Our tourism pioneers had the foresight to separate tourism hotel development from our residential areas. The Sasaki Plan was visionary when it allowed Joe Citizen to work in the tourism area and at the end of the day go home to the peaceful surroundings of his barrio to recharge his batteries for the next day’s do-over. The Sasaki Plan created a balance in Joe Citizen’s life between servicing people, most of whom are of a different nationality and culture, and coming home to the comfort of his own culture in his barrio.
Airbnb, aptly labeled “the disrupter” has certainly disputed the Sasaki Plan. It has provided a platform for Joe Citizen’s neighbors to rent their home or a part thereof, for measly net earnings of Awg 15K annually, at the expense of Joe Citizen’s bario, its culture and way of life.
Case in point: The Merlot residences in Bubali are occupied more than 80% of time by vacation rental visitors. This was not always the case and certainly not the case when a local family who lives there year-round purchased their home about a decade ago. The complex has totally transformed into a vacation rental residence. The homeowner who works in the tourism industry says there’s nothing relaxing when you come home to a bunch of tourists either living next door and across the way from you. The noise, the parties, and the comings and goings are all very disruptive to their tranquil island lifestyle. Sure, they can sell and move, which is what they will probably do, but the move will feel like they’ve been pushed out of a house they enjoyed living in.
The other disrupter are non-residents owning a home or in some cases multiple homes on the island, putting them into vacation rental programs and generating revenue from these investments. On the face of it there nothing wrong with that but think of the impact. Aside from not paying their 9.5% accommodation tax, they don’t pay any other taxes but they use the infrastructure of the island. Yes, they purchase goods and services which are taxed and put money into our tourism economy, but so do the six-nighters staying at hotels.
Do we need visitors to own homes to drive our economy? The impact is the increasing cost of real estate thus preventing tax paying locals from purchasing or building a home. Ask our millennials whom have entered or been in the workforce for a while now if they can afford a starter home in Aruba? Unless they have well-heeled parents, willing to help out, it’ll take them significantly longer to purchase or build their first home than previous generations?
So what’s the solution(s) – The Sasaki Plan should be updated to include zoning for non-hotel accommodations (vacation rentals). In other words, keep certain barrios off limits to vacation rentals. Why?
- Easier to manage/regulate (tax collection, etc.).
- It keeps our barrios local, and mitigates the risk of some being overrun by tourists. Additionally, charge anyone nonresident who owns a second home in Aruba premium land tax, for example, U$ 30K per year per home. Why?
- This tax will ensure nonresidents are paying their fair share. If you want to own a home in Aruba it’ll cost you.
- Naturally some or many homeowners will sell and move on, and that’s ok, because the other upside will be more affordable real estate for locals.
- Also important: Prohibit nonresidents (people not holding a Dutch passport) from renting their homes as vacation rentals or putting their homes in a vacation rental program. This shared economy should be for locals only, not outsiders. This way, the average $9K in net revenue will increase and go to the persons who deserve it. Most of our hotels and condos are foreign owned so give some of the accommodation business to the locals.
I understand and appreciate the argument of the shared economy provided by the likes of Airbnb. There are those who have benefitted, locals included, who would otherwise find it difficult to earn a dime from tourism, but when I see the upside being an average $9K in net revenues, of which the property owner still has to deduct expenses, I ask myself, who is the true beneficiary here?
Airbnb for one.
And, the non-resident who owns a home(s), the another.
I seriously doubt it’s the local guy renting out a room in his local barrio that is making much more than the average. If we want to prevent our industry from getting to the tipping point where locals are getting weary of tourism, and questioning the benefits of the industry, we need to give them genuine opportunities to benefit from it. Afterall, who is supposed to benefit from tourism?
Perhaps this sounds controversial but it’s no different than the controversy Airbnb has stirred up.
Interesting Airbnb article