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Hotel industry spars with Airbnb at public hearing

October 18, 2018 Headline News No Comments Email Email

A leading hotel industry group and Airbnb have been putting on record their respective (and sometimes diametrically opposed) views of the future of accommodation to a parliamentary hearing – with the Accommodation Association of Australia calling for a point-of-consumption tax to be levied on sharing economy accommodation providers.

The chief executive of the Accommodation Association of Australia (AAoA), Richard Munro, delivered a strong opening statement to a public hearing in Launceston, part of the Legislative Council Select Committee inquiry into short-stay accommodation in Tasmania. He contrasted the position of AAoA members with that of Airbnb.

“The Accommodation Association is the national industry body for Australia’s accommodation industry,” Munro said.

“Members of the Accommodation Association include major hotels, resorts, motels, motor inns, serviced and holiday apartments, bed and breakfasts, guesthouses, backpackers and timeshare establishments in metropolitan, regional and rural Australia, across all states and territories.

“The association’s members include major hotel and motel chains, and serviced apartment groups. The association’s membership base includes almost 2000 properties and more than 110,000 guest rooms. There are 88,800 people employed in the accommodation sector of the Australian tourism industry.”

Then Munro looked at Airbnb.

“By comparison, Airbnb directly employs very few people in Australia… most likely in the hundreds. Airbnb’s claim that it supports Australian jobs is ‘spin’ in the extreme – the reality is the rapid emergence of this offshore global giant has directly resulted in fewer jobs in the traditional accommodation industry.

“Unlike the traditional accommodation industry which pays millions of dollars in taxes in Australia to the Federal Government, state/territory governments and local government (including council rates), Airbnb has refused to publicly state how much tax it pays in Australia.

“Our industry wonders if Airbnb actually pays any substantial amount of tax in Australia…

“There isn’t much doubt the explosion of Airbnb is raising consumer safety issues – last week we saw the tragic death of a young boy who was hit by a swing at an Airbnb property in Queensland. Also, a teenager died after being stabbed at an Airbnb apartment in the Melbourne CBD in late July.

“Another significant negative consequence of Airbnb is the pressure it is placing on housing affordability.

“It should be particularly unpalatable to public policy decision-makers that Airbnb is spending thousands of dollars on expensive consultants to deliver major reports which support its hollow spin on the housing affordability issue.

“The Accommodation Association respectfully urges the committee to disregard any report by a third-party which is paid for by Airbnb on the basis that it is not independent evidence.

“Housing affordability a serious problem which should be treated accordingly.

Hobart Tasmania

“Tangible evidence of how the likes of Airbnb are damaging housing affordability can be found in University of Sydney research which has just been released that shows in the Byron Shire Council area of NSW, over 17% of all housing is listed on online holiday rental platforms,” Munro said.

“Let’s be clear – our industry welcomes competition, but it’s hard to compete with the likes of Airbnb when the regulatory playing field is not level.

“In terms of the way forward, as our submission to this inquiry states, the number one priority when considering the regulation of tourism accommodation/short-term letting in Tasmania must be the safety and security of guests.

“Traditional accommodation providers are stringently regulated such that they have to meet high standards for building fire safety, disability access and having the relevant insurances in place – very few, if any, Airbnb properties meet these same requirements.

“It should be compulsory for any property which sells accommodation to be registered with the Tasmanian Government and failing to do this should attract a fine of not less than AUD 1 million per property.

“Our industry does not support any scenario which permits a group of residential apartments to operate as a quasi-hotel. The emergence of quasi-hotels is one of the most significantnegative consequences of the lack of regulation of sharing economy accommodation in Australia.

“A point-of-consumption tax on sharing economy accommodation providers, including Airbnb, should be introduced, with the tax to be imposed according to where the transaction to purchase accommodation takes place – which would capture residential properties in Tasmania being booked through Airbnb and other sharing economy platforms.

“Lack of regulation of sharing economy platforms in Australia has resulted in Airbnb management companies gaining a foothold in Australia, further eroding income and investment from existing operators in the Australian tourism industry.” 

Airbnb placed the following points on record before the same inquiry:

  • “Airbnb’s community continues to support the growth of the visitor economy in Tasmania, providing more choice for consumers in more locations across a variety of price points.
  • “The broader tourism sector continues to prosper and grow as Tasmania leads the country in terms of growth in both overnight trips and spending by domestic visitors, with Tourism Research Australia’s latest International Visitor Survey and National Visitor Survey also reinforcing the buoyant state of Tasmanian tourism.
  • “Airbnb’s community is an important contributor to the Tasmanian economy as the latest research shows that Airbnb guests who stayed in Tasmania spent AUD 86 million, which supported 599 jobs and contributed AUD 55 million to Gross State Product.
  • “The Tourism Industry Council Tasmania’s ‘Autumn 2018 Business Sentiment Survey’ also shows how positive and confident the industry is. The Business Confidence Index for April 2018 is 101.5 points – which is higher than any point in 2017, the year when the Tasmanian Government’s new short-term rental accommodation regulations took effect.
  • “Housing policy is a complex public policy issue and given this complexity, any mature and prudent debate must look at the real drivers of affordability, including market factors and policies across Commonwealth, State and local governments.
  • “Locally, Airbnb is not a significant factor in the local housing market. In 2017, total booked entire listings represented less than 2% of Tasmania’s and less than 1% of Hobart’s housing stock.”

Airbnb also stated:

“Airbnb has continued to grow into a significant presence in Tasmania, and it plays an increasingly vital role in the visitor economy. The Airbnb Homes platform is used by a broad spectrum of hosts, ranging from people who make extra income from sharing space in their own homes, to the long-established holiday letting and shack industry, and even to traditional accommodation providers who increasingly list their businesses on our platform.

“The Airbnb Experiences platform is used by hosts who are creatives, artisans, and small businesses as an online platform to share their passion with the world and unlock their time and potential to create new economic activity.

“We have a large community of people across Tasmania for whom sharing their home is now part of their lifestyle. The sharing economy helps to build resilient communities where locals can create supplemental income, and robust economies that are supported by increased visitation and spending by Airbnb guests – often in areas that do not traditionally benefit from the tourism dollar. This is especially important in regional communities which may not have adequate traditional accommodation infrastructure to support the visitor economy, or may not be able to attract investment to build new accommodation for the growing visitor economy.

“In the past 12 months to 1st August 2018, our Homes community welcomed over 366,000 guests across the state – both domestic and international travellers. There are currently 5,000 active Airbnb listings in Tasmania, and over the past twelve months to 1st August 2018 a typical Airbnb host in Tasmania earned AUD 9800, supporting hosts with supplemental income from sharing their spare space.

“71% of hosts in Tasmania are women and the average host age is 51, with more than 35% hosts aged 60 or older.”

 

Edited by Peter Needham

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