Nearshore Americas

Airbnb to Collect 3% Occupancy Tax from Mexico City Hosts

Hospitality service provider Airbnb has made a deal with the Mexico City authorities to collect 3% occupancy tax from residents who rent out their premises on its website.

This is milestone for Airbnb’s operation in the Mexican capital, where around 143,000 guests were welcomed by 5,500 registered hosts in 2015.

Hotel owners, who are already paying a 3% lodging tax to local officials, are reportedly angry, as they are concerned that Airbnb’s move would push down the lodging prices.

Some concerned parties have warned that the startup would disrupt the housing market by providing landlords with the incentive to turn apartments into unlicensed hotels, according to Bloomberg.

Airbnb has defended its service, saying it paves the way for hosts to comply with their tax obligations and that most of its hosts are middle-class citizens trying to earn some additional money.

Airbnb, often described as the Uber of hotels, has seen its bookings in Latin America increase 148% in recent years. The company is reportedly considering similar tax agreements in the rest of the region, starting with discussion with the governments of Buenos Aires and Sao Paulo.

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The company has 250,000 properties listed in the region, including the Caribbean, according to Bloomberg.

Like Uber, Airbnb is facing opposition wherever it goes. It is fighting court battles in Spain as well as the United States. But the company has little or no competitors in Latin America, except for Brazil’s Hotel Urbano.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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