BTA Releases Vacation Rental Discussion Paper

May 21, 2015

In a just-completed discussion paper to the Ministry of Tourism and Transport, the Bermuda Tourism Authority [BTA] has recommended four improvements for the island’s vacation rental property market, with no taxation of homeowners proposed.

While the 23-page document, titled “Bermuda Accommodations: The Vacation Rental Property Market,” can be read on the BTA’s website, and is also below, with the document giving a broad overview of the market, estimated at $20 million in annual revenues. There is also a two-page executive summary that highlights the proposed recommendations.

“Those recommendations include a legislated vacation rental property definition, not based on number of occupants, mandatory safety standards compliance to protect visitors, a guest fee paid by vacation renters that is 2.5% of the cost of stay and equal to what hotel guests pay in Bermuda, and a voluntary registry of vacation rental properties that signifies compliance with mandatory safety standards and offers additional benefits to the homeowner,” the BTA said.

“Government regulators will decide whether to implement the recommendations, take a different course of action or to leave the industry unchanged.”

Karla Lacey, COO of the BTA and project leader on the paper, said, “Our working group listened to a variety of stakeholders, some of them with competing viewpoints, and in the end we think we have a list of recommendations that is focused on growing the vacation rental market segment going forward.

“This growth will provide revenue-earning opportunities to local families, while also providing safety standards to our visitors and a much-needed avenue for marketing Bermuda to a new generation of travellers.”

The executive summary states that in Bermuda there are approximately 273 vacation rental units with roughly 437 bedrooms, the equivalent of 11% of Bermuda’s licensed accommodation room count, and the “sector is largely self-regulating and currently operates with complete autonomy.”

Executive summary of the Bermuda Vacation Rentals discussion paper [PDF here]:

“Bermuda Accommodations: The Vacation Rental Property Market” follows in full below [PDF here]:

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Comments (13)

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  1. Truth is killin' me... says:

    Gummit wanna slice of da pie!

  2. MB says:

    I have to say I agree with them. it is an unfair playing field for hotels who are stuck with the tax. Home owners can also get far more per month renting as short term so thus why rent to residents who then wind up paying more pm due to shortages in certian catgeories

    • sage says:

      Hotels enjoy concessions will VRA’s get them too?

      • Sargasso says:

        Sage is exactly correct. The Large hotels get more than enough in concessions and direct benefits from Government and the BTA to make up for their 2.5% tax. The VR owner pays full retail and full duty on everything that goes into their rooms, from the building itself to the soap in the shower. The argument that it is somehow ‘fair’ that they be taxed equally is just bureaucratic bull***t. The ONLY thing the BTA proposes to do for the VR sector is to host a webpage and list the property (no bookings) for an extra fee of $250.-/yr. My feeling is that this is something they should be doing anyway and the basic listing should be cost-free.

  3. aceboy says:

    2.5% is a tax. A tax that can be passed on to the vacationers, who will in turn choose another location because the cost of their vacation just went up. The home rental market is very fickle when it comes to price.

    Or the owners can choose to eat it.

    It IS a tax, why deny it?

    • Sargasso says:

      Exactly.
      The extra revenue from the Tax, by the way, may be collected by the Tax Commissioner but it will go directly to the BTA and not toward Gov’t's general expenses. This little detail makes it clear how self-serving the BTA’s recommendations are. They are really about getting more money for themselves.
      It is a shame and a disappointment how, after less than a year, this “Authority”, which was supposed to be the nimble and effective alternative to the sclerotic and wasteful DOT (Department of Tourism), is more Bureaucratic than the DOT; and more self-serving too.
      Despite his involvment in the Reefs and Nine Beaches, I would have hoped for better from David Dodwell. To have this report so clearly reflect the interests and concerns of the Foreign-Dominated BHA ( Big Hotel Association) is just another disappointment. (Why was the BHA submission to the BTA on the VR sector not included as an appendix to the report?)
      Since when, by the way, do Governments delegate to quasi-independent organisations the authority to directly recommend legislation from which they will derive a direct financial benefit?
      At least in the bad old days of the DOT we could take the minister to the woodshed for this kind of stuff. Now all we get is the Innocent Shawn routine where we are assured that the BTA is totally independent of political interference, and this is a Really Good Thing (Big Smile)…..

