If there’s one thing the government is good for, it’s that you can lobby them for regulations to make sure you’re the only game in town. When you do things the way they’ve always been done and your competitors start turning the screws on your business by coming up with newfangled, unnatural ways of doing things, who better to complain to than those who have never run a business in their lives, but write the rules for those who do?

The hotel industry in South Africa, led by the Federated Hospitality Association of South Africa (Fedhasa), but supported by smaller cartel representatives such as the Tourism Business Council, is in just such a pickle.

You see, the business of selling accommodation has always been about squeezing thousands of tiny rooms into big ugly buildings, with dirty carpets and panoramic views of highways and parking lots. It’s about the feel of heavy-duty linen that smells of the residue of industrial-strength soap. It’s about stale breakfast buffets made in industrial kitchens by hair-netted staff who sneeze on the food, shared with people who use their hands instead of the tongs. It’s about anonymous bars where you can enjoy double-priced drinks in the company of drunk businessmen and prostitutes. It’s about employing thousands of staff to get room service orders wrong and knock on doors at the most inconvenient times. Everyone who is anyone in the hotel business knows this is just how it works. It’s always been this way and hotels charge thousands of rand a night for the burden of having to put up with guests.

But that perfectly fine business model is now being threatened by annoying upstarts who don’t know what’s good for their customers and fool them with convenient booking, great locations, lovely views, fresh meals, discreet and personal service, unrestricted access to both positive and negative customer reviews, and worst of all, tantalisingly competitive prices.

When you’re getting away from home, who wants an actual “home away from home”, when you can have a dingy hotel room for only four or five times the price?

These greedy charlatans, many of whom pose as innocent pensioners or middle-class hipsters, and whose buildings often don’t even have a second storey, let alone a fire hose reel, are taking the food out of the mouths of multinational hotel magnates who are just trying to do an honest day’s business by giving guests what the government says they want, how the government says they want it.

So the hard-pressed owners of hotels and large guest houses turned to the government and asked them to crack down on these irritating, underhanded new competitors. Luckily, government officials are always ready to defend the interests of big business against small competitors who didn’t even show proper subservience by asking the government for permission to let their rooms, lofts or granny flats.

The president, Cyril Ramaphosa, has said that he sees no reason why the tourism industry cannot double in both the number of jobs it creates and the number of tourists it attracts.

In 2018’s State of the Nation Address, he said:

“This year, we will enhance support for destination marketing in key tourism markets and take further measures to reduce regulatory barriers and develop emerging tourism businesses.”

To the relief of the hotel industry, in 2019, Derek Hanekom said fuck that.

Instead of listening to his president, he took the advice of “industry representatives”, who happen to represent the old guard and not the new competition, and gazetted a bill empowering himself to regulate emerging tourism businesses. They will regret ever having dared to offer prices and quality that those stupid tourists prefer, over perfectly adequate and much more expensive hotel rooms.

The Tourism Amendment Bill of 2019 is primarily aimed at protecting the hotel industry from the rising popularity of Airbnb, but will also crack down on other short-term home rental providers. It contains only the actual amendments, so it’s impossible to read without referring to the Tourism Act of 2014.

It grants the minister a new power, to determine “thresholds with regards to short-term home rental”.

It does not specify the nature of these thresholds, or how they will be applied. Since it is already a requirement to register for VAT if you earn more than a certain threshold from customers, the regulations contemplated in the Tourism Amendment Bill refer to something beyond merely registering as a business and paying tax.

BusinessTech quoted a spokesperson for the Department of Tourism as saying, “These thresholds are not about being hard on (Airbnb) owners, but making sure that everyone gets their fair share. If the guy in the Airbnb gets 13 nights, and the guy next door gets nothing, then he knows that he will get his chance when the Airbnb reaches its threshold.”

Short-term home rental businesses could be restricted in terms of the duration of stay, the number of nights a year the property may be occupied, or the revenue that may be earned, before it is weighed down with government-prescribed norms and standards, registration, licences and rules. That way, registered guest houses and hotels won’t feel hard done by.

The idea that the government ought to regulate business so that “everyone gets their fair share” is total nonsense. Nobody is entitled to a given number of customers, or a certain profit margin. Nobody is entitled to anything other than what they can convince customers to part with in an open market. If one short-term rental host is better than another, it deserves all the business it can handle and the shitty host next door deserves nothing. That’s how the market tells him to pull up his socks and do better.

But no, the market will get to determine nothing. The Tourism Act empowers the minister to determine “norms and standards”. They could include, but are not limited to, the form of business and management that must be applied, business hours, facilities that must be available, staff and training requirements, information and displays that must be offered, and signage and identification that must be used.

Customers will end up paying the cost of these new short-term home rental regulations, as they do already when they book hotels. Forcing Airbnb hosts to raise prices is terrible for tourists, but it is a wonderful help to traditional hotel chains and guest houses, who otherwise might have been forced to cut prices and reduce their profits. They should be grateful they have the government to protect them from the awful reality of customer choice.

The new regulations will murder any successful short-term rental operators in their cribs. Instead of innovation in hospitality, the government will impose rules, standards and conformity so nobody can complain of “unfair competition”.

The Tourism Amendment Bill also requires the minister to establish a national grading system for tourism, certifying the standards and quality of tourism services. The Tourism Grading Council, which has hitherto rather badly administered the voluntary star-rating system, is to be folded into South African Tourism, which is the new name of the South African Tourism Board.

So instead of having to rely on the reviews of guests who cannot punctuate their way out of a paper bag, tourists can now rest safe in the knowledge that the government knows what’s best for them. Conversely, property owners will enjoy the relief of not having to bother maintaining or improving standards once the grading has been bought and paid for because no dissatisfied customer is able to take those stars away from them.

Hotels and established guest houses argue that upstart competitors should operate under the same regulations that they do already. Regulation must serve a purpose, however. The Department of Tourism is not drowning in complaints from disgruntled Airbnb clients who are unhappy and feel they have nowhere to turn. The customer review systems employed by platforms such as Airbnb actually work much better than regulation at ensuring that guests know what to expect and are treated well.

The answer to the problem is not to regulate everyone just to be fair. It is to remove regulation where it is not needed. The goal is to “reduce regulatory barriers and develop emerging tourism businesses”, as Ramaphosa said, not to grant the minister unrestricted powers to impose regulations that will stifle innovative small businesses.

Airbnb is a highly successful model, which has earned hosts billions of rands, created tens of thousands of jobs, and contributes many billions to the economy every year. It poses no threat to its customers. On the contrary, it gives customers a wider range of choices at a wider range of price points. There is no need to regulate these businesses.

The only reason to regulate them is to protect the established guest house and hotel industry, and protecting the big business is never a good reason to regulate.

Big businesses thrive on lobbying for onerous regulations that they know they can easily meet because they employ scores of lawyers and compliance officers, but which make it harder for rivals to compete. It is a widely practised business strategy around the world.

Protecting big business is not the government’s business. There is no good reason to regulate short-term home rentals, so there is no need for a law that grants the minister of tourism carte blanche to regulate them as he sees fit. That is a recipe for letting big business capture the power of the state in order to stifle small competitors with fresh ideas.

The Tourism Amendment Bill is the exact opposite of what Cyril Ramaphosa said he would do. Clearly, it was smart not to believe his promises in the first place. DM

The Tourism Amendment Bill is open for comment until 11 June 2019. Comments can be directed by email to Mmaditonki Setwaba. For further contact details see the notice in the Government Gazette.