These are all excellent reason why the government would want to protect the tourist in the DR and collect more revenue.
- Thread starter CaribeDigital
- Start date
Time to buy a hotel?
Thanks. Can you give us the name of your hotel again? I would like to try it someday.
Not to mention leveling the playing field.
I'd prefer taxes for registered hotels set at the same rate as Airbnb instead of raising taxes and regulations on Airbnb.
But gubmint won't look at it that way.
Illegal/non-registered businesses have an enormous---and unfair---cost advantage over legal entities.
The whole AirBnB model is pretty much hated by governments worldwide because it is so informal. AirBnB has been banned in Berlin, Barcelona, central London precisely because it encourages people to set up informal, unregulated, uninsured hotels that don't pay any tax. The original concept was that you gave someone an airbed in your sitting room and cooked them breakfast (hence Air B&B) and it was for backpackers mainly. Then it grew and grew and became a way that people could let entire apartments and houses and boutique hotel rooms, and then people started amassing large property portfolios and renting them out by the night on AirBnB. In the UK there have been nightmares because entire condo blocks have almost been taken over by AirBnB, constant parties, more noise, no sense of ownership by any of the visitors, and hell for those who live there all the time. And no taxes being paid, no safety. It's the same in Dom Rep, and in the Colonial Zone, the Vicini family have bought tens of properties to convert into hotels, and found they too have empty bedrooms as everyone and their aunt is renting on AirBnB. So MITUR launched this campaign last year "inviting" everyone to get their paperwork up to date, which involved step 1 submitting details of your company, proving you were up to date with tax, insurance, proving that you paid your staff correctly, that you paid the Propina Legal, proving that the owners were legally in the country and so on. Reams of paperwork. And after submitting that, requests for another 20 documents. But obviously the little block owned by illegal Venezuelans that only takes cash and couldn't spell DGII fell at the first hurdle and when, and if, tourists return it's pretty certain they won't be allowed to operate. The real hotels are going to suffer way to much to allow that, and Asonahores already has Abinader in its pocket on this subject by all accounts.
Sorry for the long post, but someone may find this background useful.
It's called Casa Sanchez Hotel. I don't run it myself now but there is an amazing couple who have taken it over and are doing a wonderful job.
Well, of course I paid the wages in time and had the administrators worked 20 years in the same position in a well known hotel in Santo Domingo before, all that stuff got done correctly. This was not my first business in my life, I have founded and run several companies before, one of them with subsidiaries in 13 countries- but none of them a 3 world country - and I lived and worked in more then one country before, but again none of them 3rd world.
As I mentioned it, the hotel was a kind of expensive hobby, I paid with the money I had from my other companies from before.
Doing business in RD has not too many things in common with doing business in the developed world and even less when used to the corporate business world. It is not just the corruption, it is the stunning inability to execute contracts and laws. Then again, you can read this is in any of the advise paper of chamber of commerces or internernational organisations. Should not have come as a surprise, just had the stupid idea that I had been sooo successful before in my businesses that this would not apply to me - yeah....
So my advice would be to read those papers giving advise about doing business in RD. Not the ones written by Dominicans, but the ones written by internernational organisations or camber de commerce of other countries.
If you do learn to run a business in DR you have earned my respect, because this is an art on its own.
Not that you would be able to use this art outside DR - so far I have not seen any DR business expanding world wide not seen Dominicans managing internernational cooperations. Not hard to guess why.
On the topic if you need business experience before I think it is not helpful to have business experience from before, as none of the rules you learned to be useful or successful will work in the way you think it would. For sure none of the things you learn in an MBA can be used...
Really it does not matter if you have previous business experience as the one you have can not be used. Specially negotiating with Dominicans is like talking to complete lunatics. I remember well one guy wanting 18 000 USD for something and when I mentioned that its not worth more then 10 000 he insisted on 18000 because the car he wants to buy costs 18000. Only in DR....
