Airbnb regulations – the wait continues

While the time is near when large numbers of tourists are expected to visit the Overberg, the wait continues for the planned changes to governmental regulations around The Tourism Amendment Bill and short-term rentals.

It is interesting to note the extent to which Airbnb itself has become a financial force to be reckoned with in the South African accommodation sector, but the potential for it to be negatively impacted is still very real.

A survey conducted by Airbnb, based on host earnings and guest spending for 2018, showed that Airbnb’s estimated direct economic impact in South Africa was about R1.018 billion. A list of the top 30 countries by revenue shows that South Africa entered the list at No. 22, ahead of Denmark, Switzerland, Austria and Argentina, but way behind Australia, Portugal, Greece and Croatia.

The survey was the sum of host earnings, based on internal Airbnb data, and estimated guest spending. The guest spending figures were based on nearly 12 000 responses to a voluntary survey, says Velma Corcoran, Airbnb’s country manager for sub-Saharan Africa. According to her, the organisation is helping to spread tourism benefits to families, communities and local businesses.

“It’s never been easier to travel to, and stay in, South Africa’s smaller towns. Visitors are discovering local hospitality and hidden gems they might otherwise have missed, while supporting new economies and revenue streams that help make local communities stronger,” says Corcoran.

She adds that there has been a significant increase in host earnings on Airbnb in smaller towns. “Mossel Bay, for example, saw a year-on-year increase of more than 80%, and Saldanha Bay saw an increase of almost 60% over the same period. Host earnings in Garden Route towns such as Knysna, Plettenberg Bay and George increased by 48%, 58% and 74% respectively.”

The survey found 84% of hosts recommended restaurants and cafes to guests; 69% recommended cultural activities such as museums and festivals; and 51% said Airbnb had helped them afford their homes.

The downside is that with oversupply and disillusionment, a decline in the number of Airbnb property owners is predicted. Airbnb is on shaky ground in many parts of the world, and it could be a matter of time before the trend loses favour with South African property owners.

There is already an oversupply of these properties in the country, and many owners have been left disillusioned due to the complexities involved in managing this rental system. For these reasons, real estate professionals predicted a decline in the number of properties purchased for Airbnb rental purposes in South Africa this year.

Hermanus is a classic example of how the rise in short-term rentals has made it almost impossible for residents to find long-term rental properties at affordable prices, while in other countries with regulations already in place, contraventions of local by-laws are being tested on a daily basis. Even though there has recently been a slight shift in the number of long-term rental properties available in Hermanus, these are still at the high end of the rental market and not where the real need exists.

The consequence is that there is little rental stock available for permanent residents and long-term rentals rocket. Some permanent residents are forced to live in adjacent towns and travel to work in Hermanus on a daily basis

Some of the regulations in place internationally would be a huge deterrent for South African hosts if they were to be implemented. In Denmark, Danish tax officials and Airbnb have an agreement that will ensure that short-term rental income in Denmark will be automatically reported to the authorities.

In Paris, you can’t rent an apartment for more than 120 days a year but you must first register your apartment with the local authority, which would have immediate tax implications. In London, you can host for a maximum of 90 days in a year, after which listings will become automatically unavailable on the Airbnb site as part of an agreement between Airbnb and the UK officials. Amsterdam has a maximum 30-day limit that a property can be rented out for.

Portugal has implemented more rigorous legislation and since 1 July 2017, properties posted on Airbnb, Booking.Com and other platforms need to be enrolled in the national tourism register, and property owners must fill in a required field with the registration number of their accommodation. The platforms will be subject to sanctions if they market non-registered properties.

Whichever way you look at it, if the SA Government does its homework thoroughly, it could attempt to make life very difficult for short-term rental hosts and this is bound to have a resounding effect on the entire tourist accommodation industry, especially in towns that are primarily tourist destinations, reliant on this source of income to survive and prosper.

The seasons are a-changing – prepare for guests

Anyone involved in the short-term rental market will tell you that it has been one of the quietest periods in a long time, which has taken its toll on cash reserves and property maintenance. We still have to remain hopeful that the tide will turn and with that will come the tourists to revel in what the Overberg has to offer.

During these off-season quiet periods it is opportune to take a hard, critical look at the property you have listed on one of the holiday rental portals (e.g. AirbnbBooking.cometc.).

Even though the supply of available rentals increased dramatically as the noose tightened around cash-strapped owners, and the number of visitors dwindled, many of these properties are not in an appropriate condition to warrant positive guest reviews and repeat bookings. In a market where there is an oversupply of accommodation, it is even more critical that your preparedness for guests outshines that of the other hosts.

