Hotels feel the heat from Airbnb

An angry young businesman is on the phone and screaming

While a new luxury hotel is good news for Sydney, Tourism Accommodation Australia is demanding the government crack down on dodgy short term stays.

The announcement that Singapore’s Pontiac Land Group has won the right to develop the two heritage sandstone buildings in Sydney’s Bridge Street is a good sign for Sydney.

The group will turn two of the iconic buildings into a $300 million, 240-room luxury hotel, and it’s music to TAA’s ears.

“This is great news for Sydney tourism and is part of a wave of new hotels and serviced apartments that are scheduled to be added in the city over the next five years,” TAA’s CEO Carol Giuseppi said.

“The new hotels will play a crucial role in supporting the launch next year of the new International Convention Centre and will help elevate Sydney into one of the world’s greatest business and tourism destinations.”

But the hotel representative body is calling on the NSW Government to crack down on the flood of unregulated short-term accommodation that is unfairly competing with Sydney’s hotels. And by that, they mean the likes of Airbnb, the leading disruptor of the travel industry.

“The cost of developing hotels in Sydney is extremely high and needs to be based on a sustainable demand-led model if we are to continue to attract future investment,” Giuseppi added.

“The new investment in our city is threatened by the spiralling increase in unregulated short-term accommodation – some within a few hundred metres of the sandstone buildings – which are operating contrary to strata, council and other rules.”

“Investors in Sydney need to be confident that their hotel properties will be able to operate on a level playing field. It is estimated that there are over 10,000 rooms and apartments being made available for short-term rental across Sydney, many of which are operated as commercial businesses without the requisite permits. This is not good for future investors.”

“These unregulated short-term commercial accommodation providers do not generally employ people, they don’t pay the appropriate council charges, there is a question about taxation, they often do not meet safety requirements and they contribute nothing to tourism promotion.

“In other words, they are not a sharing economy, they are a taking economy.”

“With this exciting new project announced and other hotel developments in the pipeline we believe it is crucial that there is a review of rules and regulations to ensure future investment in the city’s tourism infrastructure is not jeopardised.”

The Pontiac Land Group has committed up to $300 million to convert the 19th century landmark buildings into one of Australia’s premier 5-star hotels when the re-development is completed by 2021.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

Latest comments

sting says:
September 18, 2015 at 12:53 pm
…. it is not about taking the business.. it is about playing the game fair… why can’t people see that.. accommodation providers are still getting slapped with 10% bed tax on top of the overall revenue.. of course hotels will be more expensive..
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Aubrey Adams says:
September 17, 2015 at 12:53 am
Sounds just like the taxi industry going of at Uber! Instead of whinging make your product value for money and something that meets a market need. That’s the capitalist free market approach isn’t it?
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Neil Devonport says:
September 16, 2015 at 6:38 pm
What a ridiculous position Carol takes, perhaps in-between the horses and carriages arriving and lighting the gas lamps she should look out her office window and realise its 2015! The accommodation industry must evolve, Airbnb is simply another mechanism to sell and welcome tourists through.
Next week alone more than 25,000 Aussies will use the platform somewhere in the world to book their accommodation. 52 percent of Australian Airbnb hosts live in low to moderate income households. The average Airbnb host in Australia earns roughly A$7,100 per year through AIRBNB.
48 percent of the income hosts earn through hosting on Airbnb is used to pay for regular household expenses like rent and groceries. 53 percent of hosts report that income earned from hosting has helped them stay in their home.
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John Grier says:
September 16, 2015 at 6:21 pm
if someone wants to rent their premises it’s none of the govt.business. BUTT OUT !!!!
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@australia airbnb carol Giuseppi NSW Government pontiac land group Sandstones singapore sydney taa tourism accommodation australia