Mrs. Sharon Flax-Brutus Director of the BVI Tourist Board stated that a submission was made through the Premier’s Office to the Ministry of Finance to work with popular accommodation booking platform Airbnb to collect revenue for properties booked in the Territory. The Tourist Board Director estimates that the Territory is losing thousands of dollars to Airbnb bookings.
Airbnb is an online marketplace and homestay network that enables people to list or rent short-term lodging in residential properties, with the cost of such accommodation set by the property owner; and Mrs. Flax-Brutus stated that accommodation tax revenue is not collected from such bookings.
However, the Tourist Board Director told the Standing Finance Committee that there are discussions with Airbnb to share data, work together and finalise an agreement in this regard. The Tourist Board Director stated that based on the information provided there was recorded revenue of approximately $850,000 and if the accommodation tax was collected it would benefit the BVI in the region of $100,000.
Revenue Loss Might Be Greater
Last year while debating the Cruise Permit (Amendment) Act in the House of Assembly on 29 May Junior Minister of Trade and Investment, Hon Marlon Penn stated that boats were also selling rooms on Airbnb.
In bringing the matter to the House attention Hon. Penn said: “I was scrolling through Airbnb. I said ‘let me look up the BVI,’ and here I see boats being advertised as rooms…in my very community of Hodges Creek close to my border constituency, I am sitting here looking at it right now. There is no mention of cruising permits; there is no mention of accommodation tax; there is no mention of none of these things. So they are using these things to circumvent the tax regime…”
The Junior Trade Minister said that he is concerned that some of these boat owners that are offering their vessel for accommodation via the site don’t have the business licenses to venture into this line of trade. He noted that these vessel owners don’t pay BVI accommodation tax and don’t have trade licenses.
What’s worst, Hon. Penn stated is that these vessel owners are competing directly with villas operating legitimately: “They are competing with our villas in the market – avoiding paying accommodation tax, charging really hefty per night rates; some as high as $800 per night. All of these things are happening very much in plain sight.”
The Legislator who is also the Eighth District representative called on his colleagues to look into the Airbnb boating accommodation practice: “It’s wrong and we need to really secure and ensure that those things are addressed…”
In suggesting how the matter might be addressed Hon. Penn said: “We need to really look at not just the fee structure, but the support that we need to give to Customs and other agencies as far as regulation. We need to have the mechanisms in place to sort of police this activity that is happening right underneath our noses…”
Further the Junior Minister repeated a call he made earlier in his legislative career for cyber patrolling. This is becoming necessary since it is noted that a great number of the contraventions are internet based these days: “I came into this House some time ago when we did the Cybercrime Bill, and I mentioned that we need cyber soldiers. Everybody laughed. But it’s a serious issue. A lot of the things that are happening now are happening on the internet – happening on the web.”
Premier and BVICCHA Sought Middle Ground
Last year Chairman of the BVI Chamber of Commerce and Hotel Association (BVICCHA), Louis Potter called for more cooperation between Airbnb and the local accommodation sector.
Both Mr. Potter and Premier Smith spoke with The Island Sun newspaper about the subject of the Airbnb phenomena in the Caribbean and the BVI in an interview. During that interview both the Premier and the BVICCHA Chairman agreed that more information on the Airbnb operation and possible partnership is needed.
Mr. Potter said: “We need to understand specifically how it impacts the business space. Whether or not they (AIRBNB) will be carrying their fair share of things like taxes. You know the regular hotels must contribute to the BVI development and if they are going to come in we want to understand how they are going to interface and continue towards the development of the country; and what we should be doing to make sure that the BVI get a fair deal from that process,” the BVICCHA Chairman said.
“It is about educating us and taking what measures we can take to make sure that BVI businesses are protected and BVI get its fair share. We will be willing to explore whether or not it is in our best interest, and I believe it would be in our best interest; because it is always good to have an arrangement as opposed to having something loose out there,” he explained.
Further the BVICCHA Chair said that he believes that the Territory will be willing to work with Airbnb to ensure that they comply with the rules of the BVI.
He also noted that the Chamber is aware that Airbnb has been operating in the Territory. However, he said that the BVICCHA has not received a large volume of objections: “I understand that there is a fair volume of Airbnb business going on and I’ve heard conversations from some persons I wouldn’t say it is a very loud scream but I’ve heard complaints.”
In our interview on 29 April Premier Smith softened his tone on the Airbnb matter and said that the company provides a promotional service: “I think it is an opportunity to promote our businesses, and that is what they (Airbnb) are doing.”
In fact, Hon. Smith said that from a government standpoint the issue is how to deal with the businesses who deal with Airbnb in terms of their responsibility to Government is the main reason to be discussed.
Other Caribbean countries fixing Airbnb problem
A Virgin Islands villa rental operator believes that it should not be difficult to identify those who use AirBnB to attract visitors to the BVI and warn them about their irregularities and evasion of taxes.
Just a few days ago Barbados Entrepreneurship and Tourism Association (BETA) stated on its website that its initial focus is to have Barbados “be the first island to launch Airbnb ‘Trips’ – cultural experiences and immersions created by ordinary Barbadians”. The statement came on the heels of a ten per cent tax on the homestay accommodation sector approved by the new government.
A blogger commented: “As long as the property is advertised (on AirBnB or on any listing) it will be identifiable as a property that should be lawfully registered. Failure to rent without registration should make its owners (many of whom are foreign) liable to stiff penalties.”
Last year Former Bahamas Minister of Tourism Vincent Vanderpool-Wallace sided with people who feel that providers of visitor accommodation in Barbados through agencies such as Airbnb should be taxed: “When the government is going to be bringing in additional airlift to the destination and have to guarantee that airlift, the people who are benefiting from that airlift ought to be contributing to that airlift and one of the ways to do that is through the payment of taxes,” he told NationNews.