EU warns Airbnb over unfair practices

Cyprus hoteliers got a helping hand this week in their fight for more restrictions on Airbnb, following a European Union warning to the American platform to improve its practices or face action by national consumer agencies.

Airbnb, a San Francisco-based company which operates an online hospitality service, has grown in popularity in recent years. The service allows people to lease or rent short-term lodging including hostels and apartments, offering very competitive prices compared to traditional hotel bookings.

But the European Union says Airbnb does not offer clear terms and conditions and some of their final prices are not stated clearly, including additional cleaning charges or whether lodging is offered by a professional or private owner.

This criticism comes after the Cyprus Tourism Organisation (CTO) was calling earlier this year on traditional stakeholders to come up with ways to curb the high number of Airbnb rentals, citing unfair competition due to tax evasion, unregulated practices, as well as safety and health risks.

In Cyprus, hotels have taken a hit from Airbnb bookings which cost a fraction of a hotel stay.

A new legislation proposal would force property owners to register with the government and pay taxes if they wish to rent out their home or property.

The law would basically require owners not only to pay taxes on their rented properties but also inform the government on the number of reservations made online.

Taxes will be calculated based on their income while any owner regardless of income will have to pay a €5000 fine if they fail to register.

But CTO and the Cyprus Hotel Association (CHA) say the proposed law, sponsored by ruling conservative party Disy, does not address their concerns.

CHA further believes unlicensed properties ought to be used only for domestic use, not for tourism purposes.

The EU Justice Commissioner Vera Jourova called on Airbnb to comply with consumer rules and regulations.

“Consumers must easily understand ... how much they are expected to pay for the services and have fair rules for example on cancellation of the accommodation by the owner,” Jourova said.

While authorities are trying to figure out a way to address the issue, more and more travelers seem to prefer Airbnb for its “local tourism” not just prices that are cheaper than hotels. People who use Airbnb say there is a domestic connection between travelers and the places they visit, making the experience more enjoyable or more meaningful.