New holiday rental fees have been criticised by owners who said it could be a blow to the tourism market.

Both MPs and senators have passed the Vacation Rental (Application and Registration) Fees Act 2023, which introduces fees for a holiday rental certificate.

Under the legislation, properties with a rental value of $22,800 or lower will have to pay $1,500 for an annual certificate.

Properties with a rental value between $22,801 and $90,000 would pay $2,000 and properties valued $90,001 and higher would pay $2,500.

Since the end of 2018, Airbnb has also collected 4.5 per cent in vacation tax directly from guests who book Bermudian rentals.

Speaking before the legislation was approved, one couple, who asked not to be named, said that they had rented three Airbnb apartments since 2011.

They said that, if the fee became too much, they would have to take the rentals off the market – but said they would not put them on the long-term local market.

“One of our primary reasons for running the Airbnb units is to give people who would otherwise not be able to afford Bermuda prices the chance to visit the island.”

Another holiday rental owner, who also asked to remain anonymous, said that the vacation rental market had struggled with the Covid-19 pandemic, first with restrictions and now because of expensive and irregular flights.

She said the fees should not be imposed for several years until the economy was back on track.

Fiona Campbell, of Bermuda Rentals, said that increasing the Bermuda Tourism Authority tax from 4.5 per cent to six or eight per cent would be “a more equitable and proportionate way” to raise funds.

She said: “With only $500,000 revenue expected annually from the proposed fee, that's not enough money to build one affordable rental unit or to administer a whole new programme. Why reinvent this wheel?”

Ms Campbell, who has run her rental business for 32 years, said that many of the properties were only available when the owners were off island.

She added that vacation rentals struggled to sell outside the summer months and that this, combined with fewer flights to Bermuda, made this “feel like a death spiral”.

Ms Campbell said that many of the units were not suitable for the long-term market because they were too small and had minimal kitchen facilities.

She added: “I have heard many of my homeowners say that getting rid of problem tenants is such an issue they will never rent out locally again.”