Inside unregulated rise of homestays, Airbnbs

On a quiet street in Kira, Wakiso District, a furnished apartment sits behind a high wall, complete with security guards, Wi-Fi and a caretaker on call.

Inside, it looks no different from a hotel suite, with clean sheets, a stocked kitchen, and a welcome note for guests. But unlike a hotel, this business operates largely outside formal regulation.

“You just wake up in the morning, and you decide to open up an Airbnb,” says Ms Jaliah Nabbowa, a homestay operator who manages multiple units in Kira and Kyanja.

“There are no papers to sign. It’s really easy to start. Anyone can start without doing too much.” Her experience reflects a rapidly expanding sector that is reshaping Uganda’s accommodation industry, homestays and serviced apartments, commonly referred to as Airbnbs. Over the past few years, these short-stay rentals have gained traction among both local and international travellers, offering a cheaper, more flexible alternative to traditional hotels. Yet as the sector grows, so do concerns about safety, standards, taxation and regulation.

Growing in plain sight

The appeal of homestays is easy to understand. They offer privacy, flexibility, and a “home away from home” experience that many travellers prefer. Most are located in residential neighbourhoods, close to supermarkets, restaurants and other amenities. For long-stay visitors, they are often cheaper than hotels. Bookings are also simple. Platforms such as Airbnb and local apps like Tubayo connect hosts to clients, while social media platforms, particularly TikTok, Instagram and WhatsApp, have become a powerful marketing tool.

“Mostly, my clients come from TikTok, where I advertise. But I also get referrals from friends and some from booking platforms,” Ms Nabbowa explains. Others rely on apps as their primary channel.

“Our clients mainly book on the Airbnb app, some are walk-ins, some book through our social media pages and referrals from previous clients have come in handy,” Mr David Taremwa, who operates serviced apartments, tells Weekend Monitor.

A regulatory gap

The low barrier to entry has made the sector especially attractive to young entrepreneurs. But that same ease of entry has created a regulatory grey area. Despite its rapid growth, much of Uganda’s homestay sector operates outside formal oversight. Ms Nabbowa says in her two years of running an Airbnb business, she has never been approached by any government authority. “I haven’t been regulated by the government at all,” she says.

“No one has reached out. We don’t know any offices to go to.” Ms Nabbowa is also not registered with the Uganda Tourism Board (UTB), the body mandated to regulate tourism accommodation facilities.

“I do not know anyone else doing the same business as me who is registered with UTB,” she adds. Routine inspections, common in the hotel industry, are also absent. “We have not had any checks or audits about standards,” Ms Nabbowa discloses.

For regulators, this presents a complex challenge. Mr Innocent Assimwe, an inspection and licensing officer at UTB, says the line between a homestay and a private rental is often blurred.

“The way Ugandans do business, it becomes tricky to regulate. Once it is a residential home, it is out of our scope,” he explains. In some areas, properties initially classified as serviced apartments have quietly transitioned into long-term rentals, further complicating oversight. “In Hoima and Masindi, apartments that were classified as serviced apartments have now become rentals,” Mr Assimwe says. As a result, only a small fraction of operators are formally recognised.

“We have less than 20 homestays that have met the criteria, that have their permits and licences in order,” he notes.

Taxation, informality, risks

The regulatory gap also extends to taxation. According to UTB, many operators are not registered as businesses with the Uganda Registration Services Bureau (URSB), even when they are earning income from the activity.

“A lot of businesses are not registered with URSB. They pay taxes via their proprietors’ tax identification numbers (TIN) if they do,” Mr Asiimwe reveals.

This makes it difficult for authorities to track the size of the sector, enforce standards, or collect appropriate revenue. At the same time, operators say they face their own financial pressures. For Ms Nabbowa, one of the biggest challenges is rent.

“It’s better to own the property than rent it, because most of the profits go back to rent,” she says.

Ms Nabbowa adds that landlords often increase rent once they realise a property is being used for short-term stays. “They will tell you to start paying more because they think you are making a lot of profit,” she says. For guests, the lack of regulation can translate into uncertainty and sometimes, poor experiences.

Ms Linda Nabbaka recalls booking an Airbnb in Kisaasi through a WhatsApp group, only to find the property in poor condition. “The place was dirty, and the bed was wet. I did not sleep and spent the night regretting my decision,” she says. Without a formal booking platform or regulatory framework, Ms Nabbaka had no clear way to seek redress. “I had no one to turn to. There was no third party, no way to find redress. I felt cheated,” she says. Such cases highlight the risks associated with informal bookings, where there is no guarantee of standards or accountability.

Platforms as intermediaries

In the absence of strong regulation, digital platforms are increasingly playing a role in mediating transactions between hosts and guests. Mr Brian Namanya, the chief executive officer of Tubayo, describes platforms as a form of third-party oversight.

“In any engagement between two people, when there’s a witness, a contract is respected. Tubayo is like that witness in these bookings,” he says. Through its platform, Tubayo is able to track transactions and enforce certain standards. “We can hold the host accountable or the guest accountable. There is traceability, there is data, and there are terms of service,” Mr Namanya explains.

The Tubayo supremo notes that disputes, such as guests violating house rules or causing damage, are handled through these systems.

“The moment there’s a party, the guests are told to leave,” Mr Namanya says, referring to violations of property policies.

“We can also hold the guests liable for damages.”

At the same time, platforms face their own limitations. “This is a new industry that hasn’t been defined. There are some policies being proposed on licensing furnished homes, but the sector is still developing,” Mr Namanya says. While Tubayo verifies hosts and requires identification details, formal certification or licensing is not yet a universal requirement. For many operators, the appeal of homestays lies not just in demand but in flexibility. Hosts set their own prices, manage bookings directly, and often rely on personal communication to resolve issues. “We always try to resolve complaints amicably. Because we are in the hospitality business, how we treat our clients will have an impact on the next client,” says Mr Taremwa.

In some cases, refunds are issued when disputes arise. “Where clients are not comfortable, we are happy to make refunds,” he says. However, the informal nature of the sector means that practices vary widely from one operator to another. Some properties are well-managed and secure, with CCTV cameras and guards. Others operate with minimal oversight.

Calls for regulation

Operators themselves are now calling for clearer rules. Ms Nabbowa says she would welcome regulation provided it is fair and practical.

“I would like regulations that are fair and simple, and that treat Airbnb hosting as a real business,” she says.

Ms Nabbowa also wants government support in areas such as pricing, safety and registration. “Clear guidelines on things like rent pricing, safety, taxes and registration would really help organise the sector,” she adds. For UTB, efforts are already underway to address the gaps.

“We are working around the clock to come up with a regulation and licensing that is comprehensive. That can include even homestays,” Mr Asiimwe says. One of the proposed solutions is a one-stop business centre, where operators can access registration, licensing and other services more easily. But enforcing these rules will not be straightforward. The diversity of the sector, from individual hosts renting out spare rooms to larger serviced apartment operators, means that a one-size-fits-all approach may not work. Uganda’s homestay and serviced apartment industry is at a turning point.

On one hand, it represents a growing opportunity, expanding accommodation options, supporting small businesses, and tapping into digital platforms to reach new markets. On the other hand, it raises fundamental questions about standards, safety, taxation and accountability.

The rise of homestays is part of a broader shift in how people travel and how accommodation is provided. Technology has made it easier than ever to connect hosts and guests, bypassing traditional systems. But it has also created new gaps that regulation is only beginning to address.