AirBnB signals new Latin America strategy with Mexico City deal

Global Business

Airbnb has a new deal with Mexico City, that hints at a new strategy for the home-sharing service. The company will soon start collecting taxes from guests.

AirBnB is still involved in numerous court battles and lawsuits, as other regions struggle to regulate the firm.

CGTN’s Denny Alfonso reports.

AirBnB signals new Latin America strategy with Mexico City deal

AirBnB signals new Latin America strategy with Mexico City deal

Airbnb has a new deal with Mexico City, that hints at a new strategy for the home-sharing service. The company will soon start collecting taxes from guests.

Beginning June 1, Airbnb will charge a 3 percent tax on revenue generated from bookings in Mexico City – and pass those funds to the local government. Hotels here paid the same lodging tax. Vladimir Palacio, who makes an average of $1200 a month hosting on Airbnb Mexico, said it’s a fair deal.

“I really like that Airbnb is helping us to pay this tax to the local government, and the government is not in a direct fight with Airbnb but it’s trying to find solutions to make it work,” said Airbnb Host Vladimir Palacio.

The move corresponds to tax code reform the city approved last December. In 2016 the company generated more than $84 million in economic activity here in the city.

While some hotel operators aren’t happy with the deal, fearing it will only increase competition, local officials said Airbnb caters to a different market.

“The service does not compete with hotels, since the users of the platform have a maximum average age of 35 and they’re looking for another type of experience,” Mexico City Mayor Miguel Angel Mancera said.

Airbnb is seeing explosive growth across Latin America — now its fastest-growing market. Figures for Mexico City alone show 5,500 hosts registered last year, serving 143,000 guests.

And Airbnb continues to expand globally. The company recently announced additional agreements with local governments in India and China – including Shanghai, where it is implementing its “Trips” service that exposes travelers to local food and traditional events.