Gov't must not fall into JHTA trap on short-term rentals


Gov't must not fall into JHTA trap on short-term rentals

Thursday, July 04, 2019

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The call by the umbrella Jamaica Hotel and Tourist Association (JHTA) for a tax on income from short-term rentals is premature and smacks of trying to use the Government to eliminate what the association sees as unwanted competition.

The short-term rental sector, launched on the backs of home-stay vacation platforms such as Airbnb, and Expedia, among others, is in its nascent state and far from ready for taxation.

No serious study has been done on this sector to determine more precisely its true value and the impact it has been having on the Jamaican economy. The mostly anecdotal evidence used by detractors like the JHTA and the Real Estate Board to base their self-interested recommendation to the Government is quite insufficient.

Moreover, the hoteliers and realtors had earlier shown their hand as being opposed to the growing number of Jamaicans opening their homes to visitors, and thus sharing in the tourism pie. The hotels, in particular, seem to want it all for themselves.

There is no clear sign that hotels are suffering from any adverse fall-out from short-term rentals. Last year, more than four million visitors came to Jamaica and, at current pace, the five million figure is set to be surpassed this year.

It is highly suspicious when one sector is urging Government to tax another. We in this space have suggested that, not a tax per se, but a fee collected by Government could be used to boost programmes aimed at improving community health and security.

This would aid in protecting visitors who stay in local communities and spread the benefits to small people by enhancing a brand of tourism which is gaining ground across the world.

It is helpful to note that the home-sharing activity has also been benefiting Jamaicans living abroad who can come home more often to visit relatives and friends, and are able to stay in or near communities from which they came, because of the ultra-affordable rates.

Airbnb et al cater largely to lower-income individuals wanting vacations previously affordable only to the well-to-do and, in a sense, are not direct rivals to the big hoteliers.

Prime Minister Andrew Holness and Tourism Minister Edmund Bartlett were correct in their original position that there is scope for greater expansion of the Airbnb service in Jamaica, which earned hosts in Kingston an estimated US$2.4 million in 2017.

“This is all a part of Brand Jamaica, and the beauty of the Airbnb solution is that it allows the average Jamaican to participate in the hospitality industry and use Brand Jamaica,” Mr Holness has said.

Mr Bartlett, for his part, has been working with the executives of Airbnb to streamline the service in Jamaica to make it seamless, thereby resulting in its continued growth locally. Such initiatives need to continue and expand before any talk of taxation.

The temptation will always be there. It is similar to the fledgling cannabis and nutraceutical industries. We must be careful not to kill them off before they can take root.

The JHTA's attempt to hijack the Government to straightjacket the competition on their behalf is a trap the Administration would do well to avoid.

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