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Are Air-BnBs Crippling the Hotel Industry?

Are Air-BnBs Crippling the Hotel Industry?
March 08
16:16 2019

With the onset of technology and the ‘accommodation’ industry becoming more competitive, the Belize Tourism Board (BTB) is struggling to standardize short-term online rentals such as Airbnb and other similar service providers that keep expanding to meet the rising consumer needs.

Airbnb is defined as an online platform that allows homeowners to temporarily lease or rent out their homes or rooms to visitors at a reduced cost. This type of service caters to tourists who are seeking an authentic experience by living among locals and basking in the culture while at the same time taking advantage of the reduced price tag.

Air BnBs Offered In Belize

However, while overnight tourism arrivals keep trending upward, local hoteliers are reporting that their figures are not matching since out of 800 registered hotels countrywide, only 52% of their rooms are occupied. Hoteliers are therefore claiming that the impacts of their competition’s success in the form of over 600 active Airbnb properties available, is to blame for the decrease in their hotel room revenues.

Taking note of the discrepancies in the figures, local hoteliers say that they have urged the Government to look into what might be the contributing factors and at the same time, are asking that they standardize the Airbnb industry as it is known to undercut prices and in some cases bypass local taxes and requirements, thereby making the playing field uneven.

Executive Director of the Belize Tourism Industry Association, John Burgos, told the Reporter – “We need the Government to present more accurate data that is going to be able to determine global trends, local trends and allow us to make decisions based on the data that is being presented. So if the overall arrivals are increasing, we need to know that the occupancy rates matches and we need to have a measuring stick to see the impact of Airbnb and other similar platforms like Airbnb.”

In an interview with Yashin Dujon, CEO in the Ministry of Tourism, he admitted that Airbnb’s business does have an effect on hoteliers – “The emergence of the accommodation rentals sub-sector has indeed had an impact on hotel accommodations worldwide. Belize is no exception to this. Disintermediation has become very popular amongst the millennial traveler, and vacation rentals such as Airbnb, Home-away, as well as alternative transportation services have become a part of the diversified economy”

Dujon also clarified that contrary to what hoteliers perceive, all registered Airbnb properties in Belize do pay accommodation taxes, and are required to register with the BTB. However, the difficulty lies in keeping track of how many active properties there are, and whether they are registered, occupied and paying the requisite taxes. In an effort to crack down on Airbnb’s activities the BTB is physically dispatching personnel on the ground to locate properties as well as tracking listings and bookings online.

Ted Tejada, President of the Belize Hotel Association, told the Reporter that he is not against Airbnb operating in Belize, but is against them not registering their properties, not getting the certification and paperwork and not paying the requisite taxes, which puts them at an advantage.

However, Tejada says that in the interim, hoteliers need to adapt, with the trend of buyers becoming more tech-savvy, “What our hoteliers need to understand is to get smart here in terms of selling their own products. The buyers’ perspectives have changed. It is becoming a buyer’s market as compared to a seller’s market. Consumers are becoming a lot smarter with the tools that the internet provides. We don’t need to panic. We just need to study how the buyers are buying so that we can capitalize on it.”

Dujon additionally prophesies that tourists will continue to seek out the local experiences and as long as the demand is there, then the buyer preference is something that cannot be controlled – “The demand for hotels is not going down. There is a shift in tourism demands and the industry must shift with the trends. Some hotels are already marketing on vacation rental sites, adding new amenities and different accommodation packages to remain competitive.”

While the Reporter was informed that legislative measures to more strictly regulate the Airbnb industry are in the planning stage, hoteliers are asking for information to be shared on how many Airbnb properties are operating in the country and for an update on the reinforcement regulations established among BTB and Airbnb representatives back in 2017.

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