SLHTA Supports Regional Efforts to Regularize and Unleash Potential of Growing Vacation Home Rental Industry

The Saint Lucia Hotel and Tourism Association (SLHTA) is applauding the Caribbean Hotel & Tourism Association’s (CHTA), efforts to find solutions to address the challenges and opportunities presented by the rapid rise of the online vacation home rental industry and other sharing economy businesses being fueled by hosting platform companies like Airbnb and Uber. CHTA has released a Resource Guide to support efforts to create a level playing field for greater standardization through regulation of the informal accommodation sector and its engagement in local public and private sector tourism development efforts.

On 08 March 2016, the SLHTA presented a position paper titled “The Sharing Economy: Developing our Alternative Accommodation Sector in Saint Lucia” to the Ministry of Tourism, Heritage and Creative Industries calling for greater attention to be paid to this emerging sector so that Saint Lucia can optimize the opportunities for small properties operating on these platforms.  Noting recent information from the Saint Lucia Tourist Board that this sector now accounts for 15% of arrivals locally, SLHTA President Sanovnik Destang posits that “SLHTA is fully supportive of the need to create a level playing field and look forward to working with government to advance the recommendations provided by our position paper as well as the CHTA report.”

Destang also stated that “Regional growth in this sector is not simply driven by a desire to source cheaper accommodation options, but also out of a desire for an authentic experience and travelers being more independent minded in their travel planning.” The Caribbean has seen explosive growth in the short-term vacation home rental business. Taking advantage of new technology platforms, many residential owners throughout the world are sharing in tourism revenues by providing accommodations through marketplaces or host platforms such as Airbnb, VRBO, and HomeAway which have emerged as the industry’s top leaders.

Airbnb, in particular, recorded more than 25,000 listings in the Caribbean as of February 2016 and is projecting significant regional growth this year for this sector. Aruba saw the number of visitors using non-traditional accommodations (private homes, apartments, villas, condominiums) in 2015 jump from 24% of visitors to 33%.  Destinations such as the Dominican Republic, Cuba, Puerto Rico, Guadeloupe, Jamaica, Cancún, Martinique and Barbados feature the most listings on Airbnb with continued growth projected throughout the entire region.

Locally, the St. Lucia Tourist Board has also noted increases in arrivals to this sector last year.

“As many governments throughout the world have experienced, the sharing economy made possible by these hosting platforms is happening whether or not we choose to embrace it and it presents new opportunities for the industry as well,” said CHTA President Karolin Troubetzkoy. “This leaves us with two options: we can allow it to develop as an under-regulated market and lose out on tremendous opportunities or we can bring all the players to the table to work out solutions to the benefit of all concerned parties,” added Troubetzkoy.

“CHTA has endeavored to take a positive, constructive and balanced approach to the Guide, welcoming this rapidly developing accommodations sector but also calling for a fair play arrangement regarding taxation and some measure of standards beyond those applicable to residences. CHTA is not calling for there to be the same detailed and sometimes onerous regulatory requirements for hotels, but for a level of regulation beyond those which simply apply to private residences. These are commercial enterprises regardless as to how one looks at it and the welfare of the guest and health, safety and reputation of the host property, the hosting platform, and the destination must be considered,” according to Troubetzkoy.

The Guide provides the region’s public and private sector tourism stakeholders with a summary of the key issues surrounding the sharing economy, its impact on the tourism sector globally as well as regionally, and the opportunities presented by this emerging accommodations sector.

It offers solutions and new approaches for the Caribbean’s NHTAs and governments to consider when regulating and regularizing this emerging industry. And it sets the stage for engaging the emerging accommodations sector in organized public and private sector efforts to protect and grow the tourism industry.

The proliferation of Airbnb and other such hosting platforms is also beginning to effect airlift capacity to some destinations. In some cases, increased airline load factors have reduced the number of seats available for traditional hotel guests or have driven up the cost of air tickets. “Therefore, it is important that we account for this growing accommodations sector in our research, product development, airlift development, and marketing efforts in order to plan accordingly,” noted Troubetzkoy.

Increasingly, governments throughout the world are working in partnership with local tourism industry stakeholders and hosting platform companies such as Airbnb, taking a proactive approach to addressing challenges and concerns. With the support of companies like Airbnb, destinations are adopting new measures to address standardization and regulation of home vacation stays.

Underscoring the untapped potential for Caribbean jurisdictions experiencing budgetary challenges, a 2016 Airbnb study estimates that the 50 largest cities in the U.S. would have collected an additional $200 million in occupancy taxes in 2015 if taxation measures and supporting collection and enforcement protocols were in place.

At the same time, concerns over the safety and well-being of both travelers and their non-traditional hosts are also prevalent. Traditional hotel and taxi businesses operate with strict property and insurance liability requirements and must meet stringent safety, cleanliness and operational standards, which are kept at a voluntary minimum for most home rental operators

“The sharing economy presents tremendous entrepreneurial possibilities for more Saint Lucians as it fills airplanes, diversifies and supplements the accommodation stock and boosts the fortunes of tours, attractions and independent restaurants as these guests are more likely to explore our island while supporting other micro enterprises.” said Destang.