‘New bylaw to tackle Airbnb ‘hotel substitution’ -- Geordin Hill-Lewis

The proliferation of Airbnb and other digital platforms is stifling hotel investment and job creation in Cape Town, according to Mayor Geordin Hill-Lewis.

As a result, the City hopes to ‘even the playing field’ with its proposed new bylaw, intended to clamp down on commercial businesses using the platforms to avoid commercial rates and charges, the Mayor says.

Speaking at a Cape Chamber engagement earlier this month, Hill-Lewis stressed that the bylaw was not aimed at homeowners seeking additional income by renting out their home or garden ‘granny flat’: “We are not going after that income-supplementing activity. We are interested in the large commercial (enterprises) who are holding back and cutting off hotel investment in Cape Town,” Hill-Lewis said, adding that Cape Town had relatively few hotels for such a sizeable tourism market.  “We’ve got some of the world’s leading hotel brands and local hotel brands, and they say, with significant justification, that they would like to build a new R350 million hotel in the city, but can’t justify it – it would be easier to buy a whole bunch of apartments and rent them out like a hotel but pay a fraction of tariffs and charges. It is not fair and right.”

According to the City’s proposed new bylaw – currently out for public comment – a property would no longer be considered ‘residential’ if its total available bedrooms are listed for short-term letting for more than 50% of the year. In that case, the City would reclassify the property as ‘Business and Commercial,’ thereby increasing the property rates.  

While Cape Town pursues local regulation, the sector is also facing scrutiny at a national level. Short-term rentals even came under the spotlight in Parliament last month during a discussion about the Tourism Department’s draft Code of Good Practice for short-term rentals (STRs). The Code is an interim regulatory measure pending finalisation of a Tourism Amendment Bill.

Speaking at the parliamentary briefing, the Short-Term Rental Association (SASTRA) highlighted the STR sector’s contribution to local economies, job creation, and broader tourism access, particularly in underserved areas.