Hotels

The heartbreaking consequences of Airbnb on small hotels

Daisy Doctor

The threat of Airbnb to the hotel industry is nothing new.

Larger hotels and hotel chains are feeling the full brunt of the sharing service in ways nobody could have predicted.

But what is it doing to small hotels and hostels in smaller, more remote areas?

Well, as it turns out, it’s absolutely devastating businesses.

Case in point?

A short-term accommodation provider in regional Victoria run by Mohya Davies which has had to shut up shop thanks to a lack of clientele.

The YHA backpackers hostel and apartments in Foster, which has been running for 15 years, will be closing indefinitely tomorrow as Davies and her husband are unable to cope with the rise in holiday renting in the area.

9369604-3x2-700x467

Speaking to Travel Weekly, Davies – who is no longer affiliated with YHA – said that while Airbnb has been great for the consumer, it has completely ruined her hostels’ popularity.

“There are now 10 or 15 more options in Forster, which is great for the consumer, there’s a lot of choice for them.”

“Although,” she adds, “it also means that our business has become marginalised.”

According to Davies, the Airbnb takeover has been recent.

“Slowly over the last two years and then we went to the YHA conference and realised it wasn’t just us its everyone.”

“In Phillip Island, there are 500 Airbnb beds, it’s really just turned into an economic decision for us,” Davies added.

Making a comment on the rise of Airbnb accommodation in Australia, YHA CEO Julian Ledger said the concern is namely three things.

“The impact of tourists staying in non-approved accommodation, affecting residents and so giving tourism a bad reputation.”

“Accommodation being used as tourist accommodation which is not compliant or fit for purpose.”

“Cheaper alternatives undermining the viability of approved operators.”

According to Ledger: “These problems have been particular to the CBDs, inner suburbs and beachside suburbs as well as certain locations in regional areas such as Byron Bay. ”

“From the 1980s, it was mainly the problem of illegal backpacker hostels operating out of former boarding houses and larger private residences.

“In more recent times, the problem has been exacerbated by the emergence of online letting platforms.”

“Whilst these do incorporate some checks and balances into their business model the sheer number of new holiday lets has increased the impact.

Back in November, Travel Weekly questioned whether Airbnb had reached its tipping point, as industry experts predicted the sharing site would fail to gain more users than it has already acquired.

In its third AlphaWise survey, Morgan Stanley found the popularity of the home sharing start up may be waning, with Airbnb use in consumers growing by only 3.3 per cent in 2017.

 

While the numbers are still promising for Airbnb, and counting in the fact that only around two-thirds of global consumers were surveyed, the industry speculates the service is plateauing.

However, even if the platform is indeed slowing down, the devastating effects it is having on small businesses such as Davies’ hostel will only continue.

SEE WHAT PEOPLE ARE SAYING

  • Raeleen Gale

    Just to let you know the hostel is in Foster, Victoria. Not Forster NSW

  • Hannah Edensor

    Thanks Raeleen!

  • http://kdforsman.com KDForsman

    we are seeing the impact here in NZ as well – it’s particularly bad in smaller rural regions like Buller :(

  • 1Lionel

    The article does not address the fundamental issue at hand: a lack of a level playing field. Airbnb hosts buy their homes usually with a mortgage that is directed at residential homes and therefore a lower rate. Many lenders in fact will not give a “primary” home rate if they were told the home was being used for commercial purposes. Further, their real estate taxes are significantly lower than for hotels or B&Bs. Thirdly, they do not have to comply with numerous regulations: people with disabilities; fire systems and security.

    As for Airbnb itself: It is a rogue company with a dodgy tax structure in Ireland whereby they do not pay even Irish taxes! Their Irish subsidiary collects most of the money from hosts and guests in jurisdictions around the world and send it on to an offshore haven as Irish laws allow that. The whole ruse is called a Double Irish with a Dutch Sandwich.

  • Duke

    Another point of view…. I own a hostel and have fully embraced Airbnb for 4 years. We are superhosts and host over 450 airbnb reservations a year with 88% 5 star reviews and then 98% 4-5 stars and only 2% 3 star reviews. We mostly only offer our rooms on airbnb midweek and off season when we won’t fill up without them.

