Tourism Amendment Bill And The Implications For Airbnb Owners

13th May 2019

Tourism Amendment Bill And The Implications For Airbnb Owners

On 13 November 2018, this author herein wrote an article on Airbnb rentals in South Africa and the implications thereof.

On 12 April 2019, government gazetted the draft Tourism Amendment Bill (hereinafter referred to as “the Bill”) which amends the Tourism Act 3 of 2014.

Some of these amendments will have a significant impact on property owners offering Airbnb facilities. These changes are discussed below.

The trend towards Regulation of Short-Term Rentals
Calls for regulation of short-term rentals via platforms such as Airbnb, are in line with international trends. These calls have come predominantly from what might be termed the formal tourism sector which comprises of conventional hotels and guest houses.

One argument in favour of this regulation is that long term accommodation providers are bound by regulations & licensing requirements which short term providers are not. As a result, they incur greater overheads resulting in short term competing unfairly. A second argument in favour of the regulation is that Airbnb listings create so called miniature property bubbles whereby people buy properties and artificially inflate prices.

Proposed Thresholds under the Bill
If passed the Bill would “empower the minister of Tourism to determine the 'thresholds' regarding these short-term home rentals”.

Some of the Thresholds brought about by the Bill, if passed will include:

  1. Imposition of thresholds on the number of nights an Airbnb may be rented out
  2. Limitations an Airbnb host may make on a property.
  3. Possible zoning restrictions on where Airbnb’s may operate.

While many of the details of the above have yet to be elaborated on, one of the clearer and significant changes is the insertion of the definition of “Short term rentals” which is defined as follows:
Short-term rental means the renting or leasing on a temporary basis, for reward, of a dwelling or part thereof to a visitor”. The fact that the current Tourism act does not explicitly define the terms “dwelling” or “visitor”, means that there are almost certain to be court challenges as to the meaning of the above definition. Further the Bill does not specify the depth of the Ministers discretion in determining such thresholds and whether such a discretion is unfettered or not.

Finally, while there are for example zoning restrictions which may apply to an Airbnb, these are notably only at local bylaw level. It remains to be seen how such local bylaws would interact with the Bill if it is passed as National Legislation.

In conclusion, the draft Bill still requires substantial clarification on the proposed thresholds, and the new definition in the Bill.

Furthermore, while there is arguably need for some degree of regulation Government should be careful so as not to overburden the short-term rental industry by way of regulation.

Written by Max Rainer, Candidate Attorney, SchoemanLaw