  4. Triangle Drifter says:

    2.5% is not much. They are used to state taxes at home which are much higher. Better to market at a price that includes all taxes. The add ons are annoying on a bill.

    All well & good for the vacation rentals to pay but the BTA needs to promote them as well as the hotels.

    • Cranberry says:

      Well if 2.5% is not much – would you be ok with paying it for us???

    • Sargasso says:

      If it is not much, then why do it at all?………

      The BTA’s principal mandate ( and the vast majority of it’s budget) is to market the Island on behalf of the ENTIRE tourism sector. This does not and should never be construed to mean, only the Hotels or only the Big Hotels or only the Operators which it has funded. They are supposed to be selling the entire Bermuda Experience and the VR sector should no more be paying this tax than should the Taxis, Tour and Excursion Operators, Retailers, Restaurants, Attraction or Venue Operators, Ground Services Firms or anyone else who derives revenue from serving or selling to Visitors.
      The reason the Hotels pay the tax is because they clearly absorb more resources and benefit more directly than the rest. Just because a Visitor sleeps in a VR bed does not mean that this is true for the VR sector. As things are now, the sector absorbs far, far less resources and gets far, far fewer direct benefits from BTA activities than do the BHA members.

  5. Coffee says:

    Why should the BTA get anything ? Aren’t they a private entity ? Vacation rentals should pay higher land tax , payroll tax and pension . I wouldn’t give the BTA a fr****n dime !

  6. BDA Friend says:

    The future of tourism is not in back room home rentals. The product in Bermuda is too expensive and stale. It’s uncompetitive.

    • Sargasso says:

      If you find it too expensive and stale, Please don’t come!.

      It is far worse for our Tourism Industry to bring a visitor to the Island who does not value what we have, or cannot afford the price, than it is to have them not come in the first place.

      The thousands of Big Cruise Ship visitors who go home telling horror stories about waiting for buses or ferries and paying $2.75 for a coke or bottled water do terrible damage to our industry as a whole. The problem is not that we cant afford more buses and ferries (we cant) or reduce the cost of a can of soda (we cant); It is that these Visitors expected something we could not provide and were not comfortable with what things cost here.
      This is, by definition, bad marketing and bad management not poor product quality or bad cost control.
      The future of Tourism here, if there is one, lies with refocusing our marketing on people who value those things we bring to the table that no-one else can do as well and who can afford our cost.

      The VR sector has a very strong part to play in this. It provides, by far, the most intimate and personal access to real Bermudians – whether they are a retired couple renting their daughter’s old bedroom or Investors with a couple of condo’s to rent between tenants. People who value this kind of experience tend to be the same ones who value Taxi tours by real Bermudians, Restaurants with real Bermudian Food and real Bermudian staff, Historic venues that are less plastic re-creations and more genuine and staffed by volunteers who are interested rather than ‘associates’ who know little and care less, a clean and (relatively) safe environment that is that way because it reflects the character of it’s people. Not only that but they tell others; in person and otherwise. And, importantly, they find a place they like and they come back; again and again, sometimes for decades.
      There is also some cross-booking and a lot of cross-marketing. People who will book a VR stay for a three weeks or a month will often book a hotel stay for a shorter visit and their positive messages frequently inspire Hotel visitors to return or first time visitors to come and stay in hotels.
      The VR sector is, and will remain, a small part of our offering but the Bermuda experience is not made better by homogeneity, it has always been at it’s best when made up of a diverse mix of different components. In many ways this makes sense since it reflects our people.
      This assumes the OBA has the sense to trash the BTA recommendations and let the VR sector continue to develop without the stifling oversight it calls for.

  7. Watch for sub lets…