By NATARIO McKENZIE
Tribune Business Reporter
The Government was yesterday urged not to stifle the vacation rental sector through regulation, the Eleuthera Chamber of Commerce’s president branding it “a huge lifeline” for the Out Islands.
Thomas Sands, speaking with Tribune Business at the Eleuthera Business Outlook conference, said: “As we move to regulation of that segment, I think that we need to encourage its development at the same time, building it into a real industry and supporting it.
“It is a huge lifeline for these Family Islands. I think that there is a major opportunity there, and it is an easy model for the Bahamas to encourage.”
Mr Sands encouraged the Government to work with Bahamian stakeholders and property owners to develop innovative ways for creating Family Island growth and development.
Dionisio D’Aguilar, minister of tourism, in unveiling the Government’s Memorandum of Understanding (MoU) with Airbnb last month, pledged that legislation was being developed to address what he described as the “murky issues” affecting the vacation rental sector.
“The regulation will define the parameters of vacation home rentals,” he added. “It will set the standards and best practices to facilitate the sector in preserving the reputation of our destination brand. The new legislation will put in place a modern regulatory framework within which vacation home rentals can operate as an integral part of our tourism sector.”
The Airbnb MoU will see the vacation rental website assist the Government’s efforts to properly tax vacation properties on their rental income, although this will not involve the imposition of Value-Added Tax (VAT) due to difficulties in assessing whether landlords have crossed the $100,000 registration threshold.
While Mr D’Aguilar argued that “the great take away from this is not the tax” but the entrepreneurial opportunities for Bahamians, Mr Sands and others have warned that the rush to regulation could be misinterpreted by the sector, and deter potential new investment and participants.
AirBnB currently has 1,900 active listings from the Bahamas on its platform, and 1,200 active hosts. Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business recently that he would have preferred the Government to release a ‘complete package’ when it signed the MoU.
Mr Aubry, whose group recently contracted an economic study on the vacation rental market’s economic potential for the Bahamas, said: “We don’t understand what the long-term plan is.
“I do understand the need for regulation, and to maintain the quality of the current tourism industry, and I understand the need for taxation so we don’t bastardise the current tourism product.
“But I would like to see legislation as part of a wider strategy, as we don’t want to make anything prohibitive.... This is a perfect vehicle for Bahamian ownership of the tourism product, and I think we want to incentivise that, and drive more local products and manufactured products into the sector.”
Meanwhile, speaking on Eleuthera’s economy yesterday, Mr Sands said: “Eleuthera definitely has potential. There are a number of underlying new opportunities that I think are being identified and beginning to come to fruition.
“Last year was probably disappointing for many because there were things that did not work out.” He pointed to the proposed development of a resort and the region’s first Tiger Woods-designed golf course at Jack’s Bay, as well as expansion of the Cape Eleuthera resort, as positive signs for the south Eleuthera economy.