Hotels on alert as Airbnb threat looms

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A plush room in a hotel in Kigali. Airbnb gives travellers options of staying in private homes. (Timothy Kisambira)

Conventionally, tourists and visitors coming to Rwanda for business or leisure book rooms in one of the many registered hotels across the country.

However, technology is changing the traditional way of seeking accommodation while travelling to new destinations and countries by offering options of booking in unique accommodations that include abodes of locals.

The service, offered by Airbnb, an international marketplace for rental accommodation, has its headquarters in California, US, with a presence in about 190 countries across the world, including Rwanda.

The service, that can be found online at www.airbnb.com, makes it possible for people to rent out extra space in their homes to visitors and tourists.

Recently, the platform seems to have caught the attention of Rwandan home owners with a number of them putting up their houses and apartments for rent on the platform.

A quick search reveals that more than 170 local properties have already been listed on the platform, ranging from apartments, ordinary homes to art galleries.

Fare-wise, the properties are relatively cheaper compared to hotels and lodges across the country.

While the average fare for a standard hotel across the country currently stands at $70 (about Rwf50,000), the properties advertising on Airbnb go for as low as $20.

To book accommodation on the platform, one simply needs to get onto the platform’s website, create a social media-like account and go ahead to choose from a variety of listed accommodations.

To put up space for rent on the platform also only requires one to create an account on the platform, give specifications of the spaces they are renting out, upload pictures.

Like other tech developments, the platform has been received with mixed reactions by clients and operators in the hospitality industry across the country.

Rwandans who have put their properties for rent on the platform seeking to monetise extra space in their residences say the development enables them earn extra income at almost no extra cost.

Most of those who spoke to The New Times said they were putting up their guest rooms for rent for extra income.

Julius Twahirwa, who has put up one of his three rooms for rent on the platform, said being single, much of his rooms are unoccupied.

Security concerns

The service is, however, keeping hotel operators on their throes, worried that it will take away their business and bring about unfair competition.

Former clients of the service say among its advantages is that it provides a wide variety of accommodation facilities are rarely listed on hotel booking platforms.

Talha Mehmood, a Pakistani national currently doing business in Rwanda – who had previously used the platform while in Europe – told The New Times that it made it possible for him to choose from a wide range of options and costs.

Mehmood said there are, however, security concerns as client has no way to vet the owner of the space they are renting as well as the lack of an authority to lodge complains.

“In the event anything happens to you, it is not possible to lodge a complaint like you would to a hotels management,” Mehmood said.

He added that Rwanda’s security reputation across the region would probably increase the confidence of accommodation seekers travelling across the region to use the platform.

‘Unfair competition’

Francine Havugimana, the proprietor of Impala Hotels and also the vice chairperson of the Chamber of Tourism at Private Sector Federation, said the service poses unfair competition to operators in the sector registered by government.

She said the informal operators do not pay taxes and therefore have unrealistically low prices that pose unfair competition for registered operators.

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A side view of Mariotte Hotel that is soon to be completed in Kigali. Hotelliers are spending sleepless nights after the emergence of online Airbnb rental marketplace that connects travellers and tourists to private homes that offer cheaper and often more convenient accommodation. (Timothy Kisambira)

Havugimana added that the informal operators are likely to compromise on national standards adhered to by registered operators.

“A lot of work has been done by registered operators in partnership with the Rwanda Development Board to ensure that there is standards and quality service delivery in the sector, however, the new players are not regulated and could compromise on standards,” Havugimana said.

These, she said, might have consequences on the national image of the sector in the event that tourists and visitors receive poor services.

Havugimana said to ensure standards, the properties ought to be registered under the chamber and also to foster partnership with other industry players.

She appealed to the operators to consider registering their spaces for partnership with the chamber to ensure implementation of directives and regulations such as registration of guests.

However, Rwandans putting up their homes for rent on the platform say that the issue of compromise on quality should not be a worry as they also seek to have positive reviews which will bring them more clients.

Commenting on the development, Belize Kariza, the chief tourism officer at Rwanda Development Board, said they are aware of the platform and are looking into ways to regulate and work with players in line of work to ensure adherence to standards and that security is not compromised.

However, Kariza noted that Rwanda was establishing itself as a high-end destination meaning most clients coming into the country would prefer staying in hotels.

The development comes at a time when the private sector is making efforts to bring in international hotel brands with the latest entrants including Marriott Hotels, Radisson Blu Hotels, Sheraton, Golden Tulip, Kempisnki and Zinc among others.

Tech enthusiasts say the development like other innovations would be difficult to resist despite the disruption it is likely to create in the hospitality sector.

The experts say the development which is likely to see a drop in revenues of small and medium sized hotels will, in the long run, have positive consequences in the economy including maximum resource utilisation.

The Minister for Youth and ICT, Jean Philbert Nsengimana, said the current era was introducing ‘sharing’ aspects which would in the long run see maximum utilisation of resources and diversification of economies.

“This is another development that arises as a result of investments in internet and ICT in general. As government we believe that you cannot fight products of innovation but instead work with players to facilitate adoption with minimal negative effects,” he said.

Nsengimana said the development called for regulators in the sector to consider possible regulations to ensure standards and security.

He also called on traditional operators in the sector to use the development as a wake-up call to change the previous approach of doing business and work to embrace the digital era to ensure the survival of their enterprises.

editorial@newtimes.co.rw