As the success of platforms like Airbnb continue to take the world, including Cape Town, by storm, Neil Markovitz – industry leader and MD of Newmark Hotels, Residences, Reserves & Lodges – cautions fellow tourism executives, city authorities and the public about the pitfalls of unmonitored hospitality systems. In an official statement, Markovitz shares his insight into the current situation pertaining to short-term rentals and the need for Cape Town to take the lead by initiating the responsible management thereof.

There is no arguing that Airbnb, undoubtedly the most popular short-term rentals platform available to the public, has developed a workable formula for property owners to generate a decent income. The stats recently released by the company bring this to light. [According to statistics recently released by Airbnb, an estimated total of R 1 billion was earned by hosts in the Western Cape during the period September 2016 to September 2017 and an estimated total of R 5 billion worth of economic activity was generated in the region during the same period.] It can also not be denied that this platform, or any similar concept, has the ability to support the tourism industry and in turn, the economy. What is not offered, however, is the assurance that this platform and its users are being effectively monitored to ensure that the necessary rules and regulations that apply to the hospitality industry on the whole are being followed.

The City of Cape Town requires that hosts apply for permission to use their property (especially, but not only, group housing and flats) as an Airbnb unit; however, it must be asked whether this is being enforced to a sufficient degree by Airbnb or city authorities. After all, many individuals might not even know about these requirements or the details thereof. While it is stated in Airbnb’s terms and conditions that hosts need to comply with the respective area’s zoning laws, one is left to wonder whether there is any follow through after the host has ticked the box, agreeing to the terms and conditions. I believe there is room for greater teamwork between Airbnb and city authorities to be practised, collaboratively upholding stricter controls. I point out two fundamental issues at play to support my conviction.

Firstly, unmonitored systems have a greater risk of unravelling as a gap for accountability is left wide open. Much of the Airbnb system is essentially underpinned by trust, weighted mostly by online reviews. Controlled environments serve to ensure that a certain standard is consistently upheld – and there are repercussions if they are not. One of the greatest concerns, when it comes to the local, private short-term rentals market, is whether health and safety standards, including fire protection, are being enforced across the board. There are of course other factors such as noise, parking and further logistical aspects to consider.

On the international map, cities like New York, Barcelona, Paris and Amsterdam, among others, have implemented strict laws that govern the short-term rentals market. This proves that regions which have long tested the Airbnb waters have noticed the need to intervene to keep their tourism industries on an even keel. It has been reported that substantial fines have been handed out in a number of these cities to Airbnb and individuals for breaking the laws. This highlights the tendency among certain hosts to do as they please – and bear in mind; this is in a controlled environment. How much worse is the “boundary pushing” in an unmonitored space?

That leads me to my second point. While the figures that highlight Airbnb’s success locally are considerable, they are only one snapshot of the bigger picture. The entirety of the economic situation is not being taken into account to a sufficient degree. Are hosts meeting the minimum wage requirements? Are they declaring tax on the earnings gained via this platform? We can’t say. What we do know is that their doing so, or not doing so, ultimately impacts the wellbeing of individuals and the economy. Some might argue that the benefits of guest spend in the city and its surroundings outweigh these failings. Even if that is the case, it unfortunately doesn’t justify the behaviour. Further, as Airbnb grows in popularity in our city, the scale of such financial ramifications is likely to shift.

Ultimately, my appeal boils down to initiating the practice of fair operating systems within the tourism industry that protect all of its members, the city’s residents, visitors and the economy. My intention is not to discredit the concept of Airbnb or the like, but rather to highlight the need for an effectively and consistently monitored environment when it comes to private short-term rentals. Given Cape Town’s international visibility and its ability to positively influence other regions of South Africa, I feel we have a responsibility as members of the city to stand together to ensure that solutions which support the long-term sustainability of our tourism industry and the establishments that form part of it are implemented.

Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

Not readable? Change text. captcha txt

Start typing and press Enter to search