Rather than wait for the first seasonal bookings and then do “necessary” maintenance of the property, start earlier and plan for this before it is too late. One of the biggest issues ends up being the availability of contractors as we get closer to year-end, when everyone suddenly wakes up to the work that needs to be done and cannot get the right level of workmanship timeously.

I am constantly reminded of wise words from decades ago when I was told “the world waits for no-one” – and never will a contractor wait for you when you have last-minute requests at their busiest time of the year.

As a simple guideline, take a good look at the exterior of the property and ask yourself: Will the type of guests I want find this appealing? Remember that first impressions are lasting and if you want to leverage referrals or repeat bookings, then guests need to be impressed from the outset.

Don’t ignore the condition and cleanliness of window frames, gutters, outdoor areas, pathways, driveways and gardens, as these are often the first aspects people notice when scouting for rentals. A negative impression could impact on bookings at the outset, never mind post-vacation reviews. It may be a better idea to get honest opinions from other “unbiased” people who appreciate the standards that you would be expected to provide for your guests.

One of the top priorities is the cleanliness of accommodation. I am constantly amazed at how much grit and grime still remains in homes after a “professional spring clean”. One just needs to look at areas such as behind toilets, the tops of extractor units, fins on fans, door handles, skirting boards, tracks of sliding/stackable doors, behind blinds and curtains, and on staircases. Don’t forget those areas that attract spider webs and then, the worst of all – kitchen appliances that appear to be clean but have grime in hidden places and crockery and cutlery that have not been properly cleaned.

Next in line for the critics is the quality of the linen and towels supplied. Of course the “comfortable bed” is a no-brainer for a holiday, but if the linen has become worn and faded then the time to update has arrived. And where so many establishments feel the need to follow the “trendsetters” and provide everything linen-related in white, remember that it is the colour most difficult to keep clean. Try bringing in some tastefully-chosen linen and towels in colours that will enhance the impact of the accommodation and are likely to have a longer lifespan.

The death knell for many guests is the amount of tasteless clutter that some people insist on displaying in their holiday rentals. Whilst these are often hand-me-downs from family members (even if they do have loads of sentimental value to you, your guests have no connection to them), make sure that they add appeal to your property rather than deflect from the positive aspects.

Family photographs and religious icons are a no-no. Ensure that you do not leave drawers full of old and broken kitchen utensils and that what you do leave for guests is in proper working order.

The one thing a holiday maker does not want is the hassle of keeping the accommodation clean with old, broken or semi-functional items like brooms, mops and vacuum cleaners, so ensure that those are in an acceptable condition.

Whether you have seasonal bookings yet or not, be prepared at all times to avoid the nightmare of dashing to find cleaners and maintenance providers at what is always their busiest time.

Surviving retirement – re-invent yourself

As the cold of mid-winter grips our town and tourists disappear from the scene, it is a good time to reflect on the impact that seasonal trends have on what is a holiday and retirement destination for many.

Surviving RetirementWe constantly hear conversations about the economic state of the town, province and country, and the financial challenges many business owners and retirees are facing at this time, yet they fail to realise that they themselves are a potential solution to some of these challenges.

Retirees in particular may have a source of income at their fingertips, yet either fail to identify it, or are unsure how to take the first steps into the unknown. The one factor that has changed worldwide is that retirees may no longer be in their late 60s and beyond, and deemed by large sections of society to have reached their sell-by date.

The South African political scene over the past 25 years has had such an impact on the careers of the baby boomer generation  (between 55 and 75 years of age) that there are many ‘pensioners’ in their mid-fifties to mid-sixties who find themselves excluded from employment opportunities, yet are not financially placed to spend years in the unemployment wilderness. South Africans have never been the best ‘savers for a rainy day’ and only a small percentage of the population is financially secure on reaching the ‘official’ retirement age.

The key to taking the reins and changing the situation for oneself is to start a process of ‘re-invention’, a metamorphosis which many may resist or avoid, for fear of the unknown. Nevertheless, it could be the source of more than just additional income, but also one of new challenges, social interactions and an unexpected new spark in your life.

The place to start is to identify all the skills and talents you have that could open doors for you. These could range from creative to financial, even to culinary, or you may have a community orientation where your life or work experience could afford you the base from which to launch your new-found persona. You may have hidden talents which could become a source of income if nurtured, and could trigger a new kind of satisfaction and excitement in your life.

