The Tourism Amendment Bill, which was published in the Government Gazette on April 12 and put up for public comment, has been criticised as being an attack on home-sharing apps such as Airbnb, as well as the "Experiences" that are offered via the platform.
The Ministry of Tourism has defended the Bill by saying that the clauses dealing with home sharing and tour guiding, and which recommend the redefinition of short term rentals (STRs), are simply attempts to regulate competitiveness. This will be done by possibly introducing thresholds, for example, or by defining how many days a place may be rented out for, or for how much money. Setting ratios between tour guides and tourists is aimed at the same goal. To quote ex-Minister of Tourism Derek Hanekom, speaking in April: It’s about "levelling the playing field."
My concern here is that it is less about levelling the playing fields than it is about leveraging entrepreneurship and even local tourists out of the marketplace. And this at a time when our economy is highly dependent on small businesses, mostly as a way to reduce the stress placed on households through to the devastating effects of unemployment. Making ends meet is harder than ever for many: the most recent data released by StatsSA has shown an additional 3.2% contraction in the economy in the first quarter of this year with unemployment now sitting at an all-time high of 27.6% (officially).
Hanekom also drew comparisons with regulations that exist regarding home sharing platforms in cities such as London and Paris. But South Africa is neither the UK nor France.
There is nothing wrong with regulation, if regulation is done in the right spirit. But, like many others, I believe this particular regulation in its current form is being proposed for one reason only: to protect hotels. And it creates a situation where big business, once again, gets to be in a core relationship with government, obviously in contradiction to the interests of creating more small businesses or servicing diverse markets.
Championing industry competitiveness
The number one objective of the existing Tourism B-BBEE Sector Code is to ensure that South Africa’s tourism industry is globally competitive. Its second objective articulates that the tourism industry must lead to the participation of the previously disadvantaged, both as tourists and as product owners.
Not only do new technologies such as home-sharing apps ensure that we have a globally competitive tourism industry, with choices for every pocket, they also ensure the participation of the previously disadvantaged as product owners and as tourists. So, with one pass of the pen, the new regulations, if adopted as they are being proposed, might actually defeat not just one, but two critical objectives of the Tourism BEE Act.
If one of the intentions of the legislation was simply to establish how many people make use of home sharing technology to rent out short-term accommodation, this would be a realistic amendment. As an example, there are a number of cities around the world that require Airbnb hosts to register with the relevant tourism body. However, our proposed amendment goes further to try and regulate operations, and fundamentally I do not believe that government has the expertise to be able to police the system. One must be careful of creating legislation for the sake of legislation, without being able to implement it.
The idea of thresholds, whether these be in limiting the number of days in a year a home sharing business may run or how much income a host is able to make from platforms such as Airbnb, in particular, goes against other government policies that promote small business. Thresholds may work in other countries, but not in the unique context of South Africa.
For example, the Airbnb Africa Academy, launched last year in Khayelitsha in Cape Town, and following a test phase across 12 Western Cape and Gauteng communities, is a highly successful initiative now being rolled out to other areas in South Africa. Its sole purpose is to encourage healthy tourism and entrepreneurship in rural and under-resourced communities across the country by taking people who were using more basic homestay programmes and training them up in order to be able to use the Airbnb platform.
Already, participants are reporting more uptake on beds available, and it’s been a great success story from an empowerment perspective, not only on how to promote small business, but to create accommodation options in areas that have few other options available. How can you then limit – or even hope to police - the number of nights that these small businesses will be allowed to house guests?
I have no doubt the public hearings around the Bill have been well-supported by people coming forward to indicate how platforms such as Airbnb have been an important way for them to earn money and become entrepreneurs. And government will once again be reminded that small business is needed not only to drive the economy but to offer alternative accommodation at a cheaper price, particularly to ensure the growth of our own domestic tourism under the tough economic conditions we are facing. These regulations will do more harm in destroying this sector overall than supporting it.