The COVID-19 pandemic has disrupted business operations for both the traditional tourism accommodation sector and Airbnb properties globally.
The Caribbean Hotel and Tourism Association (CHTA) expects recovery to be gradual, with 28 per cent of Caribbean tourism businesses expressing confidence in a tourism turnaround by the end of 2020 but most anticipating a significant turnaround to take longer, into the first half of 2021.Just last month Airbnb announced that it is expected to lay off 25 per cent, or nearly 1900 out of its 7500 employees from its workforce.
This, as the home-sharing and rental company suffered a setback because of the coronavirus pandemic, which has brought global travel to a virtual standstill.
Airbnb’s CEO Brian Chesky, who remains hopeful the industry will recover, explained that when a hotel goes below 30 per cent occupancy, this usually results in closure.
“It’s at some point not cost-effective to run the hotel. But if you have a listing on Airbnb, a home or experience, it doesn’t cost you anything to keep it up,” he said.
He said this means that the platform and its properties can weather the COVID-19 storm to supply the accommodation needs of visitors who will brave travel in the coming months.
Additionally, Chesky noted that given the heightened sensitivity of travellers to sanitation measures, the possibility of renting a single apartment or a less populated space on Airbnb, may be more attractive than staying in a hotel with many guests.
What does this mean for T&T Airbnb’s industry going forward?
Dr Acolla Cameron, Dean of the Faculty of Social Sciences and Senior Tourism Lecturer at UWI said more than ever policy makers must consider the establishment and enforcement of a regulatory framework for the accommodation sector.
She also advised that the T&T Tourism Regulatory and Licensing Authority be revisited to properly account for the number of legitimate tourism accommodation providers in T&T.
“Our research indicates that the traditional tourism accommodation sector is not averse to new technology platforms like Airbnb but demands that it is properly regulated with integration into the national tourism policy framework and the application of appropriate taxation measures,”Cameron added.
Research Assistant at UWI, Tenisha Brown-Williams, also the co-owner of ShareHome Caribbean noted that COVID-19 has added another twist to this unregulated phenomenon with a heightened responsibility of the accommodation sector to adhere to strict sanitation practices to curb the spread of the disease and to encourage social distancing practices.
She said while social distancing can be practised at some Airbnb properties, it may be difficult in instances where the space is shared with other guests or owners of the property.
While Airbnb has provided COVID-19 guidelines on its platforms for both hosts and guests, there is no mechanism in place for to ensure adherence to these guidelines, Brown-Williams added.
“While personal responsibility must be practised by both Airbnb hosts and guests, this is where Government regulation is sorely needed to enforce standards to prevent any unfortunate occurrences that can potentially damage the reputation of the destination,” Brown-Williams said.
She emphasised the interim guidance for cleaning and disinfection at hotels, guest houses and other tourist accommodation, paying attention to high-touch surfaces such as light switches, remote controls, handles and knobs and food preparation surfaces.
ShareHome Caribbean, the first of its kind in T&T to help locals organise their spaces in adherence to national accommodation standards.
“We work with standards developed by the T&T Bureau of Standards to ensure that our clients offer a quality experience and value for money.
“We encourage our policy makers to formerly integrate Airbnb into the existing tourism policy framework starting by establishing a Memorandum of Understanding with the company like many other Caribbean countries,” Brown-Williams advised.
Additionally, she said Airbnb hosts genuinely need assistance to understand how to utilise the platform effectively as it relates to pricing and customer engagement.”
Impact of Airbnb on the traditional accommodation:
Airbnb is certainly not a new phenomenon in T&T; a quick review of the ‘peer to peer’ (P2P) accommodation website revealed hundreds of local houses, apartments,villas and rooms in T&T listed for use by both local and foreign consumers.
The Caribbean alone has over 50,000 active listings.
Globally, Airbnb has over seven million properties listed in over 100,000 cities which accommodates an average of two million people plus per night.
Since its birth in 2008, Airbnb has accommodated a total of 260 million guests and has an overall net worth of US$438 billion.
Globally, the hotel sector has expressed concern about Airbnb over the loss of market share, tax avoidance and lack of government regulations.
Brown-Williams said research indicates that in many instances a 10 per cent increase in Airbnb bookings corresponded with a 0.37 per cent decrease in hotel revenue and more so at lower end-hotels, independent hotels and non-business hotels.
The Tourism, Hospitality and Sport Unit (THSU), UWI in collaboration with the Trinidad Hotels, Restaurants and Tourism Association (THRTA) recently conducted research on the impact of Airbnb on the traditional accommodation sector in T&T.
The research explored the impact of Airbnb with specific focus on micro, small and medium-sized accommodation facilities.
The study used a qualitative research approach to determine the extent of the impact as perceived by the traditional accommodation sector and policy makers and to identify measures for effective management of Airbnb properties in T&T.
Brown-Williams explained indepth interviews were conducted with 19 tourism stakeholders including public tourism officials in both islands.
Six main areas emerged:
*Airbnb as a reason for the decline of business to the traditional tourism accommodation sector
* Airbnb as a direct/indirect competitor
*Airbnb as a benefit/threat to the destination
*Airbnb’s positive/negative impacts and
*Airbnb- major concerns.
Brown-Williams said the last theme examined solutions for proper management of Airbnb in T&T.
She said the findings which were presented at the Fourth Caribbean-International Tourism Conference in Barbados revealed that the traditional accommodation sector did not blame Airbnb for a decline in business but rather identified inadequate destination marketing and poor inter-island transportation.
Brown-Williams added that common trends in the data revealed that both the traditional accommodation sector and public tourism officials were concerned over potential safety and security issues with Airbnb properties, the absence of a taxation structure, the lack of regulation and enforcement of standards and non-conformity to local business registration requirements.
One interviewee said, “As a resident have to pay tax for my home…it’s just like having a mortgage and the person next to you is squatting-that is what Airbnb to a formal hotel is…the person next door do as they please and I am bounded by every financial requirement or legislative requirement and you are living free. Is that fair…?”
Brown-Williams added there was recognition however, of Airbnb as beneficial to T&T providing economic gains for locals; providing additional options that can meet the needs of a particular type of traveller and enhancing the overall affordability of the destination.
Price was a major point of contention for most of the accommodation providers interviewed with many lamenting that Airbnb rates were far lower than theirs placing them in a position where they are unable sustain their operations financially if they were to drive their prices down in the same way. Another interviewee noted, “The unregistered (Airbnb) properties have their rates very low; what they offer for US$29, I cannot price my guest house at that rate with everything in order; everybody wants cheap, they don’t care what they get.”