PM: SBDC to provide $2 million in support to vacation rental market

Pledging to expand direct support for Bahamians in the vacation homes market, Prime Minister Dr. Hubert Minnis yesterday announced that the government would make $2 million available through the Small Business Development Centre (SBDC) to support those seeking to enter and capitalize on the growing segment of the tourism industry.

The prime minister said the vacation homes market earned $14 million in March alone, benefiting 4,222 Bahamians. He said while thousands have already benefited, there is opportunity for thousands more to do so as more and more visitors book short-term rental accommodations for extended stays.

“To ensure that more Bahamians take advantage of the increased need for room capacity now and in the future, I am pleased to announce that I have directed the Small Business Development Centre to reserve a minimum up to $2 million to provide funding to support Bahamians who wish to enter the Bahamian home rental market. This new SBDC initiative will have built in covenants to ensure that successful applicants follow through on preparing these properties for guests and that they list the properties for short-term rental,” Minnis said while opening debate on the 2021/2020 annual budget in the House of Assembly yesterday.

“The program will also include consultancy assistance to help guide applicants on how to list and manage these properties successfully. The reality is that the emergence of the vacation home rental market creates a wonderful and extraordinary opportunity for more and more Bahamians to become owners and direct beneficiaries in the tourism industry. This is diversification within the tourism sector.”

Vacation rental bookings have steadily increased, up 24 percent in February, 65 percent in March and 37 percent in April compared to last year.

According to vacation rental data company AirDNA, there were 3,981 total active Airbnb listings in The Bahamas in March, the majority of which – 1,349 of them – were on New Providence and 359 on Grand Bahama. More data from the prime minister revealed that there are 498 vacation rental listings in Exuma, 409 in Central Eleuthera and 185 in Bimini.

“The COVID-19 pandemic taught many Bahamians about the importance of maintaining a diverse stream of income to remain resilient in times of crisis. Many Bahamians and residents have embraced this philosophy in recent years and have begun to invest in new streams of income in the vacation rental market, through popular online portals such as Airbnb,” he said.

The prime minister continued, “Bahamians might wish to convert existing homes to take advantage of this market. Bahamians might refurbish an ancestral home in one of the Family Islands. Bahamians might wish to collaborate with like-minded investors, pooling resources to build and rent accommodations and cottages throughout the country.”

The prime minister announced during his budget communication last week that the government is seeking to generate $31 million from charging value-added tax (VAT) on the full value of vacation rental properties, as opposed to the just the service charge on which VAT is currently applied.

The prime minister also announced the southern Family Islands would be designated special economic recovery zones and be granted tax concessions.

He encouraged those residents to also take advantage of the booming vacation home rental market.

“Bahamians in our southern islands will be granted a new slate of concessions like duty and VAT concessions on the full range of materials they will need to build or renovate a house, or to start or expand a business,” Minnis said.

“For the residents of these islands, there has never been a better time to invest in that cottage or to refurbish an ancestral home to welcome visitors from around the world and to become a direct owner in the hospitality sector. This is about ownership and it gives Bahamians the chance to retain a greater piece of the tourism pie. The emergence of platforms for online commerce now permits ordinary Bahamians to become owners in the hospitality trade and to explore so many other opportunities to deliver goods and services all over the world.”

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source https://thenassauguardian.com/pm-sbdc-to-provide-2-million-in-support-to-vacation-rental-market/