Leepan: AirBnb needs regulation

Rep. Joseph Leepan T. Guerrero (R-Saipan) is calling for the CNMI to regulate AirBnBs units here and compel their operators to pay the hotel occupancy tax.

Guerrero said Airbnb units have gone unchecked, with operators not being charged for hotel occupancy tax, despite being part of the hospitality industry.

A Wikipedia entry says that AirBnB operates an online marketplace and hospitality service for people to lease or rent short-term lodging including holiday cottages, apartments, homestays, hostel beds, or hotel rooms.

On Saipan, AirBnBs have been sprouting mostly in villages.

“AirBnBs have become an infestation. There’s no control. …There’s no public law that [requires] AirBnBs to pay the hotel occupancy,” said the Precinct 1 lawmaker.

Section 1502 of Public Law 20-30 imposes an occupancy tax on “transient occupants” of a room or rooms in a hotel, lodging house, motel, resort motel, apartment, apartment motel, rooming house, private residence, bread-and-breakfast, condominium or similar facility in the Commonwealth.

It became law last December.

The tax is 15 percent of the amount charged by the owner or operator of any of these facilities.

Guerrero said the Department of Finance had already begun identifying AirBnBs on Saipan. “I know [Finance] Secretary [Larrisa] Larson is diligently addressing the AirBnBs issue. She’s got her staff out there in the community tracking down these AirBnBs operators to make sure they are in compliance.”

He added that enforcement of the law is needed. “The law must be enforced. Inform the operator that they need to follow the laws of the CNMI or else they are going to be shut down or penalized. They must be in compliance.”

“The only problem is this continues to build up and it’s going to be a huge issue because you are going to have AirBnBs all over the island. You can see a lot of tourists who are dragging their luggage on the road.”

Guerrero said some people in the community have already been complaining about AirBnBs in villages. “Once an AirBnBs pops up, tourists would have their own means of transportation, not only one but sometimes two or three.”

“There’s inadequate parking and they just park wherever they please. Sometimges they are found at their neighbors’ parking lot. These tourists, they do not know because there’s no instructional materials in these AirBnBs.”

Some AirBnBs are cheaper than hotels, making it a popular alternative for tourists.

Guerrero said these tourists either receive specific instructions on how to get to the AirBnBs facility, including the location of the key or would be picked up at the airport and dropped at their rented unit.
“Some of them are at a disadvantage because sometimes what is being shown to them is not what exactly what they see when they arrive here,” added Guerrero.

Affecting occupancy rates
Hotel Association of the Northern Mariana Islands president Gloria Cavanagh said AirBnBs have affected their occupancy rates as they have no way to keep track of how many avail of these temporary transient houses.

The latest numbers saw a 14-percent drop in hotel occupancy in June or from 55,096 in the same month in 2017 to 47,341.

“Our occupancy rate is below from last year’s. There is a slight dip in arrivals but a big contributing factor are the guest houses and AirBnBs, most of which go without appropriate licensing and permitting,” said Cavanagh.

“China is up 3 percent compared in June 2017, despite strong competition from other island destinations and pre-summer vacation slump in travel.”

She, however, expressed optimism for the coming months, especially in September; she expects arrivals to increase, most likely from Korea, due to their upcoming holiday celebration.

“T’way Air had resumed daily schedules and had announced additional charter flights from Sept. 21 to 29 during Chuseok or the Korean Thanksgiving.”

Sun Palace Hotel, Gold Beach Hotel, Capital Hotel, Aquarius Beach Tower Hotel, Surf Club, Grandvrio Hotel, Coral Ocean Golf Resort, Laolao Bay Golf & Resort, Aqua Resort Club, Fiesta Resort & Spa Saipan, Hyatt Regency Saipan, Kanoa Resort, Kensington Hotel, Mariana Resort & Spa, Pacific Islands Club Saipan, and Century Hotel are HANMI members.