'Hotels are healthy and their future is as bright as ever': Airbnb
OPINION
It turns out that reports of the imminent death of hotels were greatly exaggerated. Overzealous, oversized predictions that the sharing economy would be the death knell of traditional hospitality have not materialised. In fact, the reality is quite the opposite.
Tourism is booming in Australia. The latest International Visitor Survey released this month showed the number of international visitor arrivals to year end 2017 grew 6 per cent to 8.1 million, nights booked increased by 5 per cent to 265 million and visitor expenditure increased by 6 per cent to $41.3 billion. Hotels are one of the main beneficiaries of these boom times.
The simple fact is Australian hotels are healthy and their future is as bright as ever before. Arguably if the sharing economy was having a material adverse impact on traditional operators you would see three things happen – occupancy rates would fall, revenues would decline and the number of hotels being built would dry up.
However, none of these things have happened, and they aren’t forecast to happen. Deloitte’s recent Tourism and Hotel Market Outlook 2018 found “hotels across the country performed well during 2017”, with room rates and revenue both growing solidly.
The number of hotels in Australia is growing. Photo: Tamara Voninski
In addition, more than 5500 new hotel rooms and serviced apartments came online last year, and in 2019 and 2020 hotels are expected to increase total supply by 3.4 per cent a year. Melbourne alone has more than 50 active hotel development projects. Hardly the image of an industry that is struggling or on its knees.
Crucially, the growth of local hotels has occurred at the same time as our Australian Airbnb community has grown. Last year alone, our community grew to more than 181,000 listings in local cities and communities across the entire country. It is proof that accommodation is not a zero-sum game, and that for Airbnb to grow, no hotels have to shrink.
Our community has grown alongside – not at the expense of – traditional accommodation.
Airbnb grows the tourism pie by making travel more accessible, attractive and affordable for more people. We know one in three people only travel because of Airbnb. They are drawn to our unique, authentic listings, affordable pricing and the warm hospitality of our host community. All things being equal, a person sleeping in a spare room was not likely to have stayed at a 5-star hotel.
Importantly, our growth is actually helping many small, independent hotels. Airbnb spreads the benefits of tourism to the places that have traditionally missed out, like the suburbs and regions. Airbnb guests staying in these areas shop in local stores and have a meal or drink at local cafes, restaurants and pubs.
The pool at the recently-opened Sofitel Hotel Darling Harbour. Photo: Geoff Lung
We are also increasingly seeing unique B&Bs and boutique hotels, the kind that offer local and authentic experiences, list on Airbnb.
Last year, globally we saw a 520 per cent increase in boutique hotel listings, a 100 per cent increase in the number of B&Bs listed to more than 180,000 and more than 24,000 boutique hotel rooms listed. They are listing with Airbnb to enjoy access to a global community of travellers, lower fees than online travel agents which can charge up to 30 per cent, and our trust and safety features.
Yet, despite the robust state of the market and more hotels being built, vested interests like the Tourism Accommodation Australia and the Accommodation Association of Australia, are doing their utmost to talk the industry down.
It is part of their Dr Jekyll and Mr Hyde lobbying strategy. One minute they are talking up the health of hotels and the building boom, the next minute they are talking hotels down and calling for protectionist red tape. In front of investors or buyers, they’ll tell you hotels are booming; in front of policy makers, they’ll say hotels are under pressure and need help. It is a strategy they believe will lead to more red tape for home sharers and protect the bottom line of their members.
It is time for the big hotel lobby, including Tourism Accommodation Australia and the Accommodation Association of Australia, to recognise there is room for both hotels and Airbnb.
Home sharers aren’t hotels and shouldn’t be regulated as such. Instead, let’s work together to grow the tourism pie and benefit everyone in the tourism industry – from home sharers, hotels, workers, local shops and restaurants.
Brent Thomas is Airbnb’s head of public policy Australia & New Zealand
