Visitors to vacation rental properties plunged by 3,000 in a nine-month period in 2019.

Mike Cranfield, of Cranfield’s Property Group, said the decline coincided with the introduction of a 4.5 per cent tax on vacation rental bookings through services such as Airbnb, the worldwide giant in bookings.

Mr Cranfield said: “Obviously, this may only be coincidental. Hopefully, the tax will not go up.”

He noted that competition had increased as the number of rental units had grown to 600, and warned the fall in visitors was “too much for some owners to live with”.

The Bermuda Tourism Authority said yesterday that it expected demand for vacation rentals to increase and that it will keep promoting the market.

Statistics from the BTA show 10.1 per cent of leisure air arrivals stayed in vacation rentals in the first three quarters of 2019 — down from 11.7 per cent and 10.3 per cent in 2018 and 2017 respectively.

With the number of air arrivals taken into account, that means about 15,955 visitors stayed in Bermuda vacation rentals between January and October, compared with 19,656 from the same period in 2018.

Visitors did stay slightly longer in vacation rental properties in 2019 compared with 2018 — an average of 7.59 nights compared with an average of 7.32 nights.

When the 4.5 per cent tax was introduced under the Vacations Rental Act in June 2018, tourism minister Jamahl Simmons claimed it could generate up to $750,000 in a year to offset the costs of the BTA.

One Bermuda Alliance MP Leah Scott warned at the time that it could prove a deterrent to tourists.

Mr Cranfield said his own numbers peaked in 2017 and credited the America’s Cup for the “blip”.

He said: “It’s been downhill since then. Mr Cranfield added: “Tax towards the last bit of 2018 and in full force this year definitely has had an impact along with other factors. We should all have tried to keep up the feel-good factor of [America’s Cup] and Bermuda.”

Mr Cranfield said transportation remained a common complaint among guests who see it as expensive and “non-existent at certain times and places”.

The Royal Gazette reported last week that real estate insiders believed the increase in Airbnb rentals meant there were now fewer properties on the rent market for long-term residents.

Mr Cranfield said: “New vacation rental unit owners are only responding naturally to get back some of their income lost due to the exodus of our guest workers, a large number of which have left the island in the past ten years. “This drop in their usual rental income has to be supplemented somehow. Vacation rentals are seen as one of the solutions.”

But he expects the number of vacation rental properties to fall this year. He said: “There is an enormous amount of work and time required to keep your properties at the top of the list.”

Mr Cranfield said he believed the BTA was getting “OK” results but the rapidly changing tourism market presented a challenge for small destinations like Bermuda.

He said vacation rentals are popular with younger or retired couples looking for an “unencumbered” holiday, families with small children who might not be able to afford a hotel, groups who visit Bermuda and want to stay together and those who visit for events like conferences.

He said: “I believe that the BTA needs to focus more clearly on these groups in the future, although they have to play a bit of a balancing act with the hotels as well. Not an easy thing to do.”

Mr Cranfield added that vacation rental guests typically spend more on food, drinks and transport than they do on their rooms.

He said: “Bermuda hosts regularly have visitors that eat out every night, rent an electric vehicle for their entire stay or cab everywhere, buy tons of groceries and generally are out all the time and therefore see a vacation rental unit as a place to shower, sleep and recharge.

“This allows them to take back more valuable memories than just the accommodation — which is what we as an island should be aiming for.”

Kevin Dallas, the chief executive of the BTA, said: “Vacation rentals represent a growing and valuable part of our tourism ecosystem, and the number of Bermudians participating in this part of the economy has expanded dramatically in the last three years.

“That’s why the BTA worked closely with owners to encourage the sector’s first advocacy group — the Bermuda Rental Association of Vacation-Home Owners, which officially launched during last fall’s Tourism Summit.

He added: “Inevitably, vacation rentals, like hotels, will experience periods of lower occupancy as supply continues to increase and when demand is lower. Over the long term, however, we expect demand for vacation rentals will grow.

“We will continue to promote the vacation rental market for both the additional choices it offers to visitors and the income it generates for Bermudians.”

The Ministry of Tourism and Transport did not respond to a request for comment.