Pictured is an Airbnb rental in the Parktown suburb of Johannesburg, South Africa. Airbnb

Skift Take: Airbnb is booming in Africa, but the first cracks in the success story are beginning to show – in hotels griping about the lack of regulations, and locals priced out of prime property. Can African cities avoid the side effects of the sharing economy that already blight more-developed markets?

— Richard Holmes

Editor’s Note: Gateway is a Skift series featuring first-hand, original stories from our correspondents embedded in cities around the world. The logo reflects where the correspondent is based and not necessarily the article’s focus. Read about the series here.

As millennial travel takes off and domestic tourists hunt for holiday discounts, Airbnb is booming in Africa. Admittedly off a low base, the continent is amongst the fastest-growing regions for the home-sharing service, with over 100,000 listed properties hosting more than two million travelers over the last five years.

Those figures come from a recent released by Airbnb, which is keen to highlight the positive effects of the sharing economy on grassroots tourism. Chris Lehane, Airbnb’s global head of public policy and public affairs, talked about the study in Johannesburg last month and committed the company to investing $1 million in community-led tourism projects over the next three years.

The Pros and Cons

And it’s hard to gripe at the success of Airbnb in Africa. On a continent where economic opportunities are often limited, the chance to monetize a spare room – a typical host earns $,1500 per year, says Airbnb – is not to be missed.

“Home sharing is healthy tourism by virtue of being not only inclusive, but also sustainable, helping people create new economic opportunities for themselves in the homes and communities where they live,” said Lehane, who also signed a collaboration agreement with the City of Cape Town to promote the city globally and encourage community-led tourism.

The sharing economy “is a global phenomenon and we must embrace it to help previously disadvantaged communities, to close the gap that exists in the tourism space,” added Barba Gaoganediwe, head of destination promotions and marketing for the provincial Gauteng Tourism Authority. “Established operators have the lion’s share of the tourism business. Services like Airbnb help to open up the market, to bring in new players.”

He’s not wrong, but it’s not all smiles and handshakes. That wholesome notion of homesharing has often morphed into property investing and, as seen in major cities worldwide, Airbnb has been accused of pushing up property prices and driving down rental stock for locals in sought-after suburbs.

Formal hotels are equally unimpressed, with growing concerns over the gray area in which Airbnb operates.

“We welcome competition provided it is fair,” said Tshifhiwa Tshivhengwa, CEO of the Federated Hospitality Association of Southern Africa, a trade organization representing hotels across the region. “What we have now is a segment that doesn’t want to play on the same field and by the same rules; they want their own set of regulations. We would like Airbnb to ensure that any listing in their website is a legitimate business providing accommodation.”

Crackdown in Suburbs

The key here is that word “legitimate.” At the same time Cape Town is welcoming Airbnb with open arms, authorities are cracking down on illegal listings in some of the city’s most sought-after suburbs.

The scenic Atlantic Seaboard that runs from downtown to the glamorous beaches of Camps Bay and Clifton is lined with upscale apartment blocks that are prime fodder for lucrative short-term rentals via Airbnb. Just one catch: It’s against the law.

While renting a spare room in a home is allowed, “in terms of municipal planning by-laws, a block of flats cannot be used for holiday accommodation or hotel purposes,” warned Brett Herron, the city’s mayoral committee member for Transport and Urban Development.

South Africa is not the only country in Africa where alarm bells are quietly starting to ring.

Over the border, the government of Namibia – not to be confused with Nambia – has warned homeowners that they risk prosecution if they fail to register an Airbnb rental property with tourism authorities. Local law stipulates that any accommodation provider with two or more bedrooms needs to register with the local tourism board.

“We need to guarantee the health and safety of guests, but we cannot do that if the accommodation is not registered or regulated,” Namibia Tourism Board CEO Digu Noabeb told Reuters in an interview.

This definitely isn’t the beginning of the end for Airbnb in Africa’s tourism economy, but perhaps it is the end of the beginning. Long may the tourist dollars trickle down into local communities, but those halcyon days of playing fast and loose with the rules might just be over.