MVA running after BnB’s
The Marianas Visitors Authority has linked up with the Department of Finance and the Office of the Governor to go after what it describes as illegal lodging establishments that are operating around the island without paying taxes.
Despite the continuing need for additional rooms to accommodate the increasing number of tourists, MVA brought up concerns regarding what it says are illegal bed and breakfast establishments around the island.
“We need to have more rooms. We really need to have high quality premium rooms, to actually attract high quality premium customers. Another concern that has been brought up to our attention are the bed and breakfast issue,” said MVA managing director Chris Concepcion.
He said that there are numerous bed and breakfast establishments operating as hotels on Saipan without paying the hotel occupancy tax.
“I have met with the Department of Finance and the Governor’s Office. They are putting an enforcement team to crack down on these illegal BnB operators,” said Concepcion.
“They are definitely not paying into the hotel occupancy tax, but they are functioning as hotels. These people come in for 3-5 days, sometimes a month, and they don’t pay the hotel occupancy tax. That cheats us of our funding,” he said.
Gov. Ralph DLG Torres thinks the same.
“There is a task force and we have been meeting with respective members of the MVA and we are coming out with an enforcement task force on how to address the issues that we have before us,” said Torres.
Torres did clarify that the aim of the task force was not to completely eradicate the illegal lodging establishments, as he sees these as additional rooms to serve tourists.
“They have to be taxed properly, so we’re not saying don’t do it. We’re saying that it has to be taxed. If you own a BnB [bed and breakfast] and you fall in that category, we’re not discouraging that. We’re just encouraging that you pay the proper taxes, the hotel occupancy tax. Even if it is just a bed and breakfast establishment, you still have to pay tax,” said Torres.
If you go to a certain website, and you search Saipan and put in a random date, you will see hundreds of rooms available for rent that are not hotels; they are houses and apartments. These are being converted into BnB’s, which ideally are not for long-term stays. Vacation rentals are what they are, and they don’t pay the taxes.
“Torres did clarify that the aim of the task force was not to completely eradicate the illegal lodging establishments, as he sees these as additional rooms to serve tourists.”
WRONG. You DO want to eradicate all the illegal lodging establishments. Just make them abide by the local laws and they become legalized, therefore eradicated as illegal businesses. If you say you don’t want to get rid of the illegal ones, they will take your words to mean that there is a way to stay in operation illegally.
Good luck to MVA, DoF and OoG. What you can do? How you are going to “crack down” on said BnB operations. I am sure that those are “mom & dad” operations. Would you dare to evict people, who probably, are mostly locals from premises utilized for said operations? And the prospect “crack down team” will become another source of injustice. Team members have uncles and aunties, brothers and nephews around the island. They will decide on whom “to crack down” and who should walk away. There are many illegal practices in Saipan tourism and hospitality industries. Why BnB got such close attention now?
I believe those that is or are being target are the upscale beach front dwelling or dwellings and it is mostly own by foreign national or nationals. That is why BnB got such close attention now.
I am involved with tourism and in some degree with hospitality. To my knowledge, BnB business attracts both locals and foreigners. People just want to do some backs. I think that the law should require something what is comfortable for people. Intention as it is presented will cause many confusion and non clarity. For instance, Saipan Airport finally came to understanding that make a car parking free is more economical as a paid parking because a parking rate did not cover expenses. So, that the BnB law will require (as it is usual on Saipan) an anti-BnB commission (with some budget), “crack down” team (with payroll). In order to finance this new organization the penalty for illigal BnB and registration for legal BnB will be so high that some operations will just shut down and other would just dive deeper. I even do not mention that anti-BnB would create instant kickback system.
Buenas naisur,
I strongly agree with your comment above and the CNMI government should take a different approach when addressing the BnB concept. I love traveling and I usually stay at a low cost housing arrangement for backpackers or hostel. And such concept may be viable in the CNMI and I had acquire properties in the CNMI to do just that in the future, but if our government continues to be anti business, our partners would be better off staying clear from doing business on our island chain.
Si Yu’us Ma’ase