Tourism, music and the digital disruptors
Some in the industry oppose the platform, but not SA Tourism
● The Guga Sthebe building in Langa, Cape Town, is painted in bright colours and patterns, an eye-catching breather from the muted tones that dominate the township.
That venue — used as an arts and culture centre — played host last month to Airbnb’s two-day Africa Travel Summit, which was attended by various players in the travel and tourism sector.
Why host the summit in Langa? Because, as the company’s head of global policy and public affairs Chris Lehane said, it characterised Airbnb’s aim to push so-called “inclusive tourism”. And Cape Town is the most popular South African destination on Airbnb.
During the summit, the peer-to-peer accommodation company released a glowing report titled “Airbnb in SA: The Positive Impact of Healthy Tourism”.
Millions of rands flowing in
Some of the key findings of the report, based on independent analysis by local consultancy Genesis Analytics, were that since Airbnb was founded in 2008, people across Africa have earned more than $400m (about R5.8bn) from hosting guests through the platform, with hosts in SA having earned $260m.
The report also states that two million guests arrived through Airbnb listings over that period.
The report says that between June 2017 and May 2018, “host and guest activity … generated an estimated R8.7bn in economic impact” in SA.
It says “a significant majority — 65% — of hosts on Airbnb in SA are women, and hosts across the country are using their extra income from hosting to make ends meet and otherwise afford to stay in their homes”.
If you looked only at the report, you might not realise that Airbnb has met fierce opposition from various stakeholders in tourism and hospitality across the world.
Japan, for instance, recently barred hosts from renting out their properties for more than 180 days a year.
In SA, there have been calls for the service to be regulated, most prominently from the Tourism Business Council of SA.
Wary of change
Lehane comments: “When electricity was first introduced in New York in the 1880s, there was real opposition. People thought that light was gonna make the city less safe … Then the folks who controlled the gas lamp industry passed laws to actually ban electricity. And it took about 20 years for people to adopt [electricity].
“From today’s perspective, that seems a little crazy, but at the time everyone had to
You’re intersecting with governments, which tend to look at old solutions Chris Lehane
Head of global policy, Airbnb
figure it out. Any time you have these ‘new things’, by definition you’re intersecting with governments, which tend to look at old solutions for a new thing. You have industry opposition, because they’re looking at it from a competitive perspective.”
But in SA, the San Francisco giant is still operating freely, something that could change soon.
The company began engaging with the government two years ago. Those talks have been interrupted by personnel changes on the South African side, but Lehane said Airbnb had started again to “establish those relationships”.
Co-operation is a no-brainer
These include close ties with SA Tourism, which partnered with the company for the travel summit.
The CEO of SA Tourism, Sisa Ntshona, said: “It would definitely be to our disadvantage if we [didn’t] play or collaborate with the world’s largest accommodation platform.”
He said SA Tourism also wanted inclusive tourism. “Meaning how do we include in the value chain the small, emerging, typically invisible players? By partnering with Airbnb we give access to a small player in the rural Eastern Cape or KwaZulu-Natal to be visible to a tourist from Japan who is looking for a home-stay experience in SA.”
Home, or business?
Ntshona said rather than regulation, the focus should be on “standardisation”: “The key thing is making sure that Airbnb plays on the same competitive terms as other established organisations.
“For example, if I have a home that is listed on Airbnb, it moves from being a home, but now becomes a business. So the rates and taxes that I pay cannot be residential but become commercial.”
Likewise, if a housekeeper is employed by a family who convert their home into Airbnb accommodation, the employee is now working in the hospitality industry.
“Therefore we’ve got to make sure that the wages [and] the terms of employment are also consummate with what’s happening in the hospitality industry … We’re really looking at levelling the playing field so there’s no exploitation of people, places or even rates and taxes.”
When it comes to the labour market, the Airbnb report stated that the platform supports more than 22,000 jobs “across the broader South African economy”.
According to a 2016 department of labour report on the hospitality industry, the travel and tourism sector directly employed about 679,500 people in 2014.
That number increased in 2016 to 686,596 jobs (or 4.4% of total employment), according to Stats SA’s 2014–2016 Tourism Satellite Account (TSA) report, released in March this year.
Regarding employment numbers, the TSA report said “SA does not have a direct measure of tourism employment”. This makes it difficult to establish more precisely Airbnb’s impact on SA’s labour market.
Stats SA’s 2016 tourist accommodation report (released last year) looked at the yearon-year growth of different types of accommodation. The fastest-growing was “other” (under which Airbnb would fall), which in December 2015 experienced growth of 31.6% from November 2015, compared with the hotel sector (in second place), which had growth of 13.2% over the same period.
Aside from often being cheaper than hotels, an advantage that Airbnb has over its competition are the “experiences”, in which your host is also essentially your tour guide.
Ntshona believes that it would benefit traditional accommodation providers to evolve their business model to compete effectively.
“Disruption is good. Those traditional businesses need to evolve in order to make themselves relevant to the needs of the modern-day customer. There’s no way that a hotel can continue to service in the same model as it did 100 years ago.”
Has there been resistance within the hospitality and tourism sectors to SA Tourism’s embrace of Airbnb?
Absolutely, Ntshona said. “It’s about choice. We should in no way box people in and say, ‘You will do the following.’ We should also in no way box businesses to say, ‘You will look like this.’ Choices are driven by consumer needs, and as long as we have a big enough spread of choices we can be competitive and a destination for tourism.”
Cape Town’s Atlantic seaboard is the most popular destination in SA for Airbnb visitors.