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Airbnb community boosts Western Cape economy by an estimated R5 billion

Airbnb has today released new data on the impact of the home sharing community across the Western Cape, highlighting the continued growth of guests in the region and the positive impact Airbnb brings to local families, communities and businesses.

The data, which looks at host earnings and guest spending, shows that last year the Airbnb community generated an estimated R5 billion of economic activity in the region, helping boost the local economy and putting money back in the pockets of regular people. 

Other highlights of the data show that:

Airbnb continues to grow across the Western Cape:

In 2017, almost 15,000 hosts across the region welcomed over 540,000 guest arrivals from around the world – a growth of 86 percent compared to 2016. 

Hosting on Airbnb is boosting the local economy:

The typical listing was shared for less than two days a month with the typical host earning around R34,400 ($2,600) a year.  Hosts earned a total of R1 billion, helping boosting local families income. The typical guest spent around R1,715 per day in local communities and businesses.

Home sharing helps spread the benefits of tourism:

Trending destinations outside of the typical tourist hot spots has seen the biggest guest growth over the last year, with a 213% increase in guests staying in Beaufort West and 208% in Ceres.

Locals are opting for staycations:

Over a third of all visitors to the region were from South Africa – highlighting the increase in locals opting for a staycation to enjoy the cities on their doorstep.  US visitors were second highest with 54,600 guest arrivals  closely followed by Great Britain with 54,400 guest arrivals. 

Today’s release of this data forms part of our Community Compact, a series of commitments with cities around the world, including regularly sharing data on the impacts of home sharing to help build an open and transparent community. 

Velma Corcoran, Country Manager for South Africa, said:

“Everytime a guest visits South Africa using Airbnb, local families and their communities benefit.  Last year saw a record number of guests visiting the Western Cape on Airbnb and we’re delighted to help spread the benefits of tourism beyond the typical tourist hot spots to lesser known towns and neighbourhoods. Whether it’s staying in Saldanha, Swellendam or Stellenbosch, hosts provide unforgettable experiences for guests to live like a local. We look forward to seeing guests discover more unique, diverse and welcoming communities across the region throughout the year.”

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Do Airbnb hosts have enough protection in place?

With tougher economic conditions and high debt burdens this year, many consumers are turning to alternative income sources to supplement their income over the festive season. Some homeowners, particularly those who have second homes or are going away over the December period, are turning to short-term rentals, such as Airbnb, as a form of additional revenue to help line their pockets.

While there is no doubt that the rise short-term rental online platforms can be considered one of the biggest disruptors of the rental space and a positive boost to our ailing economy, Vera Nagtegaal, Executive Head of Hippo.co.za, cautions homeowners to be aware of the various regulations and bylaws governing the rental sector. “Short-term rentals are a fantastic way for homeowners to earn a little more spending money. But, for any homeowner who is considering renting out their home, it is important that they are aware of the regulations, insurance implications and security risks involved.”

Realising the growth opportunity that comes with Airbnb, The City of Cape Town signed an agreement with the company in October this year in order to promote the benefits of people-to-people tourism for Cape Town residents and their communities and promote Cape Town across the world as a unique travel destination.

According to Airbnb's 'Overview of the Airbnb community in South Africa' report, approximately R817 million was earned by local households and more than R2.4 billion in total economic activity was generated between Airbnb hosts and guest spending in the country in 2016. In Cape Town alone, there are 17 600 active listings on the short-term rental website and hosts have earned a combined income of R762 million over the past 12 months. 

Nagtegaal points out that in interviews post the City’s announcement encouraging tourists to make use of short-term rentals, Counsellor Brett Herron warned that homeowners should be mindful of the municipal planning by-laws, which indicate a block of flats cannot be used for holiday accommodation or hotel purposes. Any owner wishing to do short-term holiday letting from a block of flats, irrespective of the platform facilitating such letting - such as Airbnb or otherwise - must ensure the property is appropriately zoned and must apply for consent from the city's development management department.

“In letting out your home, this also has an impact on your insurance cover,” explains Nagtegaal. “Should the home be used for commercial purposes, an insurance claim can run the risk of being repudiated if inadequate cover or the incorrect type of cover is in place.”

Nagtegaal says it is extremely important that homeowners also understand the different types of cover available to protect against theft, damage and any other possible claims that can be made.

She explains that as the home is technically being used for commercial gain this has an impact on the type of cover homeowners should have in place, which could also include public liability cover.

“As we gear up for the festive season, short-term rental hosts are encouraged to review and compare their existing cover against the various types of cover available to ensure that they are adequately and appropriately covered against any eventuality,” concludes Nagtegaal.

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