SANTO DOMINGO. -Majorie Hasbun, an expert in short-term rental property management, believes that this market in the Dominican Republic has been "cannibalized" by people entering the sector, even setting rates that do not correspond to reality and that damage the business.
“Something has happened, and that is the issue of market cannibalization. There are people who, simply by renting, have damaged the market by devaluing it, by setting absurd rates for the type of property they have and the area where they are located,” he responds in an interview with El Inmobiliario, regarding the complaints published on this portal about the problems faced by families with people who rent through Airbnb.
He notes that guests obviously go where there are economic advantages, and that perhaps the clientele being attracted isn't ideal. Or that perhaps the necessary vetting process isn't being done to determine if a guest is a good fit. “Not everyone takes the necessary precautions because, as a host, you can see if a guest, for example, has previous reviews, if they followed the rules, if there are reports in the reviews that they didn't behave properly, or if they engaged in prohibited activities. That will depend a lot on the host and how they're managing short-term rentals on their property,” Hasbun stated.
The expert holds a degree in Hotel Management with a specialization in Marketing from the Pontifical Catholic University Madre y Maestra, which she graduated in 2017. Since then, she says, she has been involved in the tourism sector. Her company, Behosted, manages properties for short-term rentals.
Regarding the issue of mixed short-term rentals where there are people living in the buildings, he believes it is a matter for the condominium administration and the construction companies, and that owners should review it when buying a property.
“I understand that these cases are occurring mostly in older residential areas that didn't have these regulations because the market wasn't as developed as it is now, experiencing constant growth. So now there's this kind of shock, and I understand that measures are being taken based on what this has been causing,” he emphasized.
He argues that there are properties that do not allow new owners to rent them out through Airbnb.
The regulation
Hasbun believes that the regulation of short-term income in the Dominican Republic is very close and that "this has been discussed for some time now, I even think that at the beginning of the year there was news that yes, it is already a fact that taxes on short-term income will be increased due to the issue of unfair competition.".
He believes the measure would affect the market because it will definitely alter the final price for guests, as it's an extra charge. "We would have to rethink the issue of perhaps lowering the rental price a little, or simply adapt, like everything else, because in other countries, short-term rentals have been taxed for a long time, practically since the beginning.".
Seasonal business
One piece of advice Hasbun gives to potential investors is to keep in mind that this is a market heavily dependent on seasons. “It’s very seasonal; you can’t guarantee a monthly income. It’s highly variable. There are high seasons and low seasons, and to operate efficiently and be successful in this business, you have to adapt to the demands and the seasons. This is done by constantly studying the market, observing how rates and occupancy levels fluctuate, and how demand is shaping up. Then, you adapt to that in order to maintain occupancy and be successful,” he points out.
It stands out as a value that at the end of the stay the client has the opportunity to evaluate how their experience was from the arrival process, the cleaning and all the important parts that people take into account when booking a property.
“That’s why it’s so important to operate efficiently, because reviews affect us both positively and negatively depending on the comment. Likewise, we as hosts can evaluate guests because, just as there are good ones who follow the rules, there are others who don’t, and we have the ability to assess that. This is important for other hosts when one of their undesirable guests requests to book one of their properties, so they can see the review we’ve written and decide whether to accept that type of guest or not.”.
Hasbun recommends that anyone considering investing carefully research the area and observe how demand behaves. “I’m very frank and I always tell people: look, if you’re thinking of taking out a million-dollar loan to buy and furnish a property so that you can pay off the loan and still have extra money each month, well, if that’s a sacrifice you’re going to make, don’t do it, because it’s very unpredictable. It’s true that there will be months when you can reach that goal, but there will be others when you might not, because not all seasons are high; it’s very unpredictable,” she emphasizes.
