Airbnb is taking a substantial bite out of the profits of traditional regional motels and hotels, new data has shown.
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But while one traditional operator has called for "a level playing field", an Airbnb proponent said the market needs to adapt.
Tourism Research Australia figures show a 29 per cent rise in visitor nights spent in regional areas in the five years to 2018, but motel operators have seen little benefit, according to the data from IBISWorld.
David Sheldon, who operates Elm Cottage near Tumut, was concerned traditional homes were being used to provide paid accommodation, without owners having to shoulder any additional regulatory burden.
His worries have been aired at a time when the state government is considering reforms including a new code of conduct to be followed by all participants in the short-term rental accommodation industry, including hosts, guests, online platforms and agents.
"With Airbnb, there is no DA [development application] requesting compliance. They don't have the same outgoings that we do. We have to pay commercial rates," Mr Sheldon said.
"I really feel for motels and hotels who have to jump through hoops to become compliant. Councils are turning a blind eye to Airbnb."
Mr Sheldon also expressed concern about whether people who used Airbnb would have poor experiences which would, in turn, sour them on returning to the region at all.
"Accommodation is the target point for people when they visit a new area," he said.
"If they don't have a good experience with accommodation, it could affect their opinion of the region and whether they will want to come back here."
Wagga's Len Masson has been hosting visitors through Airbnb for 18 months.
"We have had hundreds of different travellers from 32 different countries," Mr Masson said. "People will choose where they want to stay.
"In business, there is no protection. I once ran a takeaway business in another town. It was doing great, then other people began copying me.
"Local hotels and even the fruit and vegetable shop started to offer some of the same food as my takeaway.
"We had to pull our socks up and do our jobs better and perhaps do something unique again."
Mr Masson said his experience was that people who used Airbnb were often interested in having a home experience that included joining the family for a meal and conversation.
"We are available to people 24 hours a day. If someone calls at 1am and says they are in Wagga, travelling through, and need to stop and sleep, they [come to] us.
"Businesses have got to adapt. It's an open market and people can participate, or not, in an open market. I can understand there would be a loss of business."