Airbnb inquiry: NSW parliament investigates short-stay rentals

Short-term accommodation through Airbnb could be a boon for regional tourism, a New South Wales parliament inquiry has been told.

On Monday the NSW Legislative Assembly environment and planning committee will hold its first public hearing into the adequacy of the regulation of short-term holiday letting, including websites such as Airbnb and Stayz, which allow people to lease a spare room or their entire dwelling to short-term guests.

The head of the Australian Regional Tourism Network, David Sheldon, has said the websites allow accommodation operators access to an untapped market, and could meet demand when regional economies are unable to attract tourism investment.

But representatives of backpacker accommodation accused the websites of having an unfair advantage over the regulated accommodation industry, and posing a potential threat to the safety of guests.

In his submission to the committee, Sheldon said a lack of suitable accommodation has held back tourism in regional Australia – which he said attracted about half the national tourism expenditure – and short term letting fills the gap in some cases.

He suggested the online systems had already benefited many established accommodation operators who were now able to reach a previously untapped pool of consumers, “resulting in increased occupancy, viability and economic benefits to the visitor economy and host region”.

The ARTN submission also said an extra benefit came from the utilisation of “lazy assets” – semi-abandoned buildings vacated after downturns in local industries – as short-term accommodation options.

“This not only reactivates the asset but presents the location as an active landscape – critical for consumer confidence and community pride.”

The organisation, however, expressed concern at the speed Airbnb and similar systems have attracted “inexperienced players into the market”.

“This growth has been faster than the response of the tourism industry and government to understand and work with it for the benefit of all,” it said.

It called for consistently applied accommodation categories, and proposed that development-approved short-term accommodations be recognised as “council approved” so as to stand out from unapproved properties.

The Bed and Breakfast and Farmstay Association of NSW ACT also expressed concern at the inequity between regulated and unregulated accommodations sharing the same advertising space, noting compliance costs for an average BB were more than 15% of annual turnover.

“While some of our members use these platforms for example Stayz, Wotif, Airbnb and Windu, the vast majority of users are not BBFA members. These may not be compliant with regulations,” read its submission.

The Holiday Letting Organisation, from the NSW central coast, welcomed the increase in business digital facilitators such as Airbnb had brought to the region, but also called for better regulation.

It recommended a local government and industry co-regulation structure, taxation, and either a government or industry body to oversee the NSW holiday rental code of conduct.

On behalf of the Backpacker Operators Association NSW (BOA), secretary Robert Henke said there was concern the site was facilitating a “boom” in unregulated and potentially illegal accommodation.

Chief executive of YHA Australia, Julian Ledger, called for prosecutions of Airbnb operators who flouted fire regulations and threatened the $4.4bn backpacker industry.

BOA accused Airbnb of taking a “hands-off, laissez-faire attitude” to the commercial hosting by landlords and agents, and sought a level playing field for its members who run “compliant, highly regulated accommodation businesses”. He said those in the “sharing economy” of Airbnb and Stayz had an unfair advantage over business operators in being able to bypass costs, regulation and taxes.

Henke added, however, that BOA’s biggest concern was for the safety of short-term travellers to the state.

Airbnb listings in Sydney have grown by 80% in the past year, and BOA said the majority of it was entire houses or apartments rather than a spare room or couch.

“The downside of this for NSW residents is that in order to rent out a whole house or a whole apartment on Airbnb, relatively low-yielding longer-term tenants are replaced with short-term occupancy. This has nothing to do with unused resources, it is simply replacing tenants with tourists.”

Sutherland Shire council said the rental of private rooms and dwellings within its region were often of a lower standard of accommodation than regulated options but in “favourable locations”, and the informal arrangements often captured otherwise unearned income.

However, while it could boost tourist numbers, short-term rentals were difficult to regulate, not taxed and could negatively affect “neighbourhood amenity, the neighbour’s conception of security and the safety of the affected neighbourhoods”.

Some councils in high tourism areas, such as Byron Bay, are looking to amend regulations and allow short-term rentals of rooms or dwellings.

The public hearing begins on Monday at Tweed Heads. It will hear from local councils, accommodation organisations, real estate agents and residents.

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