Don’t nobble growth industry
Airbnb benefits tourists, cafes, restaurants, hotels, homeowners and many others, says Clark Cooley
AS with many new industries in the booming sharing economy, the digital revolution of short-term accommodation platforms has brought seismic change to our island state.
The rise of innovators in this new marketplace such as Airbnb and Stayz have seen a massive expansion of shortstay accommodation options, offering visitors everything from a single-bedroom granny flat in Bridgewater to a waterfront mansion with swimming pool and ballroom in Sandy Bay.
The industry was deregulated by the Tasmanian Government in 2017, allowing homeowners to rent up to four rooms before permits are required and allowing shack owners to easily rent their properties to visitors without being persecuted with unreasonable red tape.
This deregulation, coupled with growth in tourism, has brought significant growth to the market.
In 2017, 180,000 of 1.26 million visitors here stayed in Airbnb properties — 13 per cent of tourists who visited in that period, a rise from 10 per cent the year before.
It’s no surprise consumers have benefited most from this considerable transformation in the tourism market with unprecedented choice when it comes to accommodation, offering visitors unique options to suit their needs.
Homeowners have seen gains from lucrative new income streams, with Airbnb returning on average $247 per week, or $12,850 per year for Hobart hosts in 2017.
Airbnb is not just altering where tourists are lodging in Tasmania, but also attracting a different group to our state.
Research by the University of Tasmania last year showed those using Airbnb not only stay up to two days longer when visiting, but spent 80 per cent more while in Tasmania, resulting in considerable financial gain for retail and hospitality industries.
The UTAS study also highlighted benefits Airbnb travellers brought to suburban, rural and coastal regions, which gained economically from increase visitation. The study stating that travellers who chose Airbnb wanted a deeper connection with the island, and accessed alternative sources of tourism information, such as word of mouth from hosts, in addition to mainstream tourism material. This resulted in more recommendations for more local small businesses, including places to eat, drink and shop.
Despite these significant benefits to Tasmania’s economy, increased government-mandated overregulation continues to receive support as a kneejerk response to Hobart’s housing shortage. Hobart City Council aldermen, state and federal MPs, Labor and the Greens have all committed to regulate and moderate this new and expansive market. These restrictions include banning investment in Tasmania, significantly taxing properties that are not adequately used, such as beach shacks, and banning the entire industry.
Truth is an overwhelming majority of people who rent out their rooms, houses or apartments on Airbnb are letting their own homes. Obliging these mostly mum and dad entrepreneurs to manage their way through the obstacle of excessive financial and legislative hoops will not grow the housing supply.
There are some who let out non-primary residences on Airbnb, but the numbers are marginal and they cannot sensibly be held responsible for having any significant impact on Hobart’s housing shortages. Of course, this argument negates the basic principle that homeowners have a right to do with their own homes what they wish.
If taxes and regulation are increased as proposed by these groups, any income generated by these hosts from their Airbnb ultimately stops being worth it, and those with spare rooms will let those rooms to sit empty. They won’t, as some have suggested, miraculously return to the long-term rental market as the majority of them were never a part of it to begin with. The only significant result is Tassie families will no longer be able to make a difference in paying off the mortgage, electricity bills, and other daily expenses.
In addition to the effects on hosts directly, any withdrawal of accommodation for our tourism market would have devastating impact on our visitor economy. The traditional lodging industry already struggles to accommodate those who wish to use hotels, motels and other forms of traditional short-stay accommodation for tourism and business in the state.
The answer is not as simple as taxing and regulating Airbnb into non-existence, but a multifaceted approach that includes relaxing some of the absurd rules around development, investing in affordable housing, and ensure that government and industry work closely together on solving this issue.
In 2017, 180,000 of 1.26 million visitors stayed in Airbnb properties — 13 per cent of tourists who visited, a rise from 10 per cent the year before.