Short-term lets like this Cape Town Airbnb may not be as profitable in the future as government tries to regulate them like hotels.
Image: Supplied
THE Airbnb golden goose may soon lay fewer eggs.
That’s because South Africa’s lucrative short-term rental market, which has netted millions for investors, now faces its first formal regulation as the government moves to oversee Airbnb and other home-sharing platforms.
The Department of Tourism has gazetted a Draft Code of Good Practice for Short-Term Rentals (STR) and invited public comment. If adopted, the Code will standardise regulations and require short-term rentals to follow rules similar to those imposed on hotels and guesthouses. Critics warn that this could significantly affect the market by reducing profits and discouraging investment in properties specifically acquired for short-term letting.
Tourism Minister Patricia de Lille says the code aims to guide conduct in tourism services, facilities, and products, and to promote sustainable tourism.
“Short-Term Rentals, including home-sharing platforms, have become a growing and established feature of South Africa’s tourism landscape,” de Lille said.
“By expanding accommodation options beyond traditional hotels, short-term rentals support geographic spread, enable more travellers to access diverse destinations, and create additional income opportunities for households and small property owners.” She added that local governments could consider the Code when addressing short-term rental issues, based on local context.
Figures from the Short Term Rental Association of South Africa (SASTRA) show that short-term rentals now make up around 50% of the country’s accommodation sector. SASTRA, which represents property owners, hosts, employees, and small businesses dependent on them, welcomed the objectives of the Draft Code of Good Practice: standardising service levels, guiding guest behaviour, and clarifying how digital platforms can support everyone for a positive experience.
“The code is noteworthy in aiming to support the beneficial impact short-term rental listings have on immediate communities, and mitigate negative impacts,” SASTRA said.
But the association warned the Code comes with significant gaps. The sector is the first in hospitality to receive a COGP, and SASTRA questioned why hotels, guesthouses, and B&Bs are not held to similar standards.
“The risk is that this ‘interim and non-binding’ proposal is a temporary document, is not implementable, and creates more confusion than cohesion,” the association said.
SASTRA also highlighted that there is no legal or official definition for short-term rentals in South Africa, creating uncertainty over who exactly falls under the scope of the code. “The code offers no means or suggestion of execution or measures of success,” the group added.
It pointed out that short-term rental operators are being held to a higher standard than hotels, guesthouses, and B&Bs, which are not required to adhere to this proposal. The association also noted that hosts are already required to comply with local by-laws, property zoning, tax legislation, and employee laws.
A 2025 host survey cited by SASTRA found that 80% of hosts are female, 52% are non-white, and 70% are not full-time employed, relying heavily on income made as hosts. The survey indicated that around 65% of hosts own their own listings, while the rest manage properties for others. Short-term rentals also employ an average of more than 2.5 people per listing, including housekeepers, maintenance tradespeople, and gardeners, said SASTRA.
Brett Herron, the secretary-general of GOOD, the political party led by Tourism Minister Patricia de Lille, said the code is “a good start to addressing housing unaffordability.” In Cape Town, where 70% of city-centre accommodation is now short-term rentals, rents and property values are rising far faster than salaries. The regulations, he said, could give hosts and travellers new opportunities while protecting residents who are being priced out.
However, Brett Tungay, national chairperson of the Federated Hospitality Association of Southern Africa (Fedhasa), called the Code “totally pointless” and a knee-jerk reaction from the Department of Tourism.
“We're not on an equal playing field. Hotels must pay commercial rates and taxes. We have to carry public liability insurance and comply with health and safety regulations. Short-term rentals pay residential rates, no taxes, no commercial compliance,” Tungay said.
He added that in some areas, Airbnbs have driven down rates by 30–40% and taken trade from self-catering resorts and hotels. The social impact of Airbnbs could be seen around the world where city centres are getting hollowed out, and all the residential property has all been converted to commercial, he said.
Tungay also criticised the draft code’s wording. “The definition of a short-term rental being a temporary use of a residence… is rubbish. Ninety-nine percent of properties that have been converted to an Airbnb will stay an Airbnb. Why are we trying to redefine terminology that has existed in the industry for decades?”
Rob Hutchinson, founder of Dear South Africa, which facilitates public participation in government policies, said the code is a precursor to a full overhaul of the Tourism Act. Mandatory regulations could follow, giving municipalities the power to reclassify residential properties as commercial, tripling rates and taxes, and imposing 90-day annual caps on rentals.
He warned that the code also targets the privacy rights of guests by making it compulsory for platforms to share identity, contact and biometric data with hosts and government authorities.
“Hosts will incur major expenses to comply with safety regulations, smoke detectors, and other requirements. Property rates could increase by 300% if deemed commercial rather than residential,” Hutchinson said.
Dear SA, which claims over 61 000 registered subscribers, said public responses to the code have been “overwhelmingly critical.”
“While the Department frames this as a voluntary ‘Code of Good Practice,’ our participants see it as a ‘thin edge of the wedge’ — a strategic precursor to mandatory laws that will fundamentally alter property rights in South Africa,” Hutchinson said.
Retirees commenting on Dear SA expressed concern that commercial-grade compliance requirements could make it unaffordable to rent out rooms or cottages. One host said: “I rely on short -term rental income to pay my mortgage and to survive the cost-of-living crisis. If this code becomes law, it could decimate the market for ordinary South Africans.”
Hutchinson said travellers also oppose the “hotelisation” of home-sharing. One guest, Gayo, said: “If I wanted to stay in a hotel, I would.”
“Mom-and-pop” hosts are the primary targets of this regulatory overreach, said Hutchinson. “We are calling for a tiered, rational approach that protects rather than punishes small-scale entrepreneurship.” He advocates for exemptions for homeowners renting a portion of their own homes, protection of guest identities, and a clear national definition of “short-term” to prevent inconsistent municipal bylaws.
Jamie, a respondent on Dear SA, summed up the frustration: “Back off before this 'code' becomes the law that kills the side-hustle.”