Begin by looking at hobbies that you are particularly skilled at, or ideas you have had an interest in exploring, but never pursued. Don’t ignore the career skills you may have developed and used over the decades, as they may still be of value to others. You just need to identify the need and get the message out. Create a platform either via social media or some other method of communication and let the world out there know what you are capable of.

Focus on those attributes which you may never have considered revenue-generating options but could, in fact, be just that. Avoid self-induced objections, like “so many others are doing that”, as you cannot be the judge of whether they are as good or as creative or as talented as you are. One thing to remember is that in a town like this, social media and, to a lesser extent, print media, are what drive everyday communication amongst residents and businesses, and, like it or not, they are as much a reality of life as is the cell phone.

I am constantly amused by how many people of an advanced age have resisted embracing technology, yet have taken to smart phones with such enthusiasm that they themselves (and their offspring) find it difficult to believe how adept they have become. Yes, it may take you out of your comfort zone for a while but that is often necessary, to clear the head and consider what a life shift could do for you. Any small change could be a form of re-invention and if you can adapt to the world of technology then you can surely adapt to a world where you use your hobbies, educational and creative talents to your own and others’ advantage.

To Retire does not mean To Expire. On the contrary, it may just be the impetus you need to usher in an exciting new phase of your life that could enhance everything, from your social and financial well-being, to your lifestyle and outlook on life. Take a good look at all your strengths and work them to your advantage.

Retirement: Are you ready to scale down?

The cycle of life becomes very interesting as one gets older and hindsight proves to be the “exact science” that people talk about when reflecting on the past. We spend so many years accumulating “stuff” as we build our careers, homes, families and assets – and then one day we reach that point where it’s time to scale down and simplify our lives in so many different ways.

Most of us have some kind of emotional and sentimental attachment to many of the items we have accumulated in our lifetimes, yet so often a large portion of those sit well hidden in the back of a cupboard, storeroom, in a loft or garage, doing nothing but gather dust and triggering the occasional memory when we stumble across one thing whilst looking for another.

We have observed so many fascinating and humorous conversations between spouses who are deciding on what to do with the accumulation of everything from clothing to ornaments, crockery and cutlery (especially all those sets that were inherited decades earlier and never used), children’s toys and mementos of days gone by that also remain hidden in boxes for some eventual awakening in the distant future.

The only problem is that you wake up one day and the distant future suddenly becomes your today. And when you decide that you no longer want the hassles, frustrations and unjustifiable expenses of living in larger homes and properties, which have become storage facilities filled with clutter and memories, you are then faced with the daunting challenge of deciding what to do with it all.

Most people do not fully appreciate the importance of understanding how to deal with this process, which can be anything from inspiring, enlightening and uplifting to the other end of the spectrum where trauma, emotional upheaval and panic kick in. The first question you need to ask yourself is: “Am I ready for this?”

You only need to watch one episode of any of the plethora of TV series that focus on the impact of hoarding to know that this is a very difficult set of circumstances to deal with, particularly when it coincides with that time in your life where you both want and need to remove extraneous items from your living space.

Hoarding is a distant relative of “collecting”, “stockpiling” or “accumulating”; yet the three words have very different meanings and connotations, some very positive and some very negative.

We recently observed a situation where a client was upbeat about the fact that they had reached that stage in their lives where they could start the scaling-down process and simplify their living conditions and responsibilities. All the plans were laid out, ideas were thrown around and decisions taken as to what would remain, what would be “archived” and what would either be sold or donated to charity.

The change was going to be very dramatic by anyone’s measure, yet the client was all for it. Within a very short space of time, however, the emotional impact was so overwhelming that they halted their plans in order to reconsider their initial decisions.

Having spent the past two years going through a few iterations of “scaling down” ourselves, we could fully appreciate the dynamics of the client’s experience. We reduced the amount of “everything” we possessed to reach a place in our lives where we had what we needed rather than what we wanted. The experience of minimising our living space and possessions has been beyond invigorating, somewhat like removing weight from your shoulders and being left with the sensation of having light wings with which you can fly.

But the key to this is that we were mentally ready for it, understood the implications and embraced the experience, whilst at the same time saying farewell to more accumulated “stuff” than we may have initially intended to. What is very important to realise in this process is that whilst you may be reducing the clutter factor, you will not be doing away with the memories related to those items – and that, in our opinion, is what matters most. It does become a “mind over matter” scenario and one clearly needs to be mentally and emotionally prepared for the upheaval.

