The Ministry of Tourism signed a memorandum of understanding (MOU) with Airbnb Inc. representatives yesterday to implement a new legislation which will require that a tax be paid on vacation rental home businesses.

Minister of Tourism Dionisio D’Aguilar said the new legislation will put in place a modern regulatory framework within which vacation home rentals can operate as an integral part of the country’s tourism sector.

Airbnb is an online marketplace and hospitality service, enabling people to lease or rent short-term lodging including vacation rentals, apartment rentals, homestays, hostel beds, or hotel rooms.

The ministry has sought out partnership with Airbnb Inc., a key player in the global home sharing economy.

Sean Sullivan, the representative for Airbnb, expressed that in The Bahamas there are 1,900 active listings and 1,200 active hosts on Airbnb.

Mr. Sullivan said, “The Bahamas is a very important strategic country for Airbnb in the region and he is very happy to be associating Airbnb with a great brand, The Bahamas.”

An Airbnb host can earn an average of $6,000 a year and guests stay on average 4.6 nights.

Arrivals of guests have dramatically increased in the last 12 month by 95 percent.

Mr. D’Aguilar’s sentiments are that in order to encourage and enhance growth and development, the Ministry of Tourism will focus on four main points: diversify the accommodations sector of the tourism industry, circumvent potential industry sub-sector challenges, ensure the safety of the home rental guest, owner, and property and develop, and showcase this niche market as a national revenue resource.

Mr. D’Aguilar recognizes that vacation home rentals are an industry that is relatively attainable for Bahamian investors and also provides great opportunities for Bahamians.

However, although very appreciative of the contribution of vacation home rentals to our economy, Mr. D’Aguilar’s concern is that this sector is unregulated and operates without taxation.

He maintains that by signing this agreement, the ministry will implement a number of measures to regulate this sector.

Mr. D’Aguilar advises all proprietors and operators of rental homes to register with the Hotel Licensing Department of the Ministry of Tourism.

Mr. D’Aguilar said, “The new regulation will define the parameters of vacation home rentals.  It will set the standards and best practices to facilitate the sector in preserving the reputation of our destination brand.”

The minister of tourism added that the memorandum of understanding between the Ministry of Tourism and Airbnb is a goodwill agreement between two industry partners who have decided to cooperate in areas of common interest.

He said some of the areas of common interest are providing information to Airbnb about industry related laws in The Bahamas and exploring the possibility of Airbnb collecting and remitting any applicable taxes.