Airbnb boom in South Africa – with big changes coming
The City of Cape Town’s Airbnb sector is soaring, sporting more listings than the cities of Sydney and San Francisco combined – sparking debate over its impact on housing affordability, tourism benefits and incomes.
Data from Inside Airbnb, a collaborative data effort that reports on the expansion of Airbnb globally, there are 23,564 active listings in the Mother City.
Of this, 19,280 (81.8%) are entire home/apartment listings, 4,062 (17.2%) are private rooms, 79 (0.3%) are shared rooms and 143 are hotel rooms (0.6%).
This surpasses the number sported across numerous popular tourist destinations like San Francisco (7,888), Amsterdam (9,310), Athens (13,274), Berlin (13,759), Sydney (15,548), Tokyo (16,518) and Barcelona (18,925).
However, it still pales in comparison to the mother of all Airbnb cities, Paris, which sports a massive 95,885 listings.
Broadly, Airbnb is an online platform connecting people seeking short-term accommodations with hosts offering rental options, from single rooms to entire homes.
According to its website, it has gone from having two hosts welcoming three guests into their San Francisco home in 2007 to over 5 million hosts who have welcomed over 1.5 billion guest arrivals in almost every country across the globe.
It currently sports a market cap of R1.597 trillion ($86.38 billion).
Airbnb listings have surged for various reasons, with experts citing increased demand for flexible travel options, higher interest in unique and remote accommodations, and hosts and investors capitalising on the growing short-term rental market for a source of income.
‘Airbnb’fication of Cape Town‘
While the major arguments for the influx of property listings have been the benefits it holds for the city’s tourism sector and host income, there have been concerns about its impact on the local housing market.
“We have a huge housing shortage in South Africa – pair that with affordability issues, and one has to question the sustainability of this residential rental model in South Africa,” said commercial property broker Ash Müller.
The Sunday Times reported that the listings boom in Cape Town is drawing flak from residents who say that they are being priced out of their own city.
There are various cities where the rise of Airbnb has triggered protracted regulation as a result of public pushback.
An example is Barcelona, where communities protested the rise of short-term rentals like Airbnb, arguing that their surge has pushed out local businesses essential for residents, replacing them with tourist-focused services and increasing living costs.
As a result, the Mayor of Barcelona, Jaume Collboni, recently announced that short-term rentals (such as Airbnb) will be banned from the end of 2028 to tackle what he described as “Barcelona’s biggest problem”, the housing crisis.
Collboni said that short-term rentals made it difficult for residents and workers to afford to live in the city. The plan is to convert 10,000 apartments presently offered as short-term rentals on platforms like Airbnb back into the long-term housing market.
Moves for regulation in South Africa
While some are calling for similar moves, others have questioned its viability.
“If a similar ban were to be implemented in Cape Town – I do not want to know what its property developers would do – short-term rental apartments are a huge selling point in many of Cape Town’s city developments,” said Müller.
Additionally, the commercial property broker said that investors often buy short-term rental properties, acquiring multiple apartments not for personal use but to earn rental income as an investment strategy.
“All of the above being said, I still believe that one of South Africa’s strongest selling points is and will continue to be tourism. There is certainly a place for short-term rentals in Cape Town – especially as we become more of a hotspot travel destination, added Müller.
In South Africa, the Department of Tourism has started processes to develop regulations for the short-term rental industry.
The Tourism White Paper, now out for public comment, proposes implementing a differentiated regulatory system and a framework for improved reporting on short-term rentals.
Among the proposals under consideration is to give the Minister of Tourism the power to determine certain thresholds for Airbnb locations in South Africa, including limits on how many nights a customer can book at one location.
“Once we have incorporated all the comments, I will take the matter to cabinet for consideration,” Minister Patricia De Lille told the Sunday Times.
Once vocal critics of Airbnb, the Federated Hospitality Association of South Africa (FEDHASA), has cooled its calls for urgent regulation of short-term rental platforms.
Commenting on the White Paper at the tail-end of 2023, FEDHASA said that “as these platforms are now a substantial part of the tourism sector, we support a balanced approach that protects consumers while encouraging entrepreneurship.”
“However, we request a discussion on reasonable regulation aligned with international best practices,” said FEDHASA.
“[Airbnb] actually believe regulation, if it’s simple, if it’s appropriate, and if it’s proportionate, can be a really good thing,” Middle East and Africa regional lead Velma Corcoran previously told MyBroadband.
However, she warned against hastily forming regulations without comprehending the specific issues at hand, noting that there is no current evidence of South Africa facing issues like housing crises or over-tourism, which have prompted regulations in other countries.
In September 2023, Airbnb signed a memorandum of understanding with the Department of Tourism to collaborate on a national registration system.
This aims to provide transparency into the short-term rental market and obtain the data needed to develop appropriate regulations.
Loading ...
