Vacation rental tax welcomed by hotels

  • Level playing field: hotel industry gives approval to new levy

A 4.5 per cent charge on guests at Airbnb-style holiday rental properties will level the playing field for Bermuda’s hotel industry, the Bermuda Hotel Association said yesterday.

Vacation rental property owners said they did not oppose the new levy but asked the Bermuda Government to provide more information about how it would be administered.

Stephen Todd, Bermuda Hotel Association chief executive, said association members supported the tax, which would be help pay for the Bermuda Tourist Authority. Mr Todd said: “Our Bermuda Hotel Association members support the legislation in terms of having some structure and levelling of the playing field in terms of the payment of fees associated with marketing and our overall destination.”

He added that Airbnb-style holiday rental properties were now seen around the world as an alternative to hotels.

Mr Todd said: “We just believe that given the opportunity they have to enjoy the overall marketing of our destination by the Bermuda Tourism Authority, that it’s important that they have some form of regulatory structure in place to ensure that the standards of the facilities, as well as some form of payment structure, is in place.”

Mr Todd was speaking after MPs approved the Vacation Rentals Act in the House of Assembly on Friday.

He said the fee introduced by the legislation mirrored the Tourism Fee hotels collect from guests and pay to the BTA.

He added: “Prior to the legislation being proposed, there was no form of fee that was required to be paid on the part of vacation rental properties. This provides some additional revenue for the Government and tourism authority but it also ensures, we believe, that they do what I will only call their fair share for the overall marketing of the destination.”

Mr Todd said tighter regulation of the vacation rental market to ensure properties were up to scratch would also help avoid bad press for the island. He added poor reviews could spread like wildfire through social media and could hit the island’s image.

Mr Todd said: “I think it’s important that there is some level of oversight to ensure that minimum standards are being maintained.”

Two vacation rental owners said they were not against the new fee but wanted more information from Government.

Jenita Dyer, of Lemon and Ginger Vacation Rentals, said: “I am not opposed to it. Most places have taxes. I definitely don’t think it will be a deterrent. Most people are used to paying taxes elsewhere.”

But she added: “My concern is that it is managed in an appropriate way.”

Another vacation rental owner, who asked not to be named, added: “Provided that it is clear as to what our duties are in transmitting these taxes, I can’t say that I am against it in principle.”

The man said he did not see why vacation rentals should be exempt from fees when hotels pay taxes. He added: “I think it is probably fair enough.”

But he said wanted to see some benefit for owners, like a listing of rental properties on the BTA’s website.