Airbnb eating into hotel revenues, MHRA boss says

The economics of the hassle-free renting of Airbnb’s technology is worrying hoteliers

When you book your Airbnb apartment on Rue Faubourg Saint Martin in Paris, it will usually be the owner’s friend who is waiting round the corner to give you the key to the place – not some receptionist. At €70 a night for a tiny, two-bedroom sixth-floor apartment with no elevator (you also have to feed the cat because the owner’s away, of course) and self-catering, this might be a more authentic and cheaper accommodation to savour the city.

But it is the economics of the hassle-free renting of Airbnb’s technology that is worrying hoteliers. Just like Uber allows people to turn their own cars into taxis, much to the consternation of licensed taxi drivers, so is Airbnb getting hoteliers’ dander up as MHRA’s Anthony Zahra was quick to point out this week.

There was an increase in arrivals of 8% between the second and third quarter this year, and yet Zahra says the only increase in accommodation was registered by private accommodation at 9%. “We [hotels] stayed where we were,” he said of the data collected from the National Statistics Office’s surveys of departing tourists.

Tony Zahra
Tony Zahra

Zahra used this data to lay out his demand for proper licensing of any private accommodation. In a nutshell, if hotels must be licensed on health and safety regulations, so should anyone renting out their spare bedroom.

“Whatever applies to a hotel in terms of licensing should also apply to any other premises being rented to tourists. They must come in line with the rules – not more rules, just comply with the present rules,” Zahra said, demanding a level playing field for anyone in the business of accommodation.

“If the government says that MHRA members should be licensed, then it should apply to anyone putting up their apartments for tourist accommodation. If you need a fire preventive system in a hotel, should it not apply for an apartment welcoming tourists?”

Zahra deflected claims that MHRA’s beef was with the sharing economy’s intelligent use of technology.

“I’m not trying to keep the world from turning, but it cannot be that licensed hotels are disadvantaged by unlicensed accommodation. So what if somebody dies in one of these apartments because of some fire hazard? Will the government then license these places? It’s that kind of accident that would hurt the industry. But if you’re welcoming tourists in your home, you’re in the business as much as I am – and that means you should be subject to rules much as I am.”

Zahra’s concerns are no mere angry demands. The effects of the sharing economy prompted by Uber and Airbnb has elicited angry protests in Barcelona and the Greater London assembly. The Catalan capital banned Uber, and hit Airbnb with heavy fines for not being registered just like other private BnBs.

Malta has some 260 vacation listings on Airbnb, all commanding rents at premiums that raise the issue of whether all this money even gets declared for tax purposes when most of it is paid via Paypal or with cash in hand.

Only this week, Milan and Lombardy regions exempted residents who share their homes using Airbnb from normal registration rules. “Rules for home sharing in Lombardy were confusing, including complex registration requirements. They were designed for businesses and professionals, and could be difficult for regular people to understand,” Airbnb said.

The new rules basically recognise that Airbnb hosts are regular people sharing their homes and that is a non-professional activity. Instead they will have to notify the authorities that they are home-sharing.

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