Airbnb is quietly revolutionising the way tourists find accommodation while helping property owners make a quick buck, but users not registered with the Malta Tourism Authority are breaking the law.
The website provides a platform to rent unoccupied living space to tourists. Users create a profile as they would on a social network and are able to advertise houses, apartments or rooms for short-term lease.
Tourists pay through the website using their bank card or Paypal.
The Sunday Times of Malta has spoken to several users who advertise accommodation without being in possession of a licence from the MTA.
On condition of anonymity, one “host” said she did not know if she needed a licence to rent out her property on Airbnb, and she would not apply for one unless instructed to do so.
Asked to clarify the rules, a spokesman for the MTA confirmed that no one was legally entitled to rent out accommodation without a licence.
– the number of properties in Malta and Gozo listed for rent on Airbnb.com
The Travel and Tourism Services Act is clear: “No person shall provide accommodation in a house to tourists unless he shall have previously obtained and is in possession of a licence.” The only exception to this rule is the provision of accommodation to friends and relatives.
Anyone who breaks this law is liable on conviction to a fine of between €1,164 and €23,293.
As of yesterday there were 813 properties in Malta and Gozo listed for rent on Airbnb.com.
The increasing popularity of private holiday rentals was evidenced in the Central Bank of Malta’s second quarter review, which showed that stays in self-catering apartments, farmhouses and private residences increased by 33.8 per cent over the corresponding period in 2012.
Airbnb users enthuse about the website. Valletta resident Joanna Delia has used it to rent accommodation in London, Paris, Reykjavik and Rio de Janeiro.
“It seems to satisfy the desire to peep into other people’s homes. It’s affordable and the choice is endless,” she said.
Another user who leases accommodation in Sliema described Airbnb as “revolutionary”.
“It allows you to turn unused spaces within your house into profit-making assets,” he said.
“You also get to meet new people and share your experiences with them.
“It’s great that you can also vet any prospective guests and say no to anyone you aren’t sure about.”
With its popularity soaring, Airbnb has already come to the attention of authorities overseas. Earlier this year, a judge in New York fined an Airbnb host $2,400 for violating hotel laws. The ruling was thrown out on a technicality this month.
Airbnb addresses the issue on the frequently asked questions section of its website: “Your state or locality may impose a tax or taxes on the rental of rooms or the related rental fees.
“We expect all hosts to abide by their local laws, agreements, tax authorities and any other applicable regulations.”
Following the successful appeal in New York, Airbnb CEO Brian Chesky released a statement saying: “Our hosts are not hotels, but we believe that it makes sense for our community to pay occupancy tax [in New York], with limited exemptions for those who earn under certain thresholds.”
The MTA said it had received just one complaint about unlicensed rentals on Airbnb in 2012.
Asked whether the tourism authority was concerned about the website, a spokesman replied: “Obviously any sort of advertising medium brings about both positive aspects and also concerns.
“The MTA is aware that such sites are susceptible to people who are inclined to abuse the system.”
Tony Zahra, president of the Malta Hotels and Restaurants Association, said the MHRA had no problem with new “channels and trends” in holiday rentals, provided users are properly licensed and registered for VAT.
“If this does not happen, then it destroys the level playing field and gives non-regulated people an unfair advantage, since regulation carries costs,” Mr Zahra said.
“Furthermore, regulated accommodation is inspected and classified, giving a level of comfort to consumers.”
Mr Zahra added that the MHRA has been warning the Government about the proliferation of non-licensed accommodation for the past three years, saying this results in a substantial loss of revenue through fees and taxation for the State.
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