Short term rental industry thriving

Wednesday 27 June 2018

Increased costs are now facing many Airbnb hosts around the country – but those hosts are not going anywhere as the industry grows in size and professionalism.

By Miriam Bell

Councils in Queenstown and Rotorua now impose commercial rates on short term rental accommodation providers when their properties are rented out for over a certain number of days a year.

But other councils around the country are also poised to introduce similar systems. These include Tauranga, Christchurch, Westland and, notably, Auckland.

Auckland Council is planning to apply higher commercial rates to properties that are let on short-term rental platforms, like Airbnb or Bookabach, for more than a certain number of nights a year – although the rate charged will vary.

Auckland Mayor Phil Goff has also announced that short term rental accommodation providers will now have to pay the targeted accommodation rate, or “bed tax”, already levied on hotels and motels in the region.

Plans to impose new charges and levies on short term rental providers have come to the fore as rental markets around the country have become increasingly stretched by shortages in rental stock.

Despite these changes – which are not popular with many Airbnb and Bookabach hosts – the industry itself shows no signs of going anywhere.

Global property tech business Airsorted, which facilitates the management and marketing of Airbnb rentals for property owners, set up shop in Auckland just three months ago.

Airsorted Auckland manager Frances Mannion says that, in the time since, they have doubled their business and the number of properties they manages as demand for the service continues to rise.

“Setting up the new office here has been extremely well received. Short term letting is becoming more popular as a lucrative additional income for many.”

Airsorted plans to expand their business into Wellington and Queenstown by 2019, she adds.

Further evidence that the industry is thriving came in a recent Deloitte report, Economic effects of Airbnb in New Zealand.

It found that, in 2017, New Zealand’s Airbnb community hosted 1.4 million guests and those guests spent approximately $781.4 million.

In turn, the community contributed around $660 million to the New Zealand economy supporting 6,006 full-time equivalent jobs.

While Auckland is a major player in the industry, the report found that over two-thirds of Airbnb’s economic activity actually occurred outside Auckland.

Airbnb’s Head of Public Policy Australia and New Zealand, Brent Thomas, says Airbnb is an economic shot in the arm for family budgets and local communities across New Zealand.

“The Airbnb community is helping locals earn extra income, turbocharge the economy and create more local jobs.

“Airbnb’s kind of healthy, sustainable travel spreads the benefits of tourism to the places that have traditionally missed out, like the regions.”

But – for those thinking about moving into the short term rental accommodation sphere – experts continue to caution that location is critical to the success of any such ventures.

Read more:

Looking beyond the Airbnb glitter 

Airbnb profits for landlord not tenant 

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