Israel Plans Measures to Counter Airbnb Ban on West Bank Settlement Listings

Tourism minister pushing for ‘special tax’ while strategic affairs chief will seek Washington’s help

Moshe Gordon sits outside his guest house advertised on the Airbnb international home-sharing site, in the Nofei Prat settlement in the West Bank, on January 17, 2016.
AP Photo/Tsafrir Abayov, File

A day after the travel website Airbnb said it would no longer list homes or rooms in West Bank settlements, Israeli officials on Tuesday vowed to get the decision reversed and/or take revenge on the company.

“We will try to act on several levels to reverse this outrageous decision,” Tourism Minister Yariv Levin told TheMarker.

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“First, we have turned to the management of the company, demanding that the decision be canceled. We will help apartment owners to file claims in the United States in order to reach a situation that at least the company will have to compensate them for the damage it causes them,” he said.

Airbnb has grown to be a major factor in the Israeli tourism industry. In Tel Aviv alone it lists an estimated 9,000 properties and has helped the hotel industry cope with a shortage of rooms as incoming tourism to Israel has grown to record numbers this year. Airbnb rentals have also helped hold down the price of an Israeli holiday.

Monday’s decision by the company only affects what it estimated was about 200 listings in West Bank settlements. Nevertheless the Israeli government has said it will fight the ban on principle as an unfair act of discrimination and a violation of anti-boycott laws in the U.S.

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Tourism Ministry officials said they are in regular contact with Airbnb executives, and were taken by surprise by the company’s decision.

Strategic Affairs Minister Gilad Erdan said Israel plans to consult with the U.S. government over Airbnb’s decision. “We will approach the U.S. government because 25 U.S. states have sanctions against American companies that boycott Israel,” Erdan, who is responsible for the government’s anti-boycott campaign, said on Army Radio.

Palestine Legal, a Palestinian rights group that monitors U.S. anti-boycott legislation, said on its website that some of the laws enacted at U.S.-state level apply both to Israel and “territories controlled by Israel,” an allusion to areas such as the West Bank.

Levin speculated that Airbnb’s couching its decision as a general principle not to do business anywhere in the world that is a “disputed” region was meant to provide legal cover in case of lawsuits.

He plans to counter Airbnb’s move by imposing what he called a “special tax” on the “activities of companies that take part in the BDS boycott or boycott Israel or any part of it,” and step up enforcement of tax rules on Airbnb renters. He also vowed to step up activities to market travel to Judea and Samaria.

Levin said he was raising the tax issues with the Israel Tax Authority and didn’t comment on what the special tax would be. However, as tourism minister he has no authority on tax issues, so that the most he can do is make recommendations.

>> Read more: Airbnb's Ban on Israeli Settlements Is Big Win for BDS, Not Necessarily for anti-Semites | Opinion ■ Why Airbnb Will Have a Hard Time Enforcing Its Israeli Settlement Ban | Analysis

In terms of a crackdown, the government has long resisted acting despite intense lobbying by the hotel industry that argues it can’t effectively compete if Airbnb renters aren’t subject to regulations or taxes, as the hotel industry is.

The Tax Authority has prepared a plan for more effectively taxing Airbnb renters and other shared-economy businesses. It is awaiting Finance Minister Moshe Kahlon’s approval. Kahlon, however, has adopted a strong stance against new and higher taxes.

Levin told TheMarker that short-term renters who find Airbnb less attractive because of the government’s tougher tax policy toward the company should simply list their properties on other websites.

“There will be no record levels of tourism and we need to find a solution. People will move to other platforms that will provide an answer both to apartment owners and those looking to rent,” he said. “It will also teach a lesson to those who want to boycott us. Airbnb isn’t the only one in this segment.”

With reporting from Reuters.