Consultation Session: Collaborative Economy

17 November 2016

Research Analyst at the Ministry of the Economy, Investment and Small Business (MEIB) Philip Vella gave a presentation on the Collaborative Economy during a consultation session organised by MEUSAC in collaboration with MEIB, on Thursday, November 17, 2016, at Fortress Builders in Valletta.

He explained that what is known as the shared economy is one of the key elements which form part of the European Commission’s Single Market Strategy presented last October.

The collaborative economy, also called the sharing economy, covers a great variety of sectors and is rapidly emerging across Europe while the Single Market Strategy is the Commission’s plan to unlock the full potential of the Single Market. The Single Market is at the heart of the European project, enabling people, services, goods and capital to move more freely, offering opportunities for European businesses and greater choice and lower prices for consumers. It enables citizens to travel, live, work or study wherever they wish. The term sharing economy is also used to describe economic and social activity involving online transactions.

Mr Vella highlighted that one of the sectors experiencing growth is the accommodation sector, mainly economic activity involving online transactions.

According to data issued by the Organisation for Economic Cooperation and Development (OECD), revenues from a sharing economy hit some €28 billion last year.

“The sharing economy has grown exponentially in recent years and is forecast to reach €335 billion by 2025,” he said, quoting further OECD statistics.

During the session, a discussion ensued on the relevance of licences for individuals renting a property or part of it to host families or tourists, including the provision of accommodation through online services.

In the case of Malta, if a person rents a property, or part of it to a tourist, he or she must comply with existing Malta Tourism Authority regulations, that is ensuring that they apply for a licence for starters.

Mr David Mifsud from the Malta Tourism Authority explained that the licences are there to ensure standards are kept by those giving a service, in this case persons involved in the accommodation sector. He said that the licence fees are not high and should not hinder individuals from applying for one.

He said that there currently are two types of licences – one for host families and the other for those renting out holiday furnished premises. Momentarily, the host family licence is not only geared for those renting out property to students but also to ones renting a property to tourists.

Mr Mifsud however did not exclude that the concept of licensing may change eventually.

“Currently, the Ministry for Tourism is revising legislation in relation to this sector. “It could very well be the case that new legislation will provide separate licences for host families keeping students and ones targeting those offering accommodation services via online platforms,” he said.

Mr Mifsud also pointed out that the team of enforcement officers has tripled in the last year to deal with the influx of accommodation service providers.

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