Airbnb needs to be seen for what it is – an unregulated operation that supports neither jobs or the economy

December 18, 2014

The crackdown on unlicensed taxi drivers operating for Uber in NSW has interesting parallels for our accommodation industry.

Airbnb has been receiving quite a deal of attention in Australia recently, as they launch a strong campaign to win both public and Government support for their accommodation model.

Just as with Uber, they portray themselves as a fresh-faced innocent meeting new market demand, coming up against established businesses who simply want to protect their own patch.

The reality is that Airbnb is not generating purely incremental market demand.  It is however tapping into changing consumption patterns and the exponential growth of Airbnb demonstrates that it is meeting a customer need.   Our concern is that it is doing that without meeting the necessary obligations imposed on licensed operators in the accommodation industry.

It is essential that we articulate the ‘real’ position to governments and media and expose what is effectively an unlicensed, unregulated and often illegal accommodation operation which has serious implications for users and the wider community.

The visitor accommodation sector currently generates 70,800 direct jobs and over 117,000 jobs through flow-on impact.  It contributes over $9.2 billion to Australian household income and is estimated to have contributed close to $800 million in Australian Government tax revenue during the 2012-13 year.   Airbnb on the other hand, contributes to neither jobs nor the economy.

While governments may be concerned about losing taxation and other benefits from the proliferation of such services, what has the potential to influence the wider public are the issues of safety and reliability.

There have been a number of letters in the Sydney Morning Herald Traveller section recently outlining cases of people arriving in a city only to find the Airbnb establishment unavailable, despite having a confirmation email. This is what most concerns travellers, along with the possibility of something serious happening that affects their safety.

That situation was illustrated graphically when a fire spread through unlicensed student accommodation in an old Alexandria factory earlier this year-

Certainly this is on the more extreme side, but the ‘grey areas’ of unregulated and unlicensed accommodation are precisely the areas that our industry needs to highlight when discussing the issue. It is only when something goes wrong that people tend to examine the issue in greater detail and assess the inherent dangers.

It is important for members to argue the case based on facts rather than emotion. Airbnb have been conducting a slick PR campaign that has largely gone unanswered in the media, and this in turn has the potential to influence politicians.

I recently put our industry’s case to a State MP and some of the key points revolved around the safety issue.

Under the Australian Building code requirements there is a significant investment made by accommodation providers to ensure that they meet the safety and accessibility standards.   Most of the Airbnb options have very few, if any, public safety measures in place for guests that traditional operators are required to have in place. This could be the installation of approved smoke alarms, the provision of evacuation and emergency procedures and the purchase of suitable public liability insurance to cover guests if accidents do happen.

Hoteliers make significant investments to provide safe and innovative customer experiences – and being ‘innovative’ – as Airbnb likes to portray itself – is no justification for ignoring the laws and regulations. 

Unlicensed operators have no requirement to meet the needs of travellers with disabilities or special needs. There is also the issue of extra noise and traffic when private accommodation is sub-let, and there is a considerable issue of security when unlicensed operators provide access to short-term stays in apartment blocks.

In addition there is no consumer protection for Airbnb customers. These measures cost licensed accommodation providers millions of dollars and it should be mandatory that Airbnb customers have access to the same consumer protections and avenues for redress.

Clearly, provisions under body corporate, local council, State and Federal Government requirements are being flouted.

For these authorities there is also the very serious issue of unlicensed operators not paying appropriate levels of taxation, fees and other charges. This impacts the whole community, not just the accommodation sector.

Ultimately mechanisms need to be put in place to ensure that products such as Airbnb are regulated, as unfettered growth could result in a reduction in investment in legitimate accommodation solutions and therefore a loss of jobs in the future.   The government should not pick winners and losers in the marketplace.  Ensuring short-term online rental companies adhere to the same city, state and federal regulations as hoteliers is absolutely crucial if there is to be a level playing field within the accommodation sector.