We took a hard line on the decluttering process and for months we lived with the best advice anyone ever gave us: “If it hasn’t been seen, used, touched or thought of in the past year, it is time to remove it from your life”. Whilst this is still a difficult process, it proved to be the best decision we could have made and with each passing day we felt less encumbered and more relieved. All in all, it has been a stimulating experience which has set the scene for an uncluttered future.

A positive reputation helps grow a business

It takes no more than a few conversations across Hermanus to pick up on a business dynamic that does not bode well for the economic state in which we all find ourselves.

There is so much dissatisfaction between service providers and consumers that an inquisitive, analytical mind like mine has to look deeper into what the problem is, and what can be done to rectify the status quo.

At the outset, it is critical to state that – while we are all feeling the pinch in what is a protracted, economically-tight, and politically-tainted period – one would think all business people would be doing their utmost to win business and, in turn, provide a quality service that would be the basis of future referrals. One of the basic principles of good business is that you leverage previous successes to promote your business and capability. Yet, and this is a generalisation, the problem seems to start at the outset.

We, and many people we know, have been the recipients of numerous quotes from a range of service providers, who have been either recommended by people who had a positive experience, or whose marketing approach was so highly visible that they were asked to supply a quote. The most eye-opening dynamic from a business perspective is that, in almost all cases, quotes are provided and never followed up on, by the service provider.

There is almost no attempt to clarify the client’s actual need and, in doing so, getting closer to winning the business; no suggestions or recommendations, based on their experience to assist the potential client in their decision making; and very little sign that they are even interested in putting in an effort. In a market where there is a complete oversupply of certain services (landscapers, irrigation, building and renovation contractors, cleaning and laundry services – the list is endless), the least a consumer should expect is a pro-active, advisory approach. And this would secure the business against so much competition.

Yet it is these same service providers, who are constantly building the gripe ladder about how tough business is and that they are suffering for a whole lot of reasons that are text-book examples, and not necessarily applicable in a town with dynamics like ours. Business is tough for everyone here, with very few exceptions, so surely one should pull out all the stops to try and edge out the competition.

On the other side of the fence is the consumer who often takes the approach that the cheapest solution is the one to go for, and any differential in quality of product and service that a service provider could provide is not worth the paper those statements are written on. Recommendations are often requested on the likes of Facebook, and the inevitable statement follows: “Mustn’t cost an arm and a leg” or “Mustn’t break the bank”, yet the consumer has an expectation of a service and end-product quality that far exceeds the realms of reality, considering how few people want to pay for a service that, in some instances, is an expert service backed by plenty of knowledge and experience.

Make no mistake, there are some exceptional service providers here, with well-deserved track records as they provide a level of service that one is prepared to pay proportionately more for, to ensure the end result doesn’t require someone else to fix it. The number of instances of “re-work” that we have witnessed at both clients’ builds and our own, leaves one with a desire to find a punch bag to let loose on, just to find an outlet for the frustration of seeing basic business principles thrown out the window. I have often used the Afrikaans adage: “Goedkoop is duurkoop”, or its English derivative: “You get what you pay for”, and I have yet to see that proven wrong in the medium-to-long term.

Another aspect of service provision, which is a whole different conversation, is the impact of bad or slow service delivery, particularly in a multiple-project situation such as a new build or major renovation. Our recent experience in that regard is a clear message to all suppliers out there – if your piece of the operation is integral to other contractors meeting their deadlines, make sure you meet yours to ensure you are not left with a bad reputation among your customers and other contractors. While you cannot measure the impact of that, do not be surprised if business slacks off after a few bad hits at doing what you were contracted to, in the stated timeline.

So where does the happy medium lie? Do we all continue to moan and whinge on both sides of the fence about the tough business climate, bad service experience and costs involved, or do we find a way to go the extra mile and make a concerted effort to win business and reputation – and provide a quality end result to the consumer’s satisfaction?

Supervision – the home maintenance winner

The topic of home maintenance is one that brings a wave of nausea over most people when they face that moment where they must attend to necessary property repairs that generally get left too late.

More often than not, prior experiences have left a very bad taste and owners don’t see their way to having to deal with individuals or companies that constantly have to be summoned back on site to fix something that was not done properly, in the first place.

