Willemstad – July 31st 2017, Many would argue that the hotel sector is against alternative accommodations. The introduction of AirBnB in 2008 to the lodging industry created a significant change to the Tourism Landscape. Many were uncertain of how this would impact the hotel business in general and hotels were perceived as unwelcoming of this new online host. However today in 2017, the industry giants, the hotels have long understood that similar to other industries that have undergone massive disruption it is important to embrace change and adapt to the shifting needs of their customers in order to survive.
The fact is that today’s customers are finding new ways to explore destinations and are looking for a different type of product. The Hotel industry both locally and on a global level are taking on their responsibility to innovate in order to maintain and grow their market share. The big elephant in the room is always referred to as AirBnB. AirBnB however, isn’t a completely new idea. Like most innovations, AirBnB is an improvement of an already existing product. Through technology, they have made unknown alternative accommodations within a destination accessible to all.
Nevertheless, however much the Hotel Industry embraces the Sharing Economy they would also like giants such as AirBnB, Booking.com, Expedia and Homeaway.com and other accommodation providers to “share” in its responsibilities towards the destination. In order to achieve sustainable development of the tourism industry and the destination as a whole, the hotel industry is subjected to many laws and regulations such as the payment of taxes on accommodation nights. Taxes paid by accommodations providers make up a significant portion of the budget available to Curaçao Tourism Board to invest in the marketing of the destination and product development.
An increase in our efforts as a destination to improve the performance of the industry is therefore inextricably bound to the contribution of all parties benefitting directly from the industry. Therefore, CHATA advocates for a level playing field where all business within the tourism industry exercise their responsibility towards the development of the industry and adhere to the law by complying with their taxes.
Curaçao, in this case, must be able to adopt new laws and legislation to keep up with the growing room inventory that is not being held accountable with for example LGB which is now referred to as OB. Curaçao is missing out on additional income for the government by not introducing strong legislation and policies for the alternative accommodation market. According to CHATA, we could be collecting more than 10 million guilders on a yearly basis additionally just by simply introducing a stronger policy and regulation.
According to President & CEO, Miles Mercera “creating a Level Playing Field” should be our top priority. Tourism Investment and Benefits should be a collective effort. We all agree that we need additional Air Service or Marketing, but the current budget does not allow this to happen, therefore it is imperative to re-design our efforts of collection in place of LGB/OB and make sure that all who benefit from the industry also participate with their financial contribution.”
MOU AirBnB – Where are we today?
In January of 2017, the government of Curaçao signed an agreement with AirBnB for the collection of taxes. 7 Months later the sector is still pending to receive an update on what the actual agreement is and if this has been implemented. All destinations around the globe are focusing on these types of agreements and introduction of regulation to stimulate a level playing field and participation of all. Currently, we have about +/-15.000 visitors making use of the AirBnB platform when booking Curaçao. Despite AirBnB tax agreement not being the only solution to a level playing field, it is considered a good start.
CONTRIBUTING TO THE GREATER GOOD AND BENEFIT OF ALL
Most hotels throughout the region and in this case Curaçao voluntarily support the marketing, airlift development, education and training, infrastructure and product development needs of the destination – financially, in-kind, and by volunteering with their expertise. This is typically done through non-profit associations like CHATA, Enhancement/Beautification Funds, Promotion and or Tourist Boards. Often these efforts are leveraged with public sector funds and resources. It is important to note that these collective efforts benefit the overall destination and all businesses, whether one is a contributing company or not. Therefore CHATA advocates that the sharing economy host platforms and hosts also “share” in the organized efforts to support the marketing, product development, and local advocacy efforts within the destinations by contributing through the payment of their taxes.
In this analysis, CHATA used an example of the Alternative accommodation sector, but this is also relevant and important for other sectors such as the Car Rental industry.
CHATA has sent a letter to the Minister of Finance urging his attention to this matter and to provide the Minister with its assistance with the development of a level playing field for all accommodations. It should be a priority for government and not only the tourism industry. CHATA firmly believes that it is time to invest and take the necessary actions to stimulate a level playing field which benefits the greater good and benefit of all.
For more information on CHATA’s mission and member benefits, visit www.chata.org