Hotels face fierce competition

Hotels face fierce competition

Kelly Marie Smith, ECU Journalist

What started as a way to share an experience or a room in someone else’s house, is quickly becoming stiff competition for the hotel industry in WA.

The number of Western Australian Airbnb hosts has increased by more than 50% in the past year, bringing the total listings to more than 8000.

The report by Bankwest Curtin Economics Centre (BCEC), shows that Airbnb supply in WA is increasing at about 4% per month, with the monthly earnings of WA hosts in total exceeding $4.5 million.

There have been mixed responses to the report among tourism stakeholders in WA, who see it as a positive move for the tourism industry, as well as a danger to the conventional accommodation division.

Professor Ross Dowling at ECU, believes increased Airbnb supply and demand will have a positive impact in WA.

“In recent years there has been a move away from the ‘traditional economy’ to a ‘sharing economy’, as illustrated by the rapid rise of Uber in the transport industry.

“Many tourists prefer Airbnb because it offers cheaper accommodation, a more authentic experience and is often located nearer to where they want to stay,” he said.

But the rise in Airbnb supply and demand has also been met with negative feedback from industry groups.

More than 60% of the listings on Airbnb in WA are renting out whole houses or apartments, which to others in the accommodation industry shows that some hosts are using Airbnb as a commercial business.

Bradley Woods, CEO of Australian Hotels Association WA, states that while the accommodation industry has no issues with property owners providing genuine share accommodation, the home must continue to function predominately as a primary residence.

“Existing regulations need to be enforced and new regulations implemented to prevent commercial operations exploiting the online distribution system and operating ‘quasi hotels’ that don’t comply with fire safety, disability access, employment, insurance and taxation requirements required of other commercial accomodation operators.”

Mr Woods believes that enforcing a ‘One Host, One Home’ policy to remove commercial operators would significantly mitigate the concerns of the accommodation industry.

“New regulations are necessary. In San Francisco and New York, Airbnb has agreed to a One Host, One Home policy limiting hosts from advertising listings at more than one physical address.

“In these cities, Airbnb has declared that commercial operators are ‘unwelcome’ on their platform, and has committed to removing those listings,” Woods said.

In agreement with this idea, Professor Dowling believes that new regulations are vital for the future of Airbnb in WA.

“I think that the government should regulate Airbnb and introduce a formal partnership like they have done in San Francisco. This will make it a lot safer and more transparent for tourists, Airbnb operators, and the Government regulators.

“Overall, Airbnb is here to stay, so now the Government has to play catch up in this accommodation sector of the hospitality industry.”

The full report can be viewed here.