Puerto Rico government officials and representatives from hospitality company Airbnb signed a tax collection agreement that is expected to generate some $2 million a year for the island’s economy in the form of room taxes, Gov. Ricardo Rosselló announced Thursday.
Beginning Aug. 1, Puerto Rico’s estimated 4,300 Airbnb hosts — who welcomed more than 250,000 guests to the island in one year — will begin collecting the 7 percent room tax and remitting it to the Puerto Rico Tourism Co.
Additionally, Airbnb and the government signed a Memorandum of Understanding to help grow tourism to the island, share aggregate data and establish a stakeholder working group to meet regularly.
To date, Airbnb has signed more than 275 similar agreements and remitted over $240 million in relevant taxes to states and municipalities globally. This tax agreement will ensure greater compliance on the part of hosts and ease the administrative burden on the island, executives said.
Airbnb has more than 7,100 listings in Puerto Rico. From June 1st, 2016 to June 1st, 2017, Airbnb welcomed more than 250,000 guests, an 83 percent increase from the year prior.
In 2015, hosts in Puerto Rico netted $16 million and more than $28 million in 2016, with the typical host earning $5,700 in one year. Up to June 1, 2017, the economy has netted $23 million; with the exponential growth of hosts, these figures could multiply for the next year, the company said.
“Puerto Rico is open for business. Airbnb is an accommodation alternative that more and more travelers use to coordinate their stays and our island is no stranger to this trend. I would like to thank Airbnb for contributing to the economic development of Puerto Rico,” Rosselló said.
Thursday’s announcement marks Airbnb’s second tax agreement in the region; last month, Airbnb and the U.S. Virgin Islands signed the region’s first. These agreements signify growing recognition among Caribbean policymakers and officials that home sharing is a powerful tool to foster local economic growth and promote unique tourism.
Chris Lehane, Airbnb’s head of Global Public Policy said “home sharing in Puerto Rico is helping to spread the benefits of tourism, including making it possible for Puerto Rican families to earn extra money by renting out their homes. We’re excited to work with the Office of the Governor on an agreement that will bring new revenue to the island. ¡Vamos Puerto Rico!”
Meanwhile, Puerto Rico Tourism Company executive director, José R. Izquierdo, said “This important agreement will allow us to collect room occupancy tax on bookings made through the Airbnb platform, thus instantly increasing available capital to strategically reinvest into our visitor economy.”
“Consumers are looking for authentic experiences and want to have a variety of alternatives in planning their trip. As a tourist destination, we must actively respond to visitor’s desires as we help prepare our industry to compete in a changing economy,” he said.
Over the past year, Airbnb has entered into tourism partnership agreements with Jamaica, Grenada, Anguilla, Bermuda, Curaçao and Aruba. Earlier this year, Airbnb partnered with the Caribbean Tourism Organization to develop policy principles and recommendations for home sharing across the Caribbean.
Carlos Mercader, executive director of the Puerto Rico Federal Affairs Administration, said “the PRFAA office is actively seeking the opportunities available to enter into relationships that will benefit the people of Puerto Rico. This alliance established today between Tourism, Gov. Rosselló’s administration and Airbnb is a step forward in getting more resources for the people.”