You don’t have to be a hotelier to play a part in Bermuda’s tourism industry these days.
Individuals from St George’s to Somerset have jumped on the Airbnb and vacation rental bandwagon in recent years by transforming their homes, apartments and even spare bedrooms into guest accommodations.
There’s lots to consider before you make the plunge, however, from deciding which type of short-term rental to operate, to figuring out how to navigate all the rules and regulations. Cynthia Millett, Counsel in the Bermuda Real Estate practice at Conyers, helped weigh up the pros and cons of running an Airbnb versus a vacation rental.
LOCAL VS INTERNATIONAL PLATFORM
Vacation rentals are typically managed by local companies or individuals who only advertise Bermuda properties, so they have specialist local knowledge which can be invaluable to someone unfamiliar with the island. They typically charge 15 per cent commission per rental.
Airbnb does not specialise in Bermuda, but it has a vast reach from its international online platform. It charges a flat guest service fee of 3 per cent per booking.
WHOLE HOUSE OR JUST A ROOM?
Vacation rental agents usually deal with a booking of an entire house. Airbnb, meanwhile, gives people the flexibility to rent out just one room or a shared space.
BOOKING PROCESS
When people book a vacation rental in Bermuda, they usually deal directly with the property owner, or a property management company. It may involve filling out rental agreements, making payments directly to the owner or their agent, and communicating directly with them or their agent.
With Airbnb, everything goes through the online platform. All bookings, communications, payments and reservation management is done through the Airbnb website or app.
AVAILABILITY
Vacation rentals may be limited in terms of availability, especially during peak travel seasons. Airbnb typically offers a wide range of options and allows the host to easily add or remove their listings based on their preferences and availability.
AMENITIES AND SERVICES
Some vacation rentals offer additional services such as daily housekeeping, concierge services or access to pools or fitness centres. Airbnb tends to have a wider variety: some are luxurious offerings, but others may be just a spare room with minimal amenities.
Whether you opt for an Airbnb or vacation rental, you’ll need a vacation rental certificate before you can legally operate.
If your property has an annual rental value of $22,800 or lower, you must obtain your vacation rental certificate from Consumer Affairs. If its above that figure, you should get it from the Bermuda Tourism Authority. Both these government bodies have the authority to grant or deny certificates based on criteria such as property standards, health and safety requirements and local planning regulations.
Currently, the annual fee for properties with a rental value of $22,800 or lower is $1,500 for a vacation rental certificate; for those with a rental value between $22,801 and $90,000 it is $2,000; for those higher than $90,000 it is $2,500.
All property owners must pay an annual licensing fee to the BTA for each vacation rental property they operate, irrespective of whether they are licensed by the BTA or Consumer Affairs.
In addition, property owners are subject to a 4.5 per cent vacation rental tax on the rental rate charged to guests. This tax is typically collected by the platform and paid directly to the BTA.
Ms. Millett also pointed to liabilities regarding guest safety, privacy and data protection and property damage.
“Hosts are responsible for ensuring the safety and security of their guests,” she said.
“This includes providing emergency contact information, clear instructions on property usage and necessary safety equipment such as smoke detectors and fire extinguishers.”
“Hosts must comply with privacy laws when handling guests’ personal information, ensuring their information is protected and only used for necessary purposes.”
“Hosts should also take appropriate measures to safeguard their property and valuable possessions. Security deposits or insurance can help mitigate potential losses resulting from damage caused by guests.”
The maximum number of individuals allowed in one property at one time is ten. All hosts are inspected by the BTA every two years.
Contact your insurance company for guidance on guest house insurance, and also consider that third-party consents may be required. If you find any of this complicated or confusing, seek advice from the Bermuda Tourism Authority or legal counsel.
Ms. Millett strongly advised against cutting corners.
“Not abiding by regulations can damage a host’s reputation and trustworthiness,” she said.
“Negative experiences arising from non-compliance may be shared by guests online, affecting the host’s ability to attract future bookings.
“Adhering to the rules demonstrates professionalism and responsible hosting, leading to positive reviews and recommendations.
“Regulations are put in place to ensure the safety and security of guests and to maintain a certain standard of quality for Bermuda. By following regulations, hosts can ensure that their properties meet these standards and offer a good experience to guests.”
There can also be legal implications such as fines, penalties or injunctions. Operating a vacation rental without a licence, for example, carries a fine of up to $10,000.
Ms. Millett urged people to keep up with the continuously evolving legislative framework surrounding Airbnb and vacation rentals.
PRACTICAL POINTS AND COMMON MISTAKES
Cynthia Millett compiled the following pieces of guidance from Airbnb and vacation rental hosts in Bermuda:
• “Not having fast Wi-Fi. It’s as important as water for some guests. Some guests ask for the Wi-Fi passcode before the keys.”
• “Not having enough linen and supplies stock to clean thoroughly between guests.”
• “Not having proper pest control – unwelcome guests such as rats, roaches, centipedes and ants are a reality in Bermuda.”
TOP TIPS
• “Ensure that you have sufficient water in the summer and a washer and dryer.”
• “Have hard surfaces as carpets retain sand, stains and mould – tile and more tile and vinyl flooring.”
• “Be honest about your location and access to bus, grocery store and laundromat.”
• “If you are in an isolated area, have chargers for electric cars.”
• “Have sensor lights and /or security system so guests can find their way and they feel safe.”
• “Get a lock box for keys and have an arsenal of extra keys.”
