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The Truth about Airbnb Hurting South African Tourism

While much has been made about the impact of Airbnb on South Africa’s traditional accommodation sector, the biggest thing holding back local tourism is the struggles overseas visitors face to get a visa to visit the country.

That is according to Federated Hospitality Association of South Africa (FEDHASA), recognised by the government as the main representative of the hospitality industry.

FEDHASA previously called for urgent regulation of short-term rental platforms like Airbnb in 2017.

It called on the government to ensure that these platforms met the same operational requirements as traditional accommodation operators and that they ensured the safety of their users.

The Department of Tourism subsequently revealed its intention to regulate Airbnb and other home-sharing apps in April 2019 through the Tourism Amendment Bill.

It published a green paper on the development and promotion of tourism in South Africa in October 2023, undertaking a policy review process that will inform the regulations in the Bill.

Among the proposals under consideration is to give the Minister of Tourism the power to determine certain thresholds for Airbnb locations in South Africa, including limits on how many nights a customer can book at one location.

The department explained that the proliferation of Airbnbs could cause a surplus of unregistered accommodation properties, damaging the value of formal operators’ properties.

These operators — including non-Airbnb guest houses and hotels — have higher operating costs due to hospitality taxes, levies, insurance, and other government-mandated criteria.

While they generally do not mind small-scale Airbnb hosts that rent out a room or garden cottage, they take issue with small-to-medium guesthouses that claim to be private homeowners.

FEDHASA’s stance on Airbnb has cooled down somewhat from a few years ago.

Commenting on the green paper in October 2023, it warned that the regulations must focus on job creation, pointing out that onerous requirements could hamstring smaller accommodation operators in poorer communities, including those that benefit from being on Airbnb.

“As these platforms are now a substantial part of the tourism sector, we support a balanced approach that protects consumers while encouraging entrepreneurship,” FEDHASA said.

“However, we request a discussion on reasonable regulation aligned with international best practices.”

South Africa “shamefully behind” in tourism recovery

FEDHASA chairperson Rosemary Anderson told MyBroadband the more serious inhibitor of tourism growth in South Africa was its visa processes.

She explained numerous accommodation providers relied heavily on international tourism and South Africa had still not fully recovered or exceeded pre-Covid-19 tourist entries.

“At the end of December 2023, South Africa was sitting at a 79% recovery compared with 2019’s data,” Anderson said.

“South Africa currently lags shamefully behind other nations due to our cumbersome, nonsensical visa processes, while countries with efficient and hospitable visa reform strategies vastly outperform us in attracting tourists,” Anderson said.

“Consequently, declining tourism figures adversely impact all segments of the accommodation industry, with the exception of the high-end hotel sector, particularly prominent in Cape Town compared to other major South African cities.”

“This trend could be reversed through vital improvements to our visa system, particularly by making it more accessible and easier to navigate for key tourism growth markets such as India and China.”

Anderson said that a radically reformed visa system could inject millions in foreign currency into South Africa’s economy, fostering extensive job creation and enhancing the affordability of holiday accommodation for a far broader demographic.

As South Africans’ disposable income increases, bookings of accommodation by domestic tourists could also climb.

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