In just one decade, beginning in 2008, the Airbnb phenomenon has spread into 65,000 countries across 191 countries to have four million listings – more than the top five hotel chains combined.
In Wagga, the Airbnb website shows 127 listings as of July 11. In comparison with Sydney and Melbourne, data by Inside Airbnb – a separate entity to Airbnb – shows 32,830 and 20,406 listings, respectively, as of February 4 this year.
While Airbnb has enjoyed success, growing from three million guest arrivals in 2012 to 100 million in 2017, it has also been in the spotlight for its disruption to the hotel and motel industries, as well as for negative experiences by both guests and hosts.
However, Wagga host Glen Oakman, who recently received the status of ‘superhost’, said that the ‘shared economy’ of Airbnb works if hosts commit to high-quality customer service.
“You’ve got to be committed to it. It’s not something you do just as a hobby, otherwise it may be headaches for you.
“The guests also won’t be getting the experiences they’re looking for either,” Mr Oakman said.
He has eight listings in Wagga – seven in the central precinct and one in Kooringal. Two of those are at The Mill Residence.
A former real estate agent, Mr Oakman’s sole focus has been on his Airbnb premises for the past two years.
“Airbnbs are much more rewarding because you’ve got the ability to give them [guests] great experiences, which for me is what it’s all about.
“It’s providing customer service and properties with wow factors,” he said.
Airbnbs are much more rewarding because you’ve got the ability to give them [guests] great experiences, which for me is what it’s all about.Glen Oakman, Airbnb host
Finding a gap in Airbnb services
As well as hosting short-term stays, Mr Oakman also provides leadership for other hosts, which he said was a gap.
“It’s about helping other hosts who want to achieve the superhost status, which includes being able to assist other them with questions and answers, as well as leadership,” he said.
The aim is to elevate the Airbnb industry higher.
“When guests have negative experiences, that affects the whole Airbnb industry. It kills the industry.
“So we want everyone to do the right thing because it’s a sharing community, basically.
“People have had great experiences using Ubers so Airbnbs are similar to them,” he said.
Asked about the disruption to traditional short-term letting, Mr Oakman said it was a positive to introduce changes and innovation to any market.
“Because a lot of my properties are large, it’s usually cheaper to stay at one of them than at a hotel,” he said.
Hotels performing well
Hotels, meanwhile, seem to be faring well. Edition one of the 2018 Tourism and Hotel Market Outlook report by Deloitte Australia concluded that hotels across the country recorded gains across key indicators in 2017.
“Room occupancy added one percentage point over the year to reach 68.5 per cent,” the report reads.
“Looking ahead, Australia will see a significant number of new hotel properties come online over the forecast period which will have a strong impact on trading conditions.”
Mr Oakman said that investments in Wagga’s hotels showed that there was still a space in the market for them.
“People wouldn’t be investing millions of dollars if they didn’t think it would be viable for growth,” he said.
Not competing on same level
However, Ward Gaiter, owner of The Duke Hotel, said that while Airbnbs occupied the same market space, they were not competing on the same “playing field”.
“Airbnbs and the likes are operating under a completely different business models to commercial operators.
“We’ve got to stay compliant and they don’t. We’re registered for GST but I’m not sure if they are.
“I don’t mind competing on a level playing field, but it’s now an industry where you’ve got two different players in the same market – commercial and private,” Mr Gaiter said.
“Airbnbs are an unregulated part of the lower-end accommodation market,” he said.
Code of conduct introduced
As short-term letting is currently unregulated in NSW, Better Regulation Minister Matt Kean introduced reforms on June 5 that would impose caps on the number of days empty properties can be rented Airbnb-style, which would give strata corporations the power to ban Airbnb in their buildings.
For greater Sydney, that is 180 days while it is 360 days for the rest of NSW.
“Hosts or guests who commit two serious breaches of the code of conduct in two years would be banned from all platforms for five years.
“These will be the toughest laws in the world,” Mr Kean said.
Companies that breach the code of conduct will face financial penalties, including fines of up to $1.1 million for corporations and $220,000 for individuals.
Mr Oakman said that the code of conduct was “an interesting approach for the cities”.
“I can see that in some respects, it’s probably a good idea in the cities. In Wagga, we don’t have enough accommodation a lot of the time. Wagga needs more accommodation supply – especially on peak weekends.
“Airbnbs provide that,” he said.
“If they’re going to regulate and limit the number of Airbnbs in regional cities, like Wagga, it’s only going to be a detriment for people wanting to visit Wagga and bring money into the town.”