EconomyFinancialWhat is happening with Airbnb in Mexico?

What is happening with Airbnb in Mexico?

The boom in remote and hybrid work modalities has boosted the spending of hosts on the Airbnb hosting platform in Mexico, which have already exceeded pre-pandemic levels through the growth of a particular segment: that of digital nomads .

This type of worker, who performs their work remotely in cities or countries other than their residence or where their employer is based, has grown considerably. Currently 20% of stays on the platform in Mexico are long-term , which represents a growth of 54% compared to 2019 levels, says Ángel Terral, country manager of Airbnb in the country.

“Mexico has been very successful in this competition to attract digital nomads, something that many countries in the world are eager to do,” explains the manager in an interview with Expansión . “Mexico has competitive advantages in terms of its proximity to the United States, and having a similar time zone .”

Within the total reservations, the remaining 80% is made up of stays of less than 28 days .

In addition to a growth in the digital nomad segment, guest spending in Mexico rebounded 46% in 2021 compared to 2019, which was $2.5 billion higher than pre-pandemic levels, according to data from Oxford Economics.

In parallel, indirect spending in Mexican destinations shows a higher proportion compared to direct spending on the platform.

For every $10 spent on accommodation, Airbnb guests spent an additional $39 on other businesses during their trip . Additionally, according to data from Oxford Economics, the expense associated with 1,000 stays for a year directly drives the creation of 10 jobs in Mexico with wages, salaries and other income totaling $108,000, excluding host income.

These jobs are in sectors such as restaurants, stores, transportation providers, and other services and attractions.

“Mexico plays an important role worldwide. It is a tourist power, it did not close borders and this gave it a great competitive advantage, since there is high international competition from travelers. The recovery has been more than complete compared to 2019”, says Terral.

Airbnb and paying taxes in Mexico

The Airbnb scheme has been pointed out on several occasions by hoteliers for not being subject to taxes specific to the accommodation activity, such as the collection of the Lodging Tax , a charge that varies from one state to another, and whose resources are destined to the promotion of destinations.

Airbnb currently collects this tax in 10 entities : Mexico City, Quintana Roo, Baja California, Oaxaca, Baja California Sur, Yucatán, Sinaloa, State of Mexico, Jalisco and Sonora. In addition to this, the platform assures that it seeks to continue working with the state authorities to continue with the taxation of its activities.

“It is very important to be a responsible and proactive player in this tourism ecosystem. We are very clear about how important taxes are from the governments of the destinations where we operate,” says Terral. “We have been proactive from day one in reaching out to the states and developing these agreements to facilitate the collection of the Lodging Tax.”

To date, Airbnb claims to be working on solutions so that the platform automatically withholds Value Added Tax ( VAT ) and Income Tax ( ISR ), which would also help attract more hosts by facilitating the tax part.

“We are going to continue working. This is a job that has to be tailored to each state, which has an existing tax regulatory framework. Teamwork must be done with local authorities to adapt it to the reality of the digital economy and these new platforms”, concludes the manager.

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