CYPRUS: Hoteliers fuming over red tape and Airbnb bill

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Hoteliers are fuming over having to jump obstacles created by state bureaucracy and legislators while trying to recover from the multi-million loss caused by the collapse of tour giant Thomas Cook.


A revised version of the draft law regulating the licensing of short-term rentals through online Airbnb-type platforms has prompted a strong reaction from hoteliers.


They see the new version as encouraging unfair competition as Airbnb-type accommodation will not have the same type of regulatory oversight.


In an attempt to simplify the licensing procedures for inclusion in the register of the Ministry of Tourism, MPs have removed what hoteliers see as essential elements for fair competition while stripping the law from requirements for health and safety certificates.


According to the bill as presented in parliament, provisions for licenses required such as a Fire Safety Certificate and health, which are required from other licensed tourist accommodation, were scrapped.


Under the revised bill, any owner of a flat or housing unit can rent it to tourists, in the same manner someone rents an apartment to a student, as long as it is included in the official register.


According to the original proposal, the Deputy Ministry of Tourism would have been tasked with carrying out on-the-spot inspections of these accommodation units. However, in the revised proposal, this clause has been removed.


Under the legal framework regulating hotels, the Deputy Ministry of Tourism may at any time conduct surprise inspections to verify whether the establishment complies to regulations and has obtained all necessary permits regarding operation and maintenance.


Hoteliers insist that short-stay rentals of such accommodation should be regulated properly with legal health and safety standards introduced, they also point out that unfair competition also arises from these establishments not being taxed.


The issue of taxation has yet to be clarified either by legislators or the government. The government could submit legislation regarding taxation at the source, this would depend on information received from the online platforms. Otherwise, it would have to rely on landlords declaring their income.


The ministry has held meetings with the operators of platforms such as Airbnb and the Tax Commissioner on the matter.


The revised text of the draft law, originally tabled by EDEK MP Elias Mirianthous and DISY President Averof Neophytou, will be discussed next Tuesday in the presence of Deputy Minister of Tourism Savvas Perdios.


Meanwhile, Cyprus hoteliers are complaining over a long delay by the Legal Service in examining the bill on criteria for a new ranking system for hotels and tourist accommodation.


As a result, hotels are unable to obtain the necessary permits which hamper efforts to recover after the collapse of Thomas Cook.


The Association of Cyprus Tourist Enterprises (ACTE) and the Cyprus Hotel Association (CHA) said the bill is being inexplicably delayed at legal services, where it has been since May.


According to the procedures laid down, the criteria, following the legal review, will be referred to the Cabinet for approval so that hotels can apply for their classification and authorization.


“This delay has resulted in hotels operating without the necessary permits with all the consequences that entail,” said Chrisemily Psilogeni, ACTE’s president.


“On the one hand authorities criticise us for not having the necessary permits, on the other bills that would allow us to do so are being tangled up in legal services red tape,” she told the Financial Mirror.


This means that some new hotels will not be able to be categorized and receive the corresponding permit.


Director general of the CHA, Zacharias Ioannides said the delay is as another blow to the industry which is trying to recover from the downfall of Thomas Cook. Reportedly the demise of the UK tour giant cost the island’s hoteliers around €50 mln.


“We are currently trying to set up deals with the remaining tour operators, who are asking for us to submit our permits and ratings. A number of hotels will not be able to do so, losing out on significant income.”