The astounding number of Airbnb-listed properties in Cape Town has raised concerns about short-term rentals, regulations and the importance of balancing tourism with community benefits.

According to Inside Airbnb, Cape Town has 23 564 listings (exceeding the numbers in Berlin and Barcelona) that fetch an average price of R2 367 (€120.5) per night.

Airbnb says there are no specific short-term rental regulations in South Africa and that, in 2019, Cape Town implemented a by-law allowing short-term lets for a maximum of 30 days. Despite this, Inside Airbnb reports, its Cape Town listings receive an average of 41 nights per booking.

ENCA's Dan Corder Show claims the number of Airbnbs in Cape Town is contributing to a housing crisis.

According to an Airbnb spokesperson, listings on Airbnb account for less than 3% of housing in Cape Town – and Cape Town and Johannesburg are the top two origin cities for Airbnb renters in Cape Town.

Airbnb argues that 73% of its hosts say the extra income from their listings helps them cover rising living costs and almost half say it helps them afford their homes.

"Short-term rentals have significantly affected South Africa's tourism sector, generating thousands of jobs and contributing billions to the country's GDP. They also provide vital income for many South African hosts amid rising living costs. Short-term rentals may also offer a solution in regions where hotels or guesthouses may not be available, resulting in economic upliftment for communities that may not have benefited from tourism before. This could be in the form of tourism spending at local restaurants, coffee shops, pubs, general retailers, local transport, entertainment venues and more," explains Rosemary Anderson, FEDHASA National Chairperson.

However, Anderson admits that short-term rentals are also under scrutiny, accused of affecting housing affordability and impacting communities negatively.

"The challenge now lies in effectively managing demand while balancing the benefits of short-term rentals with their potential effects on housing and local communities," she says.

According to Gustav Visser, Professor of Geography and Environmental Studies at the University of Stellenbosch, and expert on urban development and gentrification, short-term rentals are driving up property prices because these property values are being measured against their Airbnb-ability.

They are attracting more middle- to higher-class tourists to areas that were previously considered by local low- to middle-income individuals.

But, explains Visser, the issue of gentrification is more complicated in Cape Town as it is a tourism-dependent city. While some tourist accommodation in Cape Town was created by transforming rustic areas into trendy tourist attractions, particularly in the City Bowl, many of Cape Town’s new developments and property acquisitions have been created to expand tourism offerings in line with government policies.

"If unchecked, the growth of short-term rentals could risk transforming vibrant neighbourhoods into transient zones, potentially diminishing a city's unique charm. To mitigate over-tourism and ease tensions between visitors and residents, a balanced approach is necessary," says Lee-Anne Singer, FEDHASA Cape Chairperson.

Anderson notes that South Africa's tourism sector between January and June 2024 had only recovered to 85% of its 2019 levels. For this reason, it is essential to continue attracting visitors to bolster the economy and create jobs.

Noting the experiences of destinations like Barcelona grappling with the effects of short-term rentals and over-tourism, South Africa is in a unique position to learn from global experiences and not repeat their mistakes, says Anderson.

"We need to ensure that government and local authorities implement sustainable tourism policies that protect the economy, local communities and residents' rights while simultaneously providing attractive accommodation options for tourists. This approach necessitates frameworks that safeguard all stakeholders."

Singer recommends government regulations such as caps on short-term rentals and mandatory registration. Additionally, positioning lesser-known regions as attractions rather than focusing solely on cities can disperse tourist numbers more evenly, benefiting smaller towns and communities with local tourist spending while preserving the character of popular urban areas.

This strategy expands tourism offerings while alleviating pressure on major hotspots. It fosters economic development in lesser-known regions and promotes a more sustainable and inclusive tourism model, explains Singer.

"Balance is key as we need to protect communities and sustainably grow tourism, which is a massive job creator in our country with the highest unemployment rate in the world," Anderson points out.