While key criteria, when selecting a service provider, are often met, so often the end result is not what is promised, expected or delivered. Some of these key criteria at the top of the list are, or at least should be:

  • Accuracy of quotes
  • Cost effectiveness
  • Supervision of labour
  • An efficient service
  • Project completion on time
  • Quality end result

How does one explain that, even when selecting a professional and reputable company, you can still end up having an experience that is anything but hassle-free? We hear people talk about ‘putting lipstick on the pig’ when trying to cover up a problem. Sadly, that is what often happens with home maintenance projects. Service providers frequently make all sorts of promises – yet, when it comes to the crunch, those are followed by a myriad of excuses as to why it took so long, why it went over budget and why the end result is not what you were promised.

It begs the question: “What is the fundamental problem?” Well, it is actually quite simple. It is called ‘lack of supervision’. Reality has proven that, while you can have qualified workmen on site, using the best products, lack of supervision is, more often than not, the culprit. From many personal experiences, I have seen that, when the right supervision is in place, a lot of potential issues do not even feature.

It’s all good and well for service providers to say that their workers can ‘manage themselves’ but not everyone does get it right the first time; and if no one is around to supervise and advise, that’s where thing start going wrong. One of the synonyms for the word ‘supervision’ is ‘guidance’, and that’s where the real problem lies. It’s one thing giving people a job to do but if they are not being supervised properly and given the training and/or guidance on site, then the project is already set up for failure. In so many different cases, be it building, electrical, plumbing, painting or landscaping, there is a common trend that results in client dissatisfaction.

The common trend is what I refer to as ‘drop and drive’. That is when workers are dropped off at site with the absolute minimum instruction and the ‘supervisor’, or in many cases the business owner, disappears to the next job. Seldom will this approach be effective, as more time is being spent going backwards and forwards to multiple sites or getting supplies – and the supervisory aspect just doesn’t happen. That is when the project already starts going pear shaped. And all too often I hear company owners, who are the culprits themselves, wondering why they don’t get repeat business or more recommendations. It’s not rocket science.

A recent example comes to mind where a client had a requirement for the lawn around a newly-installed swimming pool to be replaced and the levels sorted. The landscaper arrived on site with the team, dropped them off, gave a minute’s instruction and wasn’t seen for the rest of the day. While the workers did get on with it, they spent more time chatting to one another, and their mates on their cellphones, than actually doing the work. By observation, having been on site all day, they probably lost at least three hours of work time – and after that happens over a few days, one can easily understand why completion deadlines are missed. And the sad reality is that the business owner is generally not even aware of this, yet that still seems to be okay.

Having not been forewarned about the layout of cables and pool pipes, the workers were merrily yielding their picks and shovels. They hacked a huge hole in one of the pool’s inlet pipes, which caused another 12-hour delay as that had to be repaired before they could progress. The net result is time wasted and more problems created, which prevented other service providers from finishing their side of the project. The spiral of inefficiency triggers a chain reaction of non-delivery, as all follow-on projects on a site can easily get delayed by other service providers.

This is but one of hundreds of examples, which any of our readers could relate to – and the one word that keeps being the underlying reason for this is ‘supervision’, or actually the lack thereof.

When embarking on any project of this nature, ensure that someone is really supervising the project, and not just leaving workers on site, who then get blamed for the delays when they were not properly instructed. If the project is of such a nature that full-time supervision is not necessary, regular check-ups on work-in-progress should be performed to prevent massive re-work.

Western Cape Government pushes back on proposed Airbnb legislation

Western Cape Airbnb legislation

Hot on the heels of the announcement that the Tourism Amendment Bill’s amendments propose to regulate Airbnbs, Western Cape Minister of Economic Opportunities, Beverley Schäfer, demonstrates strong opposition to the regulation of short-term, home-rental platforms of this nature.

The Western Cape Government will be making submissions “to oppose any regulations which could impact tourism revenue and affect people’s private property rights,” commented Schäfer. Her view is that the Western Cape Government is driving tourism growth and, in order to develop this sector, a sufficient mix of hotel, B&B and home-rental room nights are required in order to accommodate a wide variety of tourists and budgets.

What is most interesting though, is that South African Minister of Tourism, Derek Hanekom, at this year’s African Travel Indaba, stated: “Tourism holds great promise for the development of small businesses. It is when you stay in small bed-and-breakfast establishments or small hotels, that you get to interact with the locals, listen to their stories about the area, and get advice on the best, least-known place to visit on sight-seeing trips”. These are among the many reasons why Airbnb has been successful.

