By Joan Feliz
Special for El Inmobiliario
Throughout my collaborations with various media outlets, I have analyzed the impact that platforms like Airbnb have on Dominican tourism. It is a phenomenon we cannot ignore, since, while it has allowed for the diversification of accommodations, it also poses serious challenges to the sustainability of the tourism sector. The lack of regulation not only jeopardizes the large tourism projects that have sustained the country's economy, but also leads us to question whether this model is truly as profitable for real estate investors as it appears.
Airbnb and its threat to Dominican tourism
The Dominican Republic is a leader in the Caribbean thanks to a robust tourism model based on all-inclusive resorts, boutique hotels, and large real estate developments. However, Airbnb has made a strong entrance, offering a more affordable and, in many cases, less regulated alternative.
This creates unfair competition. While hotels and tourism developments comply with strict regulations regarding taxes, safety, health, and sustainability, many properties listed on Airbnb evade these obligations. This disproportionate advantage not only affects the ability of formal projects to compete but also reduces the country's tax revenue, jeopardizing high-impact economic and social investments.
Is Airbnb really that profitable for investors?
One of Airbnb's biggest draws is the promise of generating significant passive income. Many real estate investors have bought properties with the idea of turning them into short-term tourist accommodations. But is this model as profitable as it seems?
The reality is more complex. While daily rates may be higher than those of a traditional rental, the associated costs are also significant. Managing a property on Airbnb involves ongoing expenses for maintenance, cleaning, utilities, and management platforms. Furthermore, income is not always stable, as it depends on seasonality and competition in the local market.
In destinations like Punta Cana or Las Terrenas, where Airbnb listings have grown exponentially, market saturation can limit hosts' profitability. This is compounded by risks such as property depreciation and, in some cases, a lack of interest from local buyers due to the rising cost of real estate.
Social and urban impacts: a hidden cost
In addition to the economic effects, Airbnb's growth is negatively impacting local communities. In many tourist destinations, properties that were previously available for long-term rentals are now being booked for short-term stays. This has driven up housing costs, making it harder for local residents to afford it.
Likewise, the transformation of neighborhoods into exclusively tourist zones can erode the character and identity of these communities, stripping them of the elements that made them attractive in the first place. This phenomenon, known as tourist gentrification, is a real threat in places like Colonial Santo Domingo, Sosúa, and Cabarete.
The urgent need for regulation
As I've pointed out in previous articles, regulating platforms like Airbnb doesn't mean limiting their operations, but rather ensuring that all players compete on a level playing field. Regulation can include measures such as:
Require mandatory registration of properties on digital platforms.
Set a limit on the number of days per year that a property can be rented.
Apply fair taxes to the income generated by Airbnb.
Implement safety and health regulations, similar to those required for hotels.
Countries such as Spain, France, and Mexico have already adopted these measures, protecting local communities, ensuring tax revenues, and balancing competition in the tourism sector.
Conclusion: A sustainable model for all?
While Airbnb has democratized access to the tourism market, its lack of regulation poses a threat to Dominican tourism, one of our main sources of income. Furthermore, it is not as simple or profitable a model as many investors believe, especially when hidden costs and social implications are not taken into account.
Regulating Airbnb will not only benefit the hotel sector and the government, but also the investors themselves, by creating a more orderly and predictable environment. Protecting tourism is protecting our future, and establishing clear regulations for Airbnb is an essential step toward sustainable and equitable tourism development. It is time for all stakeholders to assume their responsibility and work together to preserve our country's competitiveness and its essence as a leading destination.
Author: Joan Feliz Valoys, MBA, digital marketing specialist, operations manager of Constructora Incaribe, with more than 10 years of experience in the construction and tourism sector.