Your experience is different than mine.
I disagree on prior experience. Most noobs in business fail in several substantial areas because they do NOT have experience:
- Overestimation of revenues
- Underestimation of expenses
- Lack of knowledge in proper bookkeeping and cash flow management
- Poor employment practices that run afoul of labor laws
- Underestimation of legal expenses
- Underestimation of current and future capital requirements
- Lack of knowledge where to seek help when needed
- And, most critical: overestimation of personal capitalism and management skill
I always start my day with a list of things to do and a plan. In the Dom Rep I found that most days you started fixing one problem, then another came along, and while you were trying to fix those two, a third and a fourth came, and the fourth was much bigger than the first three, so you started focusing on that, and then number two disappeared but a fifth and a sixth appeared. And by the end of every day you needed a very stiff drink, and you realised that you had completely forgotten what your plan was at the start of the day. It always felt like one of those management training courses, where they threw so many problems at you that you thought "this is a joke, life would never be like this". My experience was that it was way way harder than running a business in the UK, maybe 5 times harder.
Lol at airbnb being terminated in the DR. That will never happen. TP do you have any links to back up this claim or is this rabid speculation as usual. I am more upset that people actually believed your nonsense.
On the last one we do agree, but add crime / organized crime to the mix too.
When I bought the hotel business I did an audit of the revenues and nights sold and contracted someone experienced with the hotel business and accounting.
It checked out, there was passport copies of all the clients, the revenue entered the bank accounts and the hotel was spectacular profitable: Once I took over there was only 10% of the clients like before.
Turned out this was part of a (organized) crime money laundry operation of Venezuelans.The clients actually never staid at the hotel but only their credit cards were used with their consent and then a large kick-back in cash was paid to them. This had to do with the difference in official Bolivar rate and the black market rate.
As of underestimating legal fees or seek help: I did go to a very well known lawyer company (the same writing on DR1) in Santo Domingo. They looked over the documentation and basically told me that it would cost me more legal fees then I lost so far and even then its not clear if I would recover anything. I appreciate the honest answer and I am still client in other matters of that lawyer- company. I was additionally at that time warned by several others for my own safety not to mess with the guy and his people who sold me the hotel. I was without detail referring to that as "the local mafia" - of course not mafia but some kind of organized crime as money laundry obviously is...
I therefore would say the legal fees are not very high as a lawyer in most of such cases can't to a thing for you, same story to find someone who does collection of outstanding money - still looking for someone doing that and never found. My experience is that the help you need no one provides.
By the way, one guy who still owes me money from that time after I did a lot of investigation it turned out he is be a big time international fraudster, who sold 30 houses at the beach which did not exist to Dutch guys. Just saying, the amount of criminals I accidentally met in Santo Domingo is many level higher then during many years of International business in the first world.
Not only that, but there's also a few extremely influential and well to do (rich) movers and doers who have hotels in the Colonial City.
Absolutely. What does the government care about some mom and pop operation that thinks they have danced around 28%edge on the pricing? And I keep saying here in regards to the covid19 crisis the hotel industry and the forces behind them are no small potatoes. No way ABB will continue in the DR. My opinion.
Hoteliers slam Dominican Govt.’s failure to regulate Airbnbs
<p>Santo Domingo.- The rooms rented through platforms such as Airbnb already account for 25% of Dominican Republic’s hotel offer, according to sector business leaders in the third annual Asonahores Tourism Investment Forum. The panelists at the event, Frank Rainieri, of Grupo Puntacana...
dominicantoday.com
There you go Alex, I've even managed to include a link in English for you. A simple google search would have saved you the bother of hurling insults and accusing me of talking nonsense. Frank Rainieri is pretty powerful and one of the richest guys on the island, Juan Vicini has been buying properties in the Colonial Zone to convert them into AirBnB's and he is one of the richest men on the island. Families like these are not happy to sit back and watch AirBnB eat their lunch.
