By NATARIO McKENZIE
Tribune Business Reporter
A prominent realtor yesterday urged the Government to better regulate the growing Airbnb online tourist rental market to prevent the loss of tax revenues, while also ensuring Bahamians better access entrepreneurial opportunities.
Mario Carey, president and chief executive at Better Homes & Gardens MCR Bahamas, told Tribune Business that the local Airbnb market should be regulated “in a favourable way”.
He explained: “Airbnb is going to shift the tourist experience in the Bahamas; in fact, it’s already doing it. Many people are not into the hotel experience any more. A lot of people want to experience the islands; they want to stay in a house and have a cultural experience, and not have to pay for every single meal.
“The Airbnb model is very good for our business, and I think that the Government needs to get a handle on that because they are missing a lot of revenue. They know that hotel revenue is down because the owners of Airbnb aren’t paying room tax, and there is no reason why they should not be able to collect that.
“There has to be a system whereby those persons renting out their homes are paying room tax to the Government,” Mr Carey emphasised.
“The Airbnb business in Harbour Island is explosive. It has always been. There needs to be an understanding of the market, and incentives set to balance the investor’s ability to buy and the Government’s ability to receive revenue.”
While the 10 per cent room/occupancy tax was eliminated at end-2014, the Government is likely to be losing out on other revenue streams as a result of Airbnb’s growth, especially the 7.5 per cent Value-Added Tax (VAT) that replaced it.
Airbnb is an online marketplace and network that enabled homeowners to list/rent short-term stays in their residential properties, with the cost set by the property owner.
Mr Carey said that while banks are not lending based on Airbnb models yet, he is in talks with at least one commercial institution on this.
“If a property has a stream of income by Airbnb, you need to look at that and lend against that income stream,” said Mr Carey, adding that his company has handled home rentals as high as $25,000 per day.
Edell Farquharson, a real estate agent and owner of Briland Soul, told Tribune Business: “I know for a fact that the country is losing revenue when we are not regulating these particular markets.
“If we have an investor come here and purchase a home, and they are renting it out through a company abroad, all of those funds are exiting the country.
“I think it is a great opportunities for Bahamians to really make some money in real estate. We tend to purchase a house and just want to live in it, rather than think outside the box about how to make it an income-generating property. I think Airbnb and things of that nature should be more regulated, and so should property management in this country.”