This sentiment is, almost, in direct conflict with the comments made by Blessing Manale, chief director of communications at the Department of Tourism, when he stated that the minister could determine certain so-called “thresholds” for short-term home rentals, which could include a limit on the number of nights guests could stay at an establishment and could, perhaps, even limit the number of guests, due to potentially larger water consumption in an area. The fact that these thresholds could also look at pricing, zoning, how much an establishment can earn and, maybe, even regulating matters such as security does come across as tightening the noose around the necks of Airbnb hosts rather than “developing small business”, as Minister Hanekom stated.

Schäfer further states that we need to stimulate innovation and use disruptors in order to put tourism on steroids in the Western Cape and in her view, any regulations that infringe on people’s property rights, or impact a host’s ability to earn a living, must be rejected outright.

“Over 2 million people have made use of Airbnb alone in this country, and if regulations make it more difficult for travellers to access this kind of accommodation, they will simply vote with their wallets and go elsewhere. We cannot allow this to happen,” said Schäfer. “Regulations could unintentionally impact these businesses and entrepreneurs,” she cautioned.

This proposed change in the regulations is by no means a South African syndrome alone. Globally there are significant amendments being introduced, which are impacting on the freedom previously experienced by hosts. Airbnb’s growth story has been nothing, if not dramatic. From just two bookings in March 2008, the San Francisco start-up today has more than five-million listings in 81 000 cities around the world.

This growth has not gone unnoticed, and the platform has disrupted property markets, pushing up prices for long-term rentals as property owners make accommodation available for short-term lease. As a result, several cities, including New York, Amsterdam, Barcelona, London and Berlin, have moved to restrict Airbnb rentals by setting limits to availability and requiring registration from hosts. If one then includes the numerous other online booking platforms besides Airbnb, such as  Booking.Com, TripAdvisor and the plethora of South African-focused sites including Lekkeslaap, Afristay.com, Roomsforafrica.com, SA-venues.com – and the rest – it does appear as if some form of potentially-restrictive control is inevitable in this burgeoning market.

Most cities internationally, where regulations are already in force, opt for “limitation with restrictions”, which includes limiting the number of short-term rental options available (Barcelona allows for one listing per property owner), or the number of days properties may be rented out (Amsterdam limits rentals to 30 days a year), or only allowing short-term listings on residents’ primary residences (Los Angeles).

The growth of Airbnb in South Africa has, predictably, elicited calls for tighter regulation. But unlike elsewhere, where calls for regulation seem to stem from disruption of the long-term rental market, in South Africa, the focus seems to be on levelling the competitive playing field, which is where most of the resistance is coming in to play.

The potential cost implications to Airbnb hosts could be quite profound, as currently all costs for electricity, water, sanitation and solid waste are at residential rates, and not at commercial tariffs, which is what regulations of this nature could enforce. Furthermore, this would most likely also extend to property rates, where currently, residential rates apply versus commercial rates, which are much higher.

Let us not ignore the inevitable taxation hit that will also come into play. Johan van der Merwe, the finance member on Cape Town’s mayoral committee stated: “Our legislators must work with Airbnb to create legislation that would ensure Airbnb pays tax, but the legislation must be forward-looking and not seek to destroy Airbnb’s success. Airbnb has lowered the costs of doing tourism entrepreneurship and therefore created jobs.”

So the question remains: are legislators trying to increase the drawcard for tourism or will they, potentially, have a negative influence on tourist-accommodation options and stem the effectiveness of entrepreneurship?

Short-term home rentals to be legislated under Tourism Act

We witnessed rumblings regarding the Airbnb industry, and the compliance requirements that the Overstrand Municipality was starting to enforce, late last year. While nothing further has been heard in that regard, there was a recent interview on Radio 702 that discussed government’s plan to regulate the entire short-term rental market.

The Tourism Amendment Bill, which was published on 12 April 2019 for public review and opinion, clearly states that government plans to regulate Airbnb and other home-sharing platforms in South Africa; and that ‘short-term home rentals’ will be legislated under the Tourism Act. The bill makes it clear that this directive will fall under the ambit of the Minister of Tourism, as currently there is no legislation that governs who is responsible for this regulation.

While the bill will empower the Minister of Tourism to determine the ‘thresholds’ regarding these short-term home rentals, there are growing concerns that this will be damaging to the tourism sector.

