6 minute read
Policy Watch: Airbnb
In October Airbnb announced they were spending $500 million sponsoring the next five Olympics Games.
Advertisement
It’s a big number but they can afford it. The long-awaited floating of Airbnb on the US Stock Exchange next year is expected to value the company at $40 billion. That’s a hell of a long way from the living room of a small
San Francisco apartment where company founders and roommates Brian Chesky and Joe
Gebbia famously blew up their air mattresses one night back in 2008, to try and make a few extra bucks putting up desperate
delegates to a big conference in town that had filled up all the city’s hotels. It doesn’t get much bigger for any global brand than sponsoring the Olympics. It’s a reminder of just how massive and corporate Airbnb have become. Globally Airbnb will generate $73 billion in bookings and ‘host’ 500 million guests in 2020. When it does go public it is expected to be hot on the heels of Marriot, as the world’s largest publicly traded accommodation business. We must stop looking at Airbnb as some disruptive new kid on the block bringing home sharing to It doesn’t get much bigger for any global brand than sponsoring the Olympics. It’s a reminder of just how massive and corporate Airbnb have become.
We must stop looking at Airbnb as some disruptive new kid on the block bringing home sharing to the masses. They’re now as big, mainstream and competitive as any global corporate behemoth. Yet governments and regulators all over the globe are still struggling to find an effective way forward in managing the changed landscape of the commercial accommodation market.
the masses. They’re now as big, mainstream and competitive as any global corporate behemoth. Yet governments and regulators all over the globe are still struggling to find an effective way forward in managing the changed landscape of the commercial accommodation market. In Australia just about every State has now had some form of Parliamentary inquiry into the issue and have undertaken reviews of their visitor accommodation licensing and regulations. All in the hope of finding a way forward that balances off the interests of the traditional accommodation industry, with the desire of many property owners to do with their own home what they want, and, increasingly, the consequences for residents and communities in the transition of properties from residential to visitor accommodation. In Tasmania, we’ve lived this debate as much as any other State, while reflecting the changing public and political sentiment towards Airbnb and ‘home sharing’ platforms. When the Hodgman Government came to power in 2014, embracing the ‘sharing economy’ was a perfectly timed and practical representation of the new Government’s ‘open for business’ mantra to get the State economically moving. Cutting red tape meant embracing Airbnb and Uber, and that was all in-vogue. I would cringe whenever I got a media call asking for a comment about Airbnb, knowing full well that if I was reported as saying anything even slightly negative or perceived as resistant to the sharing economy rage, I would soon be met with howls of texts and social media posts calling me ‘protectionist’ of the traditional accommodation and hotel industry. This political dynamic was reflected in the policy settings of government, which at the time Airbnb described as ‘nation-leading’. It led to a total deregulation of the hosted accommodation market for property owners putting their own home into the visitor accommodation market. Deregulation is not without risk to both the property owner and guest, but the principle of enabling Tasmanian homeowners to share their own home as they see fit seems to have been broadly accepted by all stakeholders. The more contentious policy and planning debate has really been about what to do about the nonhosted market – self-contained investment properties, second homes and shacks – being converted into commercial visitor accommodation businesses. Traditional accommodation operators have been whitehot angry about so many new entrants to the market, many of whom have been avoiding some of the conventional operating costs and regulatory compliance expected of all accommodation businesses. Welfare services have voiced concerns about the
impact on housing affordability of property owners taking their investment property out of the residential rental market and into the short-term visitor accommodation market. Clearly there has been a significant shift in the market. TICT’s latest Accommodation Investment Report analysing Tasmanian Visitor Survey over the past three years revealed the number of visitors to Tasmania who stayed in Hosted or SelfContained Accommodation including traditional B&Bs and Guest Houses, along with Airbnbs, grew by 106%. The number of visitors to the State who stayed in a Hotel or Motel grew by 5% over the same period. We need to recognise this market growth, and the challenge it presents the traditional accommodation industry and in planning further visitor growth across the State. This starts with recognising Airbnb hosts are very much a part of the Tasmanian tourism industry. There can be no ‘them’ and ‘us’ any longer. The last time TICT surveyed all our accredited accommodation operators, 60% said they were listing on Airbnb. This number will only grow. Airbnb’s commissions are cheap; their website is attractive and easy to update listings, and it has a cult like following from a very large chunk of Tasmania’s most lucrative visitor markets. There is also now a very clear and even regulatory playing field for all accommodation operators, whether you are only listing on Airbnb, or running a traditional B&B or self-contained accommodation business. From late November, all Airbnb hosts and any accommodation operator with a property less than 200 square metres in size must have obtained a permit from their local council. The only exception is if the property is also your principal place of residence. If your property is over 200 square metres or part of a strata, you must lodge a development application with your council. The challenge now is compliance and ensuring Tasmania’s 29 Councils are effectively applying this framework within their local area. This is where data comes in, and why the State Government had to firstly, ask, and then plead, and eventually legislate, for Airbnb to make their hosts data available to the State so that Councils can compare and follow up with their own records. Irrespective of who you are, what your property is and what booking platform you use to get your guests, every accommodation operator must also be aware of their responsibilities as commercial business operators hosting paying guests; No, standard house and contents insurance will not cover paying guests if something happens. Yes, the ATO does consider income from home sharing as income. Ultimately, we want every participant in our visitor economy Irrespective of who you are, what your property is and what booking platform you use to get your guests, every accommodation operator must also be aware of their responsibilities as commercial business operators hosting paying guests.
to represent the Tasmanian brand for quality visitor experiences and commit to the standards and expectation the industry sets itself. The emergence of Airbnb has been a very challenging issue for the Tasmanian tourism industry and remains one we need to continue to monitor and respond to carefully. But we have moved beyond disruption and as an industry we need to embrace the opportunities of this major new player and the many Tasmanians who have used these platforms to become a permanent part of our industry and the broader visitor economy.
