Hotelier Tony Zahra warned today that an unregulated Airbnb sector could run many legitimate accommodation establishments out of business.

Mr Zahra was speaking at a conference on ‘Sharing Economy’ organised by the Tourism Studies Association.

The term Sharing Economy is a hybrid market model which refers to peer-to-peer-based sharing of access to goods and services, coordinated through community-based online services. In the tourism sector is often refers to the advent of models like Airbnb, which allow anyone to put up their properties for rent online, giving tourists an alternative to hotels and other forms of collective accommodation. But the sector is as of yet unregulated and not all accommodation is up to standard.

Precise data is also lacking. Hotels argue that the lack of regulation is putting the established and law-abiding businesses at an unfair disadvantage.  

The outspoken hotelier argued that this latest challenge in the tourism sector was here to stay and, rather than putting up a futile fight, the sector had to embrace it and move forward with it. The private accommodation business however (such as Airbnb) had to be regulated and a level playing field had to be ensured.

Mr Zahra said a similar thing existed in the 60s. Most tourists at the time came from Britain. “Many of them would buy not just one apartment in Malta, but several. They would then encourage friends to come over and rent out their properties. They became mini travel agents. Then a certain politician who I shall not name told them they couldn’t rent out their apartments any more. This led to a drop of around 30% in arrivals.”

Mr Zahra said the tourism sector was, until recently dominated by the tour operator. There were many people involved, all receiving their cut. Then three major earthquakes occurred. The first was Malta’s accession to the EU, which opened up freedom of the skies. The second major development was the introduction of low-cost airlines, which made travelling simpler and less expensive. The third is being experienced now with the advent of the shared economy.

“We need to be careful and ensure a level playing field. An unregulated sector would not be fair for the regulated businesses and, dare I say, those who pay the 50 cent eco-contribution. In such a scenario these legitimate businesses risk being run out of business. We cannot have a huge black economy. These new accommodation sectors also need to be up to standard,” he said.  

Mr Zahra said the relatively new style of accommodation presented many opportunities. “We cannot stop the world from turning round. We have to move ahead with it and use that to the maximum. We cannot stifle this economic growth but we need to regulate.”

Tourism Minister Edward Zammit Lewis said also said that the sector has an upside and a downside. Private accommodation had to be up to standard he said, acknowledging that compliance with regulation came at a cost. “The government is in discussion with all stakeholders, gathering precise data.  Proposed revised regulation was recently put up for public consultation. It addresses many of these concerns. The proposed law includes licensing and third party liability insurance. It will be in place by the end of 2016.”

Dr Zammit Lewis said an awareness campaign will also aim to mitigate and clamp down on illegalities.

The Opposition’s spokesperson on tourism, Antoine Borg, said politicians often spoke about investment in the sector but the single most important ingredient was human capital. He noted that more people are today making a career out of the tourism sector, rather than just using it as a stop-gap or summer job.

The tourism sector, he said, belongs to everyone. Mr Borg also spoke about community-based tourism, noting how localities such as Rabat, had enormous potential in applying this concept.

Sustainability, he said, was not just about investing in the sector but also in the country as a whole. ODZ areas need to be safeguarded – we need to preserve our country’s natural beauty – which is a huge asset.