Page 32 - bon-dia-aruba-20200527

a32 local
Wednesday 27 May 2020
Vacation home rentals (VHR): A resilient industry in times of crises

$3.9 billion to acquire VRBO
and Homeaway for noth-
ing.

In keeping with Aruba’s vi-
sion to attract more afflu-
ent tourists to sustain eco-
nomic growth, vacation
homes provide visitors an
alternative to traditional
lodging offered in tourism-
based economies. It is a cli-
ent looking for family vaca-
By Alberto Perret Gentil, tion, a more “homey” and
Pering Group/BlueAruba tranquil environment away
Rentals from the lines and crowds
of the big hotels and want
ORANJESTAD — The resil- to experience the island’s
ience and importance of culture. The literature on
condominium projects for vacation homes suggests and Tourism Association control room tax evasion. leave no margin for inter-
the economy is confirmed that tourism is the catalyst (AHATA) and others over For example, the town of pretation. Vacation rentals
in these times of crisis. Dif- that drives the second- equity and fairness with Breckenridge, Colorado regulations were incorpo-
ferent from hotels, condo- home market. existing lodging establish- with a vacation rental mar- rated at the last minute in
miniums never closed as ments and VHRs, and do ket the size of Aruba, has the law designed mainly to
they always have own- It also becomes important believe this industry should a 99% compliance rate in regulate all-inclusive hotels.
ers, long term renters and to understand if the tourists be regulated (not over part due to a dedicated To clarify my point:
guests staying in their prop- who rent homes/condos regulated) and all players two person’s enforcement
erties. In general, there would come to Aruba as should abide by the law group. With a smaller VHR - Need of a level playing
were very few layoffs, if a tourist if vacation rental and pay the room tax and pool vis a vis big cities and field for hotels, VHRs, and
any. market did not exist. Most environmental dues. Un- local knowledge by those timeshares. Timeshares
likely they will go some- fortunately, that is not the tracking listings-photos, should also pay room tax
It is definitely a resilient in- where else. case and most vacation properties are often easy only when renting to tran-
dustry as is also the case for rentals are not paying ei- to recognize. sient guests. As a matter
timeshares. Owners and re- Hundreds of Aruban fami- ther of the taxes. of fact timeshares are a
peat guests will be among lies supplement their in- Some ideas big player in the VHR busi-
the first ones to return to come/mortgage hosting Enforcement is the weak 1. Improve enforce- ness but with a 9.5% price
Aruba while hotels and oth- guest in their 2nd home or link. Servicio di Impuesto ment by Servicio di Impues- advantage! By the way,
er accommodations are annex. VHRs tourism reve- (SIA) shall enforce the de- to (SIA). They should focus easy to collect, because
still closed. Our island has nues have the benefit that cree enacted in July 2018. first on the big players (real- the players are Marriott,
been through challenges trickle down to Arubans Besides the lost revenue for tors/condos) and accom- Costa Linda, Playa Linda,
before, and with the help and not only stay in a few the GOA, this creates an modations on hosting sites. Divi, etc.; companies that
of the condo-hotels, time- (foreign) hands, and can unleveled playing field with - Airbnb is already without a doubt will comply
shares and vacation home help many survive these an additional negative collecting the room tax with the law.
rentals, Aruba will get its challenging times. No need consequence in that the on Amsterdam's vacation
economy back much fast- for any additional immigra- companies complying with rentals as well as many - Shall include responsibili-
er. tion either. the law lose clients to the other cities throughout the ties/norms for OTAs to oper-
ones not paying because world. Minister Bermudez ate in the Aruba market.
A recent poll by Magna The VHR industry must have of the price disadvantage and Aruba Tourism Author- - Co-responsibility for pay-
Global in the US suggested a level playing field and and thus creates a big in- ity (A.T.A.) were working to ing taxes not only for the
that after travel restrictions everyone shall pay its room centive not to pay the tour- reach a similar agreement owner of the property as in
are lifted tourists prefer and taxes or be denied the pos- ism taxes. with Airbnb for Aruba some current law, but also for the
feel safer staying in the pri- sibility to rent out. Just in 5 years ago, but it never rental manager if collect-
vacy of a vacation home room taxes vacation rent- The good news is that the materialized. ing rental revenues.
than in a hotel. als could generate close to solution is not complicated; - Monitoring the big - Establish minimum stan-
AWG 20 million to the GOA. and based on comparable online travel agents (OTAs) dards for obtaining a lodg-
A few facts tourist destinations, it only in the VHR market (Airbnb, ing permit.
The vacation rental industry We share the concerns ex- needs two/three capa- VRBO, Bookings.com, Ex-
is a US$ 140 plus billion mar- pressed by the Aruba Hotel ble persons appointed to pedia, etc.) in addition to Decisions on regulation
ket growing worldwide at controlling the big players shall not be based on a
an accelerated pace with in Aruba, you would have particular sector’s interest,
the likes of Airbnb, VRBO over 80% of the vacation but just on its contribution
and Bookings.com. Vaca- rental room tax collection to the larger economy and
tion Rentals caters mainly problem solved. well-being of ALL tourism
to millennials and families - Have hosting sites stakeholders and that of
which will contribute to re- display lodging permit the Aruban people. More
juvenate Aruba’s mature number on their hosting so in these dire times.
product. Given its huge sites for easier monitoring
potential, hotel brands like by SIA (mandatory). If well managed, in just a
Marriott (Home & Villas by few years the VHR indus-
Marriott), Wyndham and try could contribute more
Accor are entering the 2. Enact new law for revenue to Aruba than the
market. Expedia didn’t pay vacation rentals and thus cruise industry. q