Report shows Airbnb growth stronger than that of hotels

THE strong growth of Airbnb is threatening the profitability of more traditional accommodation.

AIRBNB is making strong gains on “traditional” tourism accommodation such as hotels, despite the legality of the short-term rentals remaining unclear.

The Deloitte Tourism Hotels Market Outlook report released on Thursday shows nights in “alternate” accommodation like Airbnb and other private rentals increased 8.7 per cent in the last year.

In contrast, the growth in domestic visitor nights spent in hotels slowed sharply from 9.7 per cent to just 1.2 per cent last year.

The increasing popularity of Airbnbs was driven predominantly by the leisure market (11.5 per cent growth) and people visiting friends and relatives (9 per cent).

The report noted that “partnerships such as that between Qantas and Airbnb which allows guests to earn Frequent Flyer points during Airbnb stays were serving to consolidate Airbnb as a mainstream accommodation option”.

Qantas is so committed to its new partnership with Airbnb it's even changing the logo on some of its aircraft. Picture: James Horan

Tourism Accommodation Australia CEO Carol Giuseppi said the report highlighted what they had long argued — Airbnb was growing at the expense of hotels.

“Our members were very angry with (Qantas’) decision to support Airbnb when our hotels have played such a crucial role supporting their frequent flyer program,” said Ms Giuseppi.

“Unregulated short-term operators who advertise through online platforms such as Airbnb, are moving increasingly into commercialised operations that are quite different from the original ‘share’ concept.”

Airbnb is growing at a faster rate in Australia than hotel visitor nights. Picture: AFP/John MacDougall.

But Deloitte Access Economics’ Bryon Merzeo said he did not believe Airbnb’s gains were hurting more traditional tourism accommodation providers.

“(Airbnb) is growing quite strongly but we’re still seeing historic occupancy rates in hotels in capital cities,” said Mr Merzeo.

“It’s not going to be the same across the entire country — in some of the regional areas you might see a little bit more of an effect on the traditional accommodation properties.”

The report also showed 12,800 new hotel rooms were planned across Australia in the next two years but demand was still expected to outstrip the supply.

“Tourism Australia is doing such a wonderful job attracting people to this country that even with all these new hotels were building. and the popularity of these new accommodation options, people are filling up all the available rooms,” Mr Merzeo said.

“Demand growth will continue to outpace that supply growth.”

Home comforts or hotels? Picture: Supplied

However Ms Giuseppi was less optimistic due to the uneven playing field on which hotel operators competed with Airbnb.

“These hotels are creating jobs and income for the country, but are disadvantaged compared to these short-term operators who are not required to conform to regulations, nor do they contribute to job creation,” she said.

Originally published as Report shows Airbnb growth stronger than that of hotels