Private accommodation providers a serious problem for Narva hotels

Narva's hotels are in trouble as private individuals offer flats and summer houses to tourists (Pressimaterjalid)
6/10/2016 10:21 AM
Source: Rus.err.ee
Category: Business

The situation of the hotels in and around Narva has been difficult, as the number of tourists has decreased and more and more private individuals rent out their homes and summer houses through portals like Booking.com and Airbnb.

The hotels see these so-called sharing economy portals and their users as unfair competition, as the users don’t pay tax on the money they make, ERR’s Russian news portal reported on Thursday.

In an appeal to the Tax and Customs Board, the directors of Narva’s hotels wrote that considering the problems of tourism in Narva - the sudden drop in tourist numbers, the difficult situation of the local economy, layoffs, the decreasing purchase power of the local population - they as tax payers were worried that they would become uncompetitive, compared to others in the market making money while they didn’t even exist as official companies.

Those offering their homes and summer houses to tourists had neither employees nor managers, they wrote. They didn't declare social and value-added tax, and they were under no state supervision whatsoever.

This promoted the black economy and illicit work, and all for the sake of keeping the costs for the users of the sharing economy platforms low, the representatives of the hotels wrote.

They are asking the Tax and Customs Board to do something about the situation, such as demanding the annual registration of anyone offering accommodation and food service, and to regulate and supervise their activities.

“The situation is very difficult, and without the state’s help, we won’t survive,” Lauri Tamm of the Hotel Inger in Narva said to ERR’s Russian news portal.

There are officially eight companies in Narva that serve tourists, among them four hotels, two guest houses, and two companies that offer accommodation in rental flats. In comparison, on Booking.com, 50 accommodation establishments are listed.

“Most of them are ordinary flats in the city, and every day 10-15 of them find guests to put up,” Tamm said. “Why do I pay taxes, salaries, offer all my services according to regulations, but the owners of these flats do nothing of the sort, and there are no consequences for them?”

Press spokesman of the Tax and Customs Board Rainer Laurits said that they were aware of the problem, but that to solve it, they only informed the people renting out their flats that they needed to declare their additional income.

Editor: Dario Cavegn

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