Airbnb and CDMX Sign Occupancy Tax Accord

Travelers who book accommodation through Airbnb will begin paying a 3% occupancy tax in Mexico City June 1.

The city signed an agreement Wednesday with the online accommodation booking service, which will collect the tax and remit it to the city government.

The agreement responds to concerns by the hotel industry about an unregulated and informal system of lodging.

Given the numbers, it is not surprising that hotels are concerned.

Airbnb reports having 5,500 hosts registered in Mexico City last year, who welcomed 143,000 guests, a 174% increase over 2015.

It estimates that the economic benefit totaled 1.574 billion pesos through guests’ expenditures on lodging and other goods and services.

Mayor Miguel Ángel Mancera said the accord permits the city to work with Airbnb in a formal manner. Hotel owners, he said, did not want to see informal, unregulated activity in the hospitality industry.

The mayor also stated it was “a fact” that the service does not compete with hotels. “The users of this platform have a maximum average age of 35 . . . [and] they’re looking for another type of experience.”

In other jurisdictions, Airbnb has not been quite so accommodating, fighting lawsuits in the United States and elsewhere over housing-related issues.

But Bloomberg reported today that the company is taking an unusual approach in Latin America by giving governments what they want.

It said Airbnb intends to replicate the tax model throughout the region, which is now its fastest-growing market. It includes Mexico, South America and parts of the Caribbean, including Cuba, with 250,000 properties listed.

The company’s regional manager for policy, Chris LeHane, said agreements such as that with Mexico City allow communities to prosper and hosts to comply with their tax obligations. Those hosts, he said, are mostly middle-class citizens who offer their homes for rent for additional income.