Governments need to regulate Airbnb, etc. as hotels.
Publication:
Wednesday, 13 December, 2017 - 03:30
chiefofficersnet
The advent of services such as Airbnb has , in some parts of the world, created an interesting effect: hotels are seeing that groups would often prefer to rent serviced apartments via websites than use several hotel rooms. This has had a cooling effect on rates at the same time as making hotels improve their service levels or it has started a race to the bottom where room-only rates are coupled with reducing quality of service. That's competition but, just as Uber has been lambasted for encouraging unregulated drivers to compete with highly regulated drivers, so Airbnb, etc., are facilitating unregulated accommodation whereas hotels are subject to increasing levels of regulation.
The argument is simple: if a rented room in a hotel is subject to a range of health and safety measures and to the registration and taxation of visitors, then short-term rental accommodation should be required to meet the same obligations.
For example, it is widely touted that all overnight visitors to hotel rooms must be registered and that the register must be open to the authorities for inspection. The reasons are varied but include the prevention of prostitution and the prevention of terrorism. Frankly, neither justification truly stands up but they are what they are.
In the UK, for example, there are many laws, regulations and laws that apply to the provision of overnight accommodation, including self-catering (which is, once all the trendy jargon is stripped away, what Airbnb, etc. is). According to the British Hospitality Association, (1) provided a list, in 2015, and it admits that it might not be comprehensive.
Amongst the items are:
- if you leave alcohol for your guests, even if it's not specifically charged for, or if they are expected to replace it, that is still a commercial supply and you must have the licences required to sell alcohol. Failure to supply without a licence is a criminal offence.
- Under the mmigration (Hotel Records) Order, 1972 , all serviced and self-catering accommodation providers must record all guests over the age of 16 name and nationality and, for foreign guests, details of their next destination must be obtained and retained. Note, this is not limited to the names on the booking form.
- In general, premises must be accessible by the disabled.
- in general, it is illegal to discriminate on grounds of disability, gender, sexual orientation, gender re-assignment, pregnancy and maternity, race (ethic or national origin, colour and nationality), religion or belief or age (above 18 years).
The Association makes the example of an all-male group being required to pay a higher fee or deposit than a mixed group.
- if you provide transport e.g. collect from station and return, that requires a licence if it's a part of the deal and, perhaps even less obviously, the Association says that even for ad hoc trips, it may be regarded as part of the business and therefore it is important that car insurance carries an endorsement to permit that activity.
- if you employ a cleaner, you are subject to all the various things that being an employer brings, even if the cleaner is self-employed. You must provide a safe working environment.
And that's before the list moves onto matters of safety for electrical and gas appliances and furniture and the need for a "fire risk assessment." There are several aspects to fire risk, including specific requirements with regard to furniture.
- Overnight accommodation is required to be "no smoking" and suitable signs must be displayed.
- if you supply food and/or drinks, (for example a snacks-on-arrival pack) you must comply with the Food Safety Regulations which includes registration.
The list is much, much longer than this.
It is clear, then that in the UK, those who simply post their apartments, etc. on e.g. airbnb are, unless they do in fact take all the necessary steps, acting in unfair competition and, importantly, potentially illegally.
In Malaysia, industry groups have raised questions over Airbnb renters. Already finding that an upsurge in budget hotels has resulted in significant number of illegal operations, various groups say that Airbnb is even more difficult to identify from a regulatory point of view. In particular, they have expressed concern that the operators will not collect the MYR10 tourism tax. The tax, which at current prices is less than GBP2 per night, regardless of the "star" value of the hotel. Malaysian Customs say that they have met representatives of Airbnb who said they will co-operate by collecting the tax at the time of booking.
That's all well and good but it doesn't work like a hotel where individuals book in. For Airbnb, one person may book but several more stay, so evading the tax. The cpmpany told local media that there are more than 17,000 properties in Malaysia listed on its website.
Clearly, there is a need for far greater disclosure of Airbnb rentals as an accommodation business.
These are just two examples. Airbnb operates worldwide. Its actions should be regulated by governments worldwide and should recognise the realities which are that each rental is a self-catering holiday in accommodation provided by a business.
Airbnb should be required to ensure that all those who rent out properties are fully aware of their responsibilities under local laws and that all necessary licences, certificates and insurances are in place, just as companies such as Uber should ensure that licences, condition certificates and insurance are in order. Will that make their businesses more expensive to run? Yes, but no more expensive than running a hotel and that, in effect, is what Airbnb and its property owners are doing, albeit on a very distributed basis.