    I feel that Airbnb has expanded our market from just those in the hostel “scene”(backpackers from the 1960’s -2010), to now creating a whole new scene where people are interested in shared spaces and experiences. Airbnb is a trendy thing now. “Just get an airbnb”.
    Hostels have been providing the Airbnb experience for over 50 years! We should dominate this new space.
    We get people that would have never thought to search out a hostel, but who are keen on airbnb and find our homestyle hostel listings there and book there.

    I don’t like the high fees and commission sites from Airbnb and OTAs. But, you have to be where the people are booking. OTAs monopolizing the internet is a whole other issue.

    Had this hostel used Airbnb to their advantage, they might have found a whole new market of customer’s looking for authentic experiences. The article makes Vacation Rentals and Airbnb into purely a villain. But I’m just wondering if there isn’t some fault with management for not changing with the times. Do they distribute their hostel beds through a channel manager to booking.com, airbnb, their own website, YHA website, and other hostel sites?

    The tradition lodging category (Hotels-hostels-motels-BnBs-etc) type have felt the downward price pressure of thousands of vacation homes popping up in our ski town as well. But by offering a great experience and getting great reviews and distributing inventory to where guests are looking to book, you CAN stay relevant and thrive. Its not easy and there is a technological learning curve, but it can work. Airbnb is just another tool to be used by any lodging owner.

Travel Agents

Big Fat Agent Wrap

by Vanessa Bussoletti

It doesn’t get more jam-packed than this, readers. Unless you count our jam sandwich because that’s overflowing all over our desk.

Share

CommentComments

Tourism

“We’re all getting robbed”: Vic tourism hit by scam

by Hannah Edensor

At least nine Victorian tourist attractions have been hit by a credit card scam. We too were busted for buying clothes under our boss’s name but only to avoid buyers shame in the office.

Share

CommentComments

Hotels

What can you actually take from hotel rooms?

We could tell you this was an exclusive insight into what you can get away with stealing from hotels, but we’d be lying. We nicked it off an online forum.

Share

CommentComments

Aviation

At last, Qantas inflight Wi-Fi takes off

by Hannah Edensor

As 56% of travellers get stoked about Qantas’ inflight Wi-Fi, our concern lies with the other 44% who clearly hate looking at cats on YouTube.

Share

CommentComments

Destinations

Travel warnings for Gallipoli after terror threats

by Hannah Edensor

New updates on Smart Traveller have upgraded warnings for Turkey with news Anzac Day commemorations could be a target of terror attacks.

Share

CommentComments

Travel Agents

Flavour of the Week

Find out who won new roles & who fell on their swords in this week’s Flavour of the Week. Yes, we added that sword bit for effect.

Share

CommentComments

Cruise

Cruising for young travellers is finally here

This first of its kind cruise brand had us at ‘Wine & Paint Classes’ because it combines two of our favourite things. Well, one, we hate painting.

Share

CommentComments

Technology

52% of travellers swayed by Facebook photos: study

All of our Facebook friends’ photos inspired us to travel. And by ‘friends’ we mean the public profiles we stalk because we only have 4 friends.

Share

CommentComments

Tourism

Is your boss the Executive of the Year?

We tried to nominate ourselves for this award, but apparently ignoring the boss and pretending to be your own boss doesn’t actually make you CEO.

Share

CommentComments

Travel Agents

Final week of LAX agent incentive kicks off

We’re re-running this again from Monday (minus the typos). You get déjà vu & we do less work. A win-win, we say.

Share

CommentComments

Destinations

A world of special Sunshine Coast Deals

by Vanessa Bussoletti

Visit Sunshine Coast has partnered with Escape Travel to launch a major new campaign offering a wide range of activities […]

Share

CommentComments

Hotels

Big Fat Hotel Wrap

by Vanessa Bussoletti

If you read one thing today make sure it’s Travel Weekly’s hotel wrap. Actually, your medication instructions and train timetable probably take priority.

Share

CommentComments