On the 7th of November 2022, the European Commission adopted a proposal for a Regulation for new rules on short-term accommodation rentals (STR). The rules aim to create more transparency in the short-term private rental accommodation sector. Having risen in popularity in Malta and across the EU, alternative private short-term rentals brought huge benefits to hosts and tourists, but the new model also raised several new challenges to other accommodation operators and local communities. For instance, short-term rentals contributed to increased demand for real estate development with a consequential impact on housing prices and the environment.
The Malta Business Bureau welcomed the proposal for an STR regulation given that this economic activity remains generally unregulated or without sufficient enforcement, to the detriment of legitimate businesses.
MBB President Alison Mizzi stated that, “having a Europe-wide level-playing field through clear and simple rules for the registration and compliance of short-term rentals is essential and everybody stands to gain. Tourists will continue benefiting from a wide range of accommodation choices, traditional accommodation providers can compete on a fair level playing-field, and public authorities will have a more robust legal backing in gaining access to data, which will contribute to a more sustainable tourism ecosystem.”
MHRA President Tony Zahra outlined that, “Hotels and other accommodation providers must adhere to strict regulations to be compliant and in accordance with existing laws and regulations which ensure the safety and wellbeing of guests. MHRA has been vocal over the years at the rampant disregard of these strict rules and regulations by non-licensed and non-compliant accommodation owners who not only fail to abide by these regulations but also fail to pay Vat, Income tax, and Eco-tax on earnings. This has the effect of possibly having substandard accommodation which affects the quality of the Maltese product and a great loss to the exchequer.”
Mr. Zahra added that, “A recent report compiled by Deloitte entitled Carrying Capacity Study of Tourism in the Maltese Islands found that if all the beds available today and those applied for are approved, Malta would need 4.7 million tourists staying an average of 7 nights to achieve an 80 per cent occupancy throughout the year. If one adds the unlicensed and unregulated, then the number of tourists that is required is increased proportionately.”
Mr. Zahra concluded that “It is the Government’s job to ensure that all accommodation providers are compliant with the laws and regulations in force and to take immediate action to ensure a level playing field for all providers of accommodation.”
The STR regulation aims to create a framework which enables public authorities to receive accurate data from online intermediary platforms on users listing short-term accommodation rentals, the number of rented nights, and of guests. This will enable them to use this information to draft and implement better and more effective policies.
The STR regulation is also proposing for the setting up or updating of existent local registration systems that will generate a unique registration number per property. This will need to be displayed on online platforms and verified.
The Malta Business Bureau will be following the EU negotiations in the coming months as well as analyse the proposed regulation in more detail in ensuring that it is aligned with the Maltese businesses’ interests.