The thresholds, apparently, will be set to create a “shared economy” among Airbnb hosts, and will potentially control the number of nights that a guest can stay in an Airbnb; or even put a limit on the income an Airbnb host earns. Understandably, there is a lot of dissatisfaction among Airbnb hosts as it can easily be interpreted as a case of government controlling entrepreneurship, and preventing people from earning an income, particularly in holiday destinations such as Hermanus, where tourism is what makes the economy turn – and numerous capable and competent Airbnb hosts supplement their income or pensions in order to survive.

Even though the various online rental platforms have seen impressive growth in the country, local hotels are concerned that establishments listed on these platforms will take away business from established bed-and-breakfast facilities and hotels. The Federated Hospitality Association of South Africa (FEDHASA) is the one entity that called for government to formalise the control of the Airbnb industry, and this is clearly a move to reverse the impact it has had on the formal holiday accommodation sector.

In light of this, a small business lobby group called Sakeliga is considering taking legal action to challenge the new bill. The group’s senior analyst, Gerhard van Onselen, released the following statement: “The bill is ostensibly aimed at promoting the tourism industry, but really the bill is about intervening in the business of small-scale, short-term home rentals and the services offered by companies such as Airbnb. The minister is not going to promote the tourism industry, he is going to artificially drive up prices and interfere in an industry that regulates itself much better than government can.”

As if the Overstrand economy hasn’t endured enough of a bashing in the past year, when a number of businesses in different sectors closed down, this potential, legislative change could have an extremely, negative impact on the local hospitality industry. It is clearly evident that, even though the Overstrand short-term rental market is currently in an over-supply state, there would not be enough accommodation available during peak seasons if it were not for these establishments.

Should this legislation be passed, it would go a long way towards making a mockery of “free-trade” and, in essence, is controlling a traveller’s choice of where to stay and how much to pay for the services and amenities chosen, rather than those which could be forced on him/her by the more formal establishments.

It seems as if the key reasons travellers have chosen to use Airbnb, rather than the traditional accommodation establishments, have been lost over time and the powers that be are focused on making legislative changes to suit the “big players”, who are losing out to the Airbnb market, which has become the flexible and affordable choice of the populace. The fact that the Tourism Business Council of South Africa has stated that hotels in South Africa are losing millions of Rands because tourists are opting for Airbnb instead, is a red flag for a traveller’s freedom of choice.

Five of the key reasons why the Airbnb concept is successful should not be forgotten:

  1. Guests get to live like a local.
  2. Guests have flexibility around check-in or check-out times and cancellation policies.
  3. Guests can enjoy more space for less money.
  4. Guests can benefit from a wide choice of amenities.
  5. Guests can enjoy one-on-one interaction with the owner.

Should it be signed into law, the Tourism Amendment Bill will have a resounding impact on freedom of choice and the ability for holiday destinations like Hermanus to draw a broad range of tourists who, either cannot afford the more formal establishments, or more importantly, want to experience the hospitality of the locals for which this town is renowned.

To buy or to build is a personal choice

There may come a day when you decide you want to build your own home, rather than buy a ready-built house. You have probably engaged an estate agent, or three, and looked at suitable areas where plots are available and, hopefully, you’ve done a sanity check to ensure you have the mind-set, personality and staying power to go through the process. And if you haven’t, time will certainly be the deciding factor.

to buy or build

Partners Stuart Cohen and Gerhard Stegmann of CabinCare recently completed their own building project.

Basic research into the property market in the greater Hermanus area will illustrate how many vacant plots there are, and in a short time you’ll be able to determine a match for the funds you have available, as far as a purchase price goes. For obvious reasons, suburbs and their respective property values vary dramatically, and one needs to be cautious about balancing the potential long-term return on the entire transaction, against making a hasty price-only decision that you could regret over time.

The simplicity of buying a house against building a new one far outweighs the time, frustration, cost and challenges that building presents. The downside of buying is that you never get exactly what you want, and you may find yourself buying into levels of maintenance that you would never have anticipated. Building, however, puts a different kind of pressure on the purse. You must be bold to go this route.

Currently, there are more than 550 ‘For Sale’ listings for plots ranging in size from 200 m² to 2 000 m², with prices from R170 00 in Hawston to R25 million in Voëlklip. The average property size is in the 500 m² to 700 m² category, and if these plots are close to the sea, the price premium is clearly discernable, particularly in Voëlklip and Onrus.

At the higher end of the market, prices for the size of land can be disproportionate across different suburbs, but that is the nature of the property market. Examples of this are: R25 million for 990 m² in Voëlklip; R7.5 million for 586 m² in Onrus; and R9.45 million for 1 208 m² in Sandbaai. The choice is varied and often people’s emotions enter the equation, so they commit to buying for the wrong reasons, including circumstantial pressures, rather than keeping in mind what the budget allows.

