New rates law would unfairly target B&Bs

Posted On Wednesday, 20 July 2011 02:00 Published by
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Bed and breakfasts would be unfairly targeted by the Property Rates Amendment Bill and that would damage the tourist industry.

By Paul Vecchiatto

Bed and breakfasts (B&Bs) would be unfairly targeted by the Property Rates Amendment Bill and that would damage the tourist industry, says Michael Bagraim of the Cape Chamber of Commerce.

In a letter to the Department of Co-operative Governance and Traditional Affairs, the chamber said B&B establishments played a vital role in accommodating tourists during periods of peak demand when hotels cannot cope and that they had become an essential part of the tourist industry.

Bagraim said that in most cases B&B accommodation was seasonal and used for just a few weeks each year.

"It seems to the chamber that it is grossly unfair to apply commercial rating for 12 months of the year when the accommodation is used for not much more than a month," he said.

Bagraim added that B&Bs were vital in helping the tourist industry to deal with the peak demands created by event tourism such as the Argus Cycle Tour or the Two Oceans Marathon. In this way B&Bs complemented the hotels which require reasonable occupancy throughout the year in order to remain viable.

If hotels were required to provide all the accommodation for periods of peak demand they will have excess capacity during off-season periods and this will force them to charge higher tariffs with an adverse effect on tourism.

Bagraim said the availability of B&B accommodation helped persuade FIFA to stage the 2010 World Cup in SA as they were important assets and should be encouraged rather than punished with commercial property rates.

"In addition B&Bs spread the benefits of tourism into the suburbs and townships. This creates a friendly and welcoming climate for tourists and it helps to bring them back on future holidays."

Bagraim said the bill should differentiate between small establishments providing seasonal accommodation and those providing more extensive accommodation on a commercial basis for 12 months of the year.

The definition of residential property in the bill should be changed as it gave the impression that the owners of all rental accommodation would have to pay commercial property rates and that this would more than double monthly rates accounts and force rents up, Bagraim said.

Source: I-Net Bridge

Publisher: I-Net Bridge
Source: I-Net Bridge

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