Airbnb boom irks motels

Eileen Dawber in her Airbnb unit on her Highcliff Rd property. Ms Dawber said she built the unit for overseas friends to stay in, but since August last year it had shown 75% occupancy as an Airbnb. She did not agree with plans to increase rates for properties providing short-term accommodation. Her operation helped provide accommodation in a city that had a shortage at times. ‘‘I don’t feel I’m taking away from the motel industry; I feel I’m supporting them.’’ Photo: Stephen Jaquiery

The news has angered commercial operators, who want the Dunedin City Council to introduce a rating system so all accommodation providers are on a level playing field.

That may happen as soon as this year.

Mayor Dave Cull said yesterday the council could use a special consultative procedure to introduce new rules for Airbnbs that ''contribute nothing'' to areas like city marketing.

A report that will be discussed by the council's economic development committee next week shows strong growth in Airbnb in Dunedin.

''The data suggests that Airbnb is becoming a genuine rival to traditional accommodation operators, offering more choice in terms of price and location,'' the Infometrics report says.

The number of listings rose 56% between the three months to February last year and three months to February this year.

The increase in supply meant there was a ''large lift'' in nights booked, up 75% in the period this year compared with last year.

There were 1216 listings and 64,595 guest nights.

A higher price per room meant Airbnb operators earned ''significantly more'' this summer than they did last summer.

The price per room rose from $61 on average to $83 this summer.

Total earnings rose 131% between the two summers.

All up, the cash injection for the city was almost $4.4 million during the period, up from almost $1.9 million a year earlier.

The report also looked at commercial accommodation.

Growth in that sector was just 0.8% in the last year.

There were, however, 928,643 guest nights logged in the 2017 calendar year.

Otago Motel Association president Alex Greenan said the association wanted the council to do something.

''I'm told there's a working party working on this, but it's very slow,'' Mr Greenan said.

The association spoke at a public forum a year ago, asking for action.

Airbnb affected the industry ''hugely'', as hoteliers had to abide by fire and other regulations, had to pay higher rates and had higher expenses.

Mr Greenan said that meant Airbnb could offer a cheaper price.

The association wanted a level playing field.

Ratepayers were missing out under the current set-up and Airbnbs were having a ''huge effect'' on the rental market.

''Rents are going through the roof.''

Mr Cull said yesterday the council was still considering what to do, so any response would not be in the 10-year plan being worked on at present.

But he believed there needed to be extra rates charged to Airbnb operators.

One reason the council was moving slowly on the issue was the local government sector was discussing with the Government mechanisms for funding visitor infrastructure.

One option was a bed tax, which would apply to all accommodation, and may mean rates could drop for commercial operators.

''We are more and more aware that action needs to be taken, and that Airbnbs need to be brought into the fold.''

Mr Cull said the council put several hundred thousand dollars a year into marketing the city, and accommodation providers benefited from visitors who arrived as a result.

''Airbnbs are among those and they contribute absolutely nothing to that marketing effort.''

He said the council might look at the issue this year and undertake a special consultative procedure if necessary.

''I would like to progress this.''

david.loughrey@odt.co.nz