Ultimately, if you have ticked the ‘I can build’ box, shift your mental gear and reflect on the budget you’ll need. Once you start building you won’t want to have to cut back because you underestimated what your available funds would cover. A tight budget has limited flexibility so be sure you have estimates of all the costs involved, otherwise you will find the process disappointing and frustrating.

From recent, personal experience, my advice is to work on pre-build expenses of about 5% of the total cost of building. These include fees for the following services – architect; geologist (if required); engineer; National Home Builders Registration Council; council fees for plan approval, water connection, septic tank testing and connection; and the Eskom or council electricity connection fee. As these charges vary from suburb to suburb, and the size of the property, it’s advisable to get an estimate at budget stage to make your financial planning more realistic.

Part of the process that will test your resolve is discovering how varied the cost of building can be, depending on your choice of contractor. This is a make-or-break decision that will leave you either with pleasant memories – or haunted for life.

Plan your building budget or take the financial pain

Most people will go through life avoiding the idea of building a house simply because of the horror stories they have heard about the pitfalls, stress, frustrations, delays and seemingly-endless negative aspects purportedly experienced by others.

Free picture ( Budget building ) from https://torange.biz/budget-building-2953

Contrary to popular belief, building your own home can also be one of the most creative, inspiring and challenging experiences which, when over, will leave you with exactly what you want in a ‘dream’ home, as long as you have the patience, the right mindset and, above all, the type of personality that can deal with the day-to-day activities that building a home brings with it.

The reasons people build are more varied than one would expect. In most cases it is a side effect of having bought a plot at some point in time for ‘investment purposes’ and then, when the timing is right, venturing forth into the world of a ‘home builder’. In other cases, it is simply because after searching endlessly for the right house, you decide that what is available does not suit some or all of your needs, so the next option is to build.

Once you have taken that decision, your choices then become either to build off plan in a development or to embrace the extensive process of engaging an architect and starting what will be one of the most interesting, energy-sapping and relationship-testing journeys of your life. The decision you take is often based on whether you are looking to scale up for a new and growing family or scale down as you head towards retirement and decluttering your life after decades of accumulating ‘stuff’.

When you head down the building road, you will hear many people talk about how much longer their build took than expected, or how difficult it was to manage the liaison with all the different parties involved. Add to that the way-over-budget syndrome which seems to be standard with most builds – and you could be justified in putting the process into reverse and forgetting that it ever started.

They key for this entire activity to be an enjoyable and rewarding one lies in one word – planning. There are so many facets to a build that, unless you are in tune with all of them, slippage can start early on and if it gets out of hand it seldom recovers.

Your planning must start with your budget and no matter what all the experienced builders and architects – and those in the know – say, if you don’t allow for some ‘fat’ or contingency allowance, you will feel the pain no matter what. There are hidden costs everywhere, some of which only raise their heads near the end of your build or are deeply entrenched in what builders and architects call the PC list.

In the normal building context, PC stands for Provisional Cost but what it really means is a wild guestimate of what someone thinks your personal taste in finishes might cost – and that is your first budget awakening moment. When you consider that a builder’s estimate can vary from an architect’s estimate by as much as 300%, make sure you know from the outset what you’re in for.

Gaining an understanding of what your outlay will be – sooner than later – is crucial for you to bring your build in on budget, if such a thing is at all possible… What this really means is that you need to be doing your finishes, groundwork and price investigations very early in the process in order to get a handle on what your costs will be.

While you knew there would be fees from the NHBRC (National Home Builders Registration Council), no one could put a figure to it until the day the builder registered the build. Make sure you have a Valium or a stiff Scotch at hand – not so much because of the costs involved (although that does warrant a sip or five) but more about how they justify the fees they charge for what doesn’t appear to be much work on their part. So be it, you pay because you have no choice.

Don’t underestimate the time it takes to connect your plot to the electricity and water resources because that is key to planning the next steps. Delays become a daily part of the build and no matter what you do, you must factor those into your plan from the outset.
We all know there will be costs for architects, builders, engineers and so forth, but do you fully understand the extent to which the costs mount up before you have even dug a crud of soil?

A wise man will do his homework first and get to as accurate a figure as he can, to know what his budget can cover and how far he can stretch it. But no matter what, a stretch it will be, unless you have unlimited funds.