Airbnb, The Tourism Elephant in the Room

Event Africa Contributor 21/05/2019 Industry News
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Written by Solly Moeng

This article was first featured in Africa’s Travel Indaba Daily Paper – Day 3

How do economies that have been long established, with all the policies, laws, by-laws, rules and regulations in place, all largely accepted and followed by key role players, suddenly deal with new market entrants that do not seem to fit into any of the existing industry arrangements? And what if such new entrants have something positive to contribute to the economy, even though by doing so they stand to take some of the market share from established players and put into question established ways of doing business? Should such new arrivals be rejected outright because they’re misfits to the economy as it currently functions and that their ways make established players uncomfortable? What if the demand side of the economy accepts and embraces the new entrant with enthusiasm and that such enthusiasm gives even more grey hair to established industry players?

And what if such a new entrant is called Airbnb?

Frankly, it is hard to resist comparing the reaction that Airbnb has and continues to receive in the local tourism industry to the reaction given to Uber by established meter taxi drivers in South Africa and other parts of the world. While fancy business presentations around the world always include a richly coloured slide replete with impressive graphics and a title like “The need to integrate new Technologies” or, increasingly, “Integrating the Fourth Industrial Revolution”, few people seem prepared to deal with such integration when the need for it comes knocking at their door. Going by many of the reactions one has seen from established industry players so far, new technologies are fine, but only as long as they enhance their business as it currently functions. The word “disruptor”, even “positive disruptor” continues to struggle gaining ready acceptance.

But there is hope

It is encouraging, however, that despite the initial industry confusion, shock, fear, and frustration, a semblance of order seems to be on the horizon; but these are still early days. At one pole is government, which is preparing to launch a basket of amendments to the existing Tourism Act aimed to bring about some streamlining of how things are done. At another pole is Airbnb, which has organically established itself in the local market and has gained widespread acceptance by small hospitality industry entrants and travellers. In the middle of all this are established industry organisations such as the Federated Hospitality Association of South Africa (FEDHASA) and the Tourism Business Council of South Africa (TBCSA), which represent their members’ interests and would like to see a level playing field established or, depending on how one looks at it, confirmed.

The provincial government of the Western Cape, arguably the most successful tourism province in the country, has already announced that it will oppose any plans by the national government to regulate short-term home rentals such as those on Airbnb. A Friday morning Business Day article stated that home owners using Airbnb generated close to R5bn for the Western Cape economy in 2017 alone.

Watched from a far distance, the knives seem drawn, but this is normal in early stages of this type of discussion. A healthy consensus will be reached, hopefully sooner rather than later, that will end with all players walking away with something and both the traveller and the industry also benefiting. There cannot be room for “winner takes all” if everyone understands the need to avoid unnecessary messages being sent out about the South African tourism industry. Airbnb is the positive disruptor today; there will be others in the future.