture: FLICKR

The government is under growing pressure to abandon proposed new regulations for short-term home rentals, including those on popular online platforms such as Airbnb.

Opponents of the controversial Tourism Amendment Bill argue that it will hurt the tourism industry, one of the few sectors identified as having the potential to pull SA out of the economic malaise it is in.

SA has the largest travel and tourism sector in Africa, contributing about R426bn to the local economy in 2018, according to research by the World Travel and Tourism Council. The sector is responsible for 1.5-million jobs, or 9.2% of total employment in SA.

Just as ride-sharing platforms like Uber opened up a whole new market for people in transportation, Airbnb has the same transformative potential in tourism. The Tourism Amendment Bill undermines this potential.
Rule of Law Project

Its opponents say the bill represents a legally and economically unjustifiable intervention in the private and commercial affairs of ordinary South Africans.

The government published the “Airbnb” bill for public comment in April. Interested parties have until the end of June to submit comments.  Should it be signed into law, short-term home rentals will be regulated under the Tourism Act.

The minister of tourism could then specify various “thresholds” in terms of Airbnb rentals in SA. This could include limiting the number of nights that guests can stay or how much money an Airbnb host can earn. According to the department of tourism, this would level the playing field by ensuring that “everyone gets their fair share”.

In its submission on the bill, the Rule of Law Project — a unit of the liberal think-tank the Free Market Foundation — says that it is imperative that the tourism department abandon the bill and any similar plans to stifle the emerging short-term home rental market.

The unit said short-term home rentals such as those on Airbnb have enabled people previously unable to do so to make a living. On average, hosts can make about R34,000 a year, according to data from Airbnb. Homeowners using the online platform generated close to R5bn for the Western Cape economy alone in 2017.

“Just as ride-sharing platforms like Uber opened up a whole new market for people in transportation, Airbnb has the same transformative potential in tourism. The Tourism Amendment Bill undermines this potential,” the Rule of Law project said.

It highlighted that in the first quarter of 2019, SA’s GDP contracted by more than 3%, and the number of unemployed is now dangerously close to 10-million individuals.

“The economy is not able to handle more paternalistic interference from the state, like the present bill. What is needed is less interference and an opportunity for the economy to breathe; for ordinary South Africans to be allowed to provide for their own livelihoods freely, for instance, by making their homes available for short-term rental,” the organisation said.

Interventions such as those contained in the bill, which raise the cost of doing business, have a cumulative effect that leads directly to the poor performance of the economy. The government departments that propose, and the MPs that adopt, these measures, should be held personally responsible for any damage such legislation does to the economy, the project said.

It added that the bill is also constitutionally problematic and contains vague, ambiguous and unclear terminology, and bestows upon officials in the executive law-making powers that should be reserved for parliament.

“It is, furthermore, irrational. The claim that the bill seeks to level the playing field between the existing bed and breakfast and hospitality industry and the emerging short-term home rental industry, is misguided and ill-considered. If the department of tourism is truly concerned for the welfare of traditional establishments, it should rather remove restrictions on those businesses to make it easier for them to compete with short-term home rental hosts, rather than saddling the latter with unnecessary meddling in their affairs,” the Rule of Law project said.

However, echoing calls to regulate ride-share platform Uber, which has disrupted the taxi industry worldwide, local tourism industry players have long called for Airbnb to be regulated. The Federated Hospitality Association of SA argues that unregistered accommodation establishments marketed via Airbnb should be under the same regulations that are applied to the official tourism sector.

phakathib@businesslive.co.za