Airbnb's 'explosive growth' gobbles Queenstown

Tuesday, 15 August 2017

The tourism industry has been urged to 'embrace' the surge in Airbnb listings in visitor hot spots such as Queenstown.

One in 10 dwellings in the Queenstown Lakes District are listed on Airbnb, with hosts earning more than double than their counterparts elsewhere in New Zealand.

An Infometrics report based on analysis of Statistics NZ and Airbnb data said the 2000 Queenstown Lakes Airbnb properties translated to about 10 per cent of the district's 20,000 dwellings.

That was a much bigger proportion than in Auckland where the 7000 listings represented about 1.3 per cent of the city's 540,000 dwellings.

Queenstown hosts, cashing in on the demand for resort accommodation, earned $8600 a year on average, compared with $3200 in Auckland and $2900 in the rest of the country.

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Infometrics report author Benje Patterson said in the year to March Airbnb had nearly 20,000 New Zealand listings and they earned $55 million.

Airbnb, an online accommodation booking service, said it had since grown to about 29,000 listings.

Patterson said its 'explosive growth' should be welcomed as a way of managing peak tourist demand because new hotels cost a lot to build and their occupancy was relatively low outside the summer months.

'Many New Zealanders have spent way too much money on housing, so why not accept them using the asset productively as being a sensible choice?'

Although Airbnb was having 'a significant nibble around the edges of the tourism sector,' it still made up a tiny percentage of total guest nights – just under 1 million compared with almost 38.5 million for commercial accommodation.

Patterson said that was because of Airbnb's lower occupancy rates – hosts did not necessarily have visitors year round, instead filling up rooms at busy times, or renting out their house periodically when they were out of town.

Commercial accommodation operators have long complained they have to meet a raft of regulations – governing everything from fire safety to food safety – that Airbnb operators do not.

Tourism Industry Aotearoa's (TIA) Queenstown hotel spokesman Brian Howie said it was not a level playing field.

He acknowledged Airbnb helped with the overflow of visitors in peak season, but said it brought other problems.

'The reduction in housing stock for seasonal workers is one of the key concerns we've got.'

Queenstown's housing issues have been well-documented. Building in the resort is more expensive than in Auckland, competition has driven many out of the buyer's market and a supply and demand imbalance has driven up residential rent costs.

A recently-released Collier's International report said visitor accommodation occupancy rates averaged about 70 per cent in the year to March 2017. The resort needed an estimated additional 300 new rooms every year to meet projected growing demand, Colliers valuation and consultancy director John Scobie said at the time.

Hospitality New Zealand advocacy and policy manager Dylan Firth said Airbnb raised the same fairness issues as Uber did for the taxi industry and the Government was not prepared to do anything about it.

The running costs for a commercial accommodation provider were probably five or six times the cost of putting a block of six apartments on Airbnb, he said.

TIA chief executive Chris Roberts said the New Zealand market had absorbed the rapid expansion of Airbnb because tourism had grown strongly in recent years, so it was complementary rather than a 'threat' to commercial accommodation.

Patterson's suggestion the tourism sector needed to 'get over itself and extend an olive branch' to Airbnb and holiday home rental websites did not go down well.

'The industry would be happy to engage more with Airbnb. We have repeatedly attempted to do so, but this has proved very difficult,' Roberts said.

'Airbnb keeps itself at arm's length.'

Patterson argued that the tourism sector and the Ministry of Business, Innovation and Employment should work together to support private accommodation providers by running regular host training workshops covering service standards and ensuring they had information about guest activities in their area.

Roberts said if there was an demand for host training, it would be best done by Airbnb.