Ecuador: Online competition rattling nerves in hotel sector

Juan Pablo Vanegas, president of the Azuay Region Hotelier Association, has said that his industry has been seriously harmed in the run up to the important Carnaval celebrations by a large number of detected informal accommodation providers. These include private homes which offer cheap, short-term accommodation.

“They don’t pay taxes, and it’s unfair competition/ We pay social security for our employees, the Internal Revenue service, and Commercially-priced electricity. They don’t fulfil these obligations, so you can find rooms with them for as low as $15 dollars, while the cheapest hotel will cost $60.” said Vanegas.

Patricio Miller, president of the Azuay Region’s Chamber of Tourism, highlighted the role of foreign residents and long-term tourists as being to blame for the sector’s informality. “We thought foreigners were coming to spend their money, but that’s not the case. They have come, not to rest of be tourists, but to do business. And it’s in the tourism sector where they have proliferated. They buy houses and apartments and rent them out to their fellow countrymen through online web pages” he said, in reference to Airbnb and similar room-sharing services.

Lorena Escudero, a Zone coordinator for the Ministry of Tourism, revealed a six-month long investigation that sought to identify people offering these rooms through the internet, although she did not specify the number of hotels detected. “As a Ministry we can fine those establishments that aren’t properly registered, although they are first offered a 15 day period to do so.” Local authorities can immediately shut down any establishment where illegal accommodation is offered, according to the new Housing Regulations passed last year.

Full Content: El Tiempo

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.