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HRAB files complaint against Airbnb

Many go to the Internet these days for special offers while booking holiday accommodation. However, more often than not, what’s on the offer turn out to be less than satisfactory.

Airbnb is a social site where property owners can list their spare rooms, apartments or homes in any part of the world that are affordable. Guests can leave reviews of accommodations and the services for the future guests. And, likewise, hosts too can leave reviews of their guests.

Payment is made to Airbnb, which then forwards the money to the host after the arrival of the guest.

Bhutanese hotel industry witnessed a boom of a sort that went bust with government stopping the loan for new hotel constructions. As a result, hotels are now competing for business on Airbnb. But it does not come without problems and challenges.

The Hotel and Restaurant Association of Bhutan (HRAB) recently wrote to the Department of Cottage and Small Industries (DCSI), Tourism Council of Bhutan, and Bhutan Agriculture and Food Regulatory Authority (BAFRA) about the challenges facing the industry related to business with Airbnb.

It said that residential properties such as bungalows and apartments meant for tourists were rented out as home stays, guesthouses, and serviced apartments across the country, especially in Thimphu and Paro. “The hotels are already struggling with low rate of occupancy. Most of the accommodations are listed on an online travel booking site – Airbnb.”

Further to this, it said hotels were licensed, paid taxes and functioned under certain standards and guidelines. “Hotel industry is currently employing a large number of youths, however the legal status of Airbnb is questionable because most of them are not licensed and are not allowed to accommodate tourists.”

Executive director of HRAB, Sangeeta Rana, said that as per the Airbnb’s feedback, tourists staying in these properties were mostly fed home-cooked foods of questionable safety and hygiene standards. “We submitted a copy to BAFRA and we are waiting for their response.”

According to the statement, the government encouraged home stays and guesthouses in remote places to accommodate tourists or visitors and to provide income generation for the communities. However, accommodations registered with Airbnb were mostly city centric which could have implications on the hotel industry. “Such business could shut down the hotels because the hotels cannot compete with the online business. The accommodations cost less due to the minimal investment, non-existent operational costs and service standards.”

Serviced apartments are usually for expatriates who demand long-term accommodation and a certain percentage from the rent ought to be reflected as Personal Income Tax. According to the statement, serviced apartments cannot be rented out on short-term basis because short-term accommodations were for hotel business. However, tourists are lodged in these accommodations through Airbnb which has drastically reduced the occupancy of the hotels.

It stated that the online businesses gave rise to rent hike for the local residents, leading to housing shortage; “Encouraging this type of business would lead to dire consequences, not only to the hotel industry, but also to the country as a whole.”

HRAB had submitted a letter to Department of Cottage and Small Industries (DCSI) on February 11. The department said it is not the competent authority to comment because it approves only projects listed in the medium and large-scale category.

Sangeeta Rana said that the association received positive response from TCB and would be meeting all the concerned authority sooner.

Currently, 266 homes are registered with Airbnb. Thimphu has the maximum (154), followed by Paro (61), Wangdue and Punakha (20), Phuntsholing (13), Bumthang (7), Dagana (3), and Trongsa (1).

The accommodation cost per night ranges from Nu 1,044 to Nu 69,620 depending on the facilities. Guests who avail  Airbnb services are mostly regional tourist.

Phub Dem

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