Will SA overregulate short-term rentals?

Short-term rental industry groups have called on the government to be cautious when regulating their sector.

In a Green Paper published earlier this year (the Development and Promotion of Tourism in South Africa), the Department of Tourism proposed new regulations for short-term rental properties, including potentially limiting the number of nights they can be rented per year. The Paper also discusses concerns that a “flood” of unregulated rentals could push down short-term accommodation prices to levels that are unsustainable for regulated operators.

But last month, the Federated Hospitality Association of Southern Africa called on politicians to prioritise job creation, arguing that short-term rentals provide much-needed jobs and income. A survey by Genesis Analytics found that Airbnb alone provided R23.5 billion to the economy last year. That being said, limiting the number of days that short-term rental properties can be let could reduce that figure.

Meanwhile, other industry professionals have said that registration of short-term rentals is unnecessary, as no such scheme exists for formal tourist accommodation.

Growing the sector

While some professionals worry that politicians could do more harm than good, short-term rentals form a key part of the government’s tourism strategy – and the sector’s biggest player seems to be on board. In September, the Department of Tourism signed a Memorandum of Understanding with Airbnb which includes cooperation on the proposed registry of short-term rentals. The MoU forms part of the Department’s long-term plan to revive tourism in South Africa after the COVID pandemic.

But what works for the giant platform may not work for individual short-term rental providers. The Department will need to work with all stakeholders to develop policy that is good for the industry as a whole. The results of their public consultation, which closed at the end of October, may give them some guidance.