The approach will be to tax the AirBnBs, but this will require them to be registered as businesses, and to get approval from Ministry of Tourism, which takes years and about a million forms to get. So, although they won't be closed down, they will be in all but name.
Dios!! You just proved airbnb isnt going anywhere. But to enhance your argument you threw in more speculation. This family bla bla blaHoteliers slam Dominican Govt.’s failure to regulate Airbnbs
<p>Santo Domingo.- The rooms rented through platforms such as Airbnb already account for 25% of Dominican Republic’s hotel offer, according to sector business leaders in the third annual Asonahores Tourism Investment Forum. The panelists at the event, Frank Rainieri, of Grupo Puntacana...
There you go Alex, I've even managed to include a link in English for you. A simple google search would have saved you the bother of hurling insults and accusing me of talking nonsense. Frank Rainieri is pretty powerful and one of the richest guys on the island, Juan Vicini has been buying properties in the Colonial Zone to convert them into AirBnB's and he is one of the richest men on the island. Families like these are not happy to sit back and watch AirBnB eat their lunch.
The approach will be to tax the AirBnBs, but this will require them to be registered as businesses, and to get approval from Ministry of Tourism, which takes years and about a million forms to get. So, although they won't be closed down, they will be in all but name.
TP: Airbnb according is dead in the DR since they arent being taxed
TP: Alex look Airbnb will be taxed in a new digital tax law.
Instead of telling me to Google you should've since it contradicts your original argument. Airbnb isnt going anywhere..period. Stop the gross speculation and use facts. The only fact here is that airbnb will be taxed.
Alex, explain how exactly a regular person without an RNC can pay ITBIS? Have you ever run a company in Dom Rep and have you got the slightest idea of how being required to do something like pay DGII then requires you to get another 200 bits of paper and register here there and everywhere? And surely you can see that with powerful people like the Rainieris and the Vicinis being angry about AirBnb, it will be restricted. I know you love to argue, but I believe that you know Dom Rep well enough to understand that when the rich powerful families want something to happen, it usually happens.
I also know, from first hand experience of owning a hotel in the Colonial Zone, that last summer MITUR came around all hotels and guest houses in the Colonial Zone and "invited" all of them to get their paperwork up to date. You had to go to an office in Avenida Mexico where there were about 50 staff working and everyone was having to submit copies of lots of paperwork. Absolute chaos, paper everywhere. Certificates that you had paid your taxes. Proof that you had insurance. Proof that your staff had medicals. Proof that your staff were paid the Propina Legal. And so on. Everyone was having to do this. And obviously informal places fell at the first hurdle.
Your argument stated that airbnb was "finished" in the Dominican Republic since they werent giving their share of taxes like the hotelers. That argument was based on speculation and void of all facts. You then posted a link which stated that the government is going to tax airbnb facilities. Problem solved! There is nothing else to debate. You proved yourself wrong as usual. Now everything you're typing is meaningless drivel. Hell you guys swore up and down Uber would never make it here for the same reasons and its super successful. Obviously once the law is passed airbnb corporate will simply add the taxes to the users booking fee. As an example, thats what they had to do be operable in alot of states. This isnt brain science.
Few have any idea the complexity of the Dominican legal business system.
Go sell a trademarked logo or name from one entity you own to another you own and see what a CF it is.
I'm working on six months now. There is always one more missing document or stamp or department sign-off or signature or verification from some department.
It seems to never end.
I would not buy a dog house now.... I live in a very nice complex out east 80% most of the folks cant pay their rents ... from what i have been hearing if you were paying 1500 going rate now is 750 .... most of the folks are not paying anything where they currently live... not a good time to have rentals
I agree Airbnb is not going anywhere. They have seized a good chunk of non-resort tourists and are a good incentive for foreign buyers in beach towns (may be different in La Capital).
If they outlaw it, it will be a bad publicity for the island, while it s working in most vacations hotspot.