Problem of short-term regulation
One by one, our councils have been grappling with the difficult issue of whether to regulate and tax local operators of short-term accommodation. And if so, how?
Airbnb-type operators are taking a bite out of the hotel industry, especially in tourist hotspots like Queenstown. They can also make life difficult for would-be renters who want to stay longer but pay less per night than tourists. A media report from Mt Maunganui claims locals are being evicted from rental properties in favour of short-term users as summer approaches.
Like other disruptive technologies such as Uber, Airbnb relies on the ease and ubiquity of technology, cuts out the middle man or woman and gives people the chance to make extra dollars as bed-and-breakfast operators. Crowd-sourced ratings and feedback help to police the system.
The Christchurch City Council is the latest to struggle with regulating a growing sector. Councillors are looking into a business rate on properties that host guests for a minimum of four months a year. There could also be a permit system.
The Auckland Council has already approved an Accommodation Provider Targeted Rate, which is added to properties rented out for more than 28 days a year. The rate increases at 136 days and again at 180 days. Its argument is that providers should contribute to the city’s spending on tourism that they benefit from. However, operators have said they would rather see a more transparent ‘‘bed tax’’ included in the fee paid by guests, than another rates bill.
In Queenstown, where local workers find it hard to access affordable accommodation, Airbnb has argued for a bed tax rather than the more draconian option of limiting the number of nights a short-term operator can be available.
Airbnb bookings accounted for 148,000 guest nights in the Queenstown Lakes District in 2017.
Airbnb growth has also been rapid in Christchurch, from 0.7 per cent of guest nights in June 2016 to 21.6 per cent in August 2018. The council is wise to ask central Government to help out by drawing up a national plan for short-term accommodation providers, rather than allowing an ad hoc, piecemeal system that varies from region to region and relies on the often stretched resources of local councils.
Understandably, a national framework would also be the industry’s preferred option. Peter Miles, general manager of online provider Bookabach, has noted local councils are ‘‘seeking to resolve a complex policy issue with their limited policy levers’’. Miles adds ‘‘... we believe there remains a strong case for the central Government to step in with a lasting solution on tourism infrastructure funding’’.
This should happen. A bed tax seems a no-brainer, especially when Airbnb offers to administer and collect it on behalf of Government. It also seems obvious we should standardise the system nationally to offer certainty and consistency to both tourists and owners who might have properties in different centres.