Airbnb, short-term rentals must be monitored - expert

As the success of platforms like Airbnb continue to take the world, including Cape Town, by storm - Neil Markovitz, managing director of Newmark Hotels, Residences, Reserves & Lodges, warns of the pitfalls of unmonitored hospitality systems.

Markovitz admits there is no arguing that Airbnb has developed a workable formula for property owners to generate a decent income. 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, cautions Markovitz, 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 are being followed.

The City of Cape Town requires that hosts apply for permission to use their property as an Airbnb unit. However, the question is whether this is being enforced to a sufficient degree by Airbnb or city authorities, says Markovitz. Hosts also need to comply with the respective area’s zoning laws.

"I believe there is room for greater teamwork between Airbnb and city authorities to be practised, collaboratively upholding stricter controls," says Markovitz.

Unmonitored systems

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," he explains.

"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." 

Cities like New York, Barcelona, Paris and Amsterdam, among others, have implemented strict laws that govern the short-term rentals market. This proves to Markovitz 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?" he asks.

Other questions Markovitz raises include whether hosts are meeting the minimum wage requirements and whether they are declaring tax on the earnings gained via this platform.

"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," says Markovitz.

"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. 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."

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot