BRIDGETOWN, Barbados, Friday September 30, 2016 – Hoteliers and government tourism officials have struggled all year to pinpoint the anomaly behind the Caribbean’s strong visitor arrivals and the recent, pronounced slide in resort occupancy and rates. While sources have suggested causes as disparate as the Zika virus, most agree one phenomenon has significantly impacted Caribbean hotel and resort occupancy: the sharing economy.
Sharing and home-stay accommodation providers, highlighted by Airbnb but also including companies like HomeStay and Couchsurfing.com, have exploded in recent years and the blast’s effects are being felt across the Caribbean. Destinations known for some of the world’s most popular resorts, including Barbados, Jamaica and the Dominican Republic, are now also filled with home-sharing providers.
“It’s pervasive throughout the entire industry,” said Frank Comito, CEO and director general of the Caribbean Hotel & Tourism Association (CHTA), during a panel discussion at the recent Caribbean Tourism Organization (CTO) conference in Barbados earlier this month.
“Aruba officials told me this sector is representing as much as 30 percent of their visitor arrivals this year,” Comito said. “Barbados is right up there with over 2,000 host properties listings with Airbnb. There are 10,000 listings in Cuba.”
Comito said CHTA data indicates 24 Caribbean destinations offer Airbnb listings, with the Dominican Republic, Jamaica, Sint Maarten the U.S. Virgin Islands all reporting more than 1,000 listings. Another five islands (Anguilla, Aruba, the Bahamas, the British Virgin Islands and Puerto Rico) all offer more than 500 listings. “So we can’t ignore it,” Comito said.
“The Caribbean is an important and growing market for Airbnb,” said Shawn Sullivan, Airbnb’s director of public policy for Central America and the Caribbean, who confirmed the region is a company target.
“We see significant growth potential in key markets including Barbados, Aruba, Cuba and the Dominican Republic,” continued Sullivan. “Our travelers are more focused on the experience, they want to ‘live like a local’ and ‘belong anywhere,’ which makes the Caribbean an ideal Airbnb destination.”
Comito said CHTA officials have met this year with Airbnb leaders to discuss their business model. “Every jurisdiction in the world, particularly in the public sector, is grappling with how to engage, regulate and tax them as well,” he said.
In fact, Comito said Caribbean hoteliers had progressed through a series of stages in the past few years, including “anger and denial” regarding the competition posed by home-sharing providers. While the hoteliers are undoubtedly threatened by these new rivals for traveler dollars, many add their objections are also focused on regulations and taxation to which home-sharing providers are largely not subject.
“We need to level the playing field,” said Comito. “We need to make sure we are addressing revenue and taxation issues and the opportunities that [home sharing] presents, particularly for our cash-strapped governments.”
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Sullivan said Airbnb is currently entering into voluntary collection agreements with tax authorities.
“We want to help governments understand what the sharing economy is and how they can benefit from it,” he said. “We also want to work with them to promote common sense laws and regulations.”
Sullivan admitted that Airbnb and other sharing economy providers have encountered difficulties when “technology kind of outstrips the ability of government to keep pace.”
“Our philosophy on taxes is that we want the people that use Airbnb to pay their fair share,” he said. “That’s something we want to do here in the Caribbean. We are always willing to engage government and stakeholders on this issue.”
Yet he added, “We also believe that heavy regulation on us or the traditional tourism sector isn’t helpful. We think the time is coming for a new model or category that takes into account the sharing economy.”
Beyond the taxation and regulatory issues is a battle for travelers. Sharing-economy analysts paint a picture of sharing-economy users as highly engaged and desirable frequent travelers.
“The level of usage of sharing economy services among travelers who are socially engaged is 2.5 times the average,” said Olivier Henry-Biabaud, chief executive at TCI Research, which tracks sharing economy data.
These travelers have the potential to spread economic activity across communities, said Henry-Biabaud. “You will find diving fans, more than average cultural explorers. You have people who are sensitive to the arts,” he said. “You have people exploring the destination at night and seeking nighttime entertainment.”
He said sharing economy users “are highly connected and when they get back home they share. They share a lot, more on average,” he said, chronicling their journeys on social media. “Thirty-four percent of them are actively sharing their travel experience even with people they don’t know, beyond friends and relatives,” he said. “They are really shaping [a] destination’s reputation.”
Henry-Biabaud said sharing economy providers’ most prevalent challenges come in the area of consistency. While his firm’s research shows travelers who use home-sharing services are more satisfied compared with those who stay in traditional hotel lodgings, they also have twice as many complaints compared with guests in traditional accommodations.
“It tends to say that peer-to-peer can be the best and the worst,” said Henry-Biabaud. “Quality consistency is a challenge for them.” Still, he said home-sharing is “not a trend, this is something that’s here to stay.”
Indeed, going forward Caribbean hoteliers will need to formulate strategies to engage what Henry-Biabaud calls “viral, highly socialized, brand-sensitive destination explorers who are not only money-savers anymore.” (Travelpulse.com)