Sakeliga submits comment on the ‘Airbnb’ Bill: Rather ‘deregulate’ to ‘level the playing field’

15 June 2019

Sakeliga submitted comment on the Tourism Amendment Bill [2019] to the department of tourism this week. Members of the public had until 13 June 2019 to submit comments on the Bill that seeks to amend the Tourism Act of 2014.

Among other changes, the Bill aims to amend the Tourism Act in order to empower the minister of tourism to set national thresholds for short-term home rental. Short-term home rental is defined in the Bill as ‘the renting or leasing on a temporary basis, for reward, of a dwelling or part thereof, to a visitor.’

According to Gerhard van Onselen, senior analyst at Sakeliga, the thresholds the Bill envisions could have wide-ranging implications for entrepreneurs that have entered the tourism market through platforms such as Airbnb.

“The thresholds on short-term home rental, envisioned by the Tourism Amendment Bill, would likely boil down to short-term home rental entrepreneurs, at some point in their operations, exceeding a government-imposed limit for guest-stays, income earned or some other metric determined by the minister”, says Van Onselen.

“After crossing the imposed limit,” Van Onselen continues, “a short-term home rental entrepreneur would likely have to comply with more cumbersome and costly requirements for compliance, which may include commercial rezoning of dwellings, higher property rates and taxes, registration charges or other mandated requirements. Such requirements will mean higher costs to such enterprises, which we think hold clear trade-offs and should be considered in light of South Africa’s ailing economy.”

In considering the Bill, and following a number of stakeholder meetings, Sakeliga came to the following position on the Bill, which is outlined in its submission as follows:

South Africa’s economy and the business sector are underperforming: economic growth is weak, unemployment is high and many live in poverty.

Cumbersome red tape and regulatory burdens created by constrictive legislation are not helping to create vibrant industries, businesses and entrepreneurship.

The tourist accommodation sector is already subjected to many pieces of legislation from all levels of government.

Current legislation is cumbersome and carries compliance costs for hotels, guesthouses and B&Bs.

Excessive regulation will hamper the tourism sector in general, which is incompatible with government’s developmental goals for economic growth, small business development and the promotion of tourism.

Given the current economic situation and the existing compliance burdens on tourism, Sakeliga foresees the marginal impact of further laws and regulations to be economically detrimental.

Instead of placing new restrictions on one particular sector of the accommodation industry, Sakeliga proposes that government should attempt to find ways of lessening the regulatory burden of the industry as a whole.

Thresholds on short-term home sharing will make it more difficult for many entrepreneurs to participate in the global growth phase of the ‘sharing economy’.

The public cannot afford the South African tourism industry not making the most of the substantial opportunity that the ‘sharing economy’ presents.

In its submission, Sakeliga appeals to the new minister of tourism to give serious consideration to the impact of the current regulatory environment on hotels, guesthouses and B&Bs, and to determine the contribution of legislation to the cost of doing business in the tourist accommodation sector.

Sakeliga also requested the minister to find innovative ways of lessening the red tape, bureaucracy and legislative requirements that contribute to challenges for tourism enterprises in general and accommodation enterprises specifically.

Lastly, Sakeliga requested that the minister not hold back the short-term home sharing sector with national thresholds and cumbersome red tape.

What is next for the short-term home rental industry? 

Van Onselen explains that the department of tourism will now consider the public submissions it has received on the Bill. Thereafter, if the department decides to go forward, it will introduce the Bill – in its current format or in an amended format – in parliament. The Bill will then be referred to a parliamentary committee, during which further rounds of public participation will take place.

Sakeliga will keep a close eye on the progress of the current Bill and will participate in the next stages of the legislative process.

“We urge all parties, especially those that participate in the short-term home sharing market through services such as Airbnb, to participate in future public participation processes. Those that value our position can add their support for Sakeliga’s submission on our webpage,” Van Onselen concluded.

Support our submission

Sakeliga requests business owners, members of the public and organisations that support its submission to sign Sakeliga’s mandate form, which will strengthen the organisation’s mandate to participate in public consultations on the Bill during the next phases of the legislative process.

Read Sakeliga’s complete submission here.

Issued by Gerhard van Onselen, Senior Analyst: Sakeliga, 15 June 2019