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The Impact of Airbnb in New Zealand

Like many new technologies, Airbnb has been controversial wherever it sets up and New Zealand is no exception. Despite similar Kiwi-made products, especially in the bach rental sector, Airbnb’s entry into the market has not been welcomed by many in the tourism industry. There are calls for tighter regulations, but smart businesses will look for the opportunities Airbnb might bring.

Regulations & Airbnb

The tourism industry feels that Airbnb and its hosts have an unfair advantage in the market. Traditional tourist accommodation such as hotels have higher costs, including compliance costs, higher tax rates and increased insurance.

There are also questions on the pressure that Airbnb puts on long-term housing, with many landlords finding they can make more renting to holiday makers, which leaves locals with nowhere to go. Queenstown is a good example of this; seasonal workers have not been able to find accommodation as their normal beds have been converted to Airbnb rentals.

This is why councils are looking to introduce regulations to cover the holiday rental market. Ideas floated have included limiting the number of nights Airbnb properties can be rented out and increasing taxes for hosts.

Even if these measures are passed, it’s unlikely that Airbnb will disappear from New Zealand, so business owners should be looking at ways to maximise the opportunities they bring.

Building Industry

Airbnb’s entry into the New Zealand market has highlighted shortages in both short and long-term accommodation. Airbnb’s supporters claim that land prices and building regulations are a much bigger factor in housing shortages, but even if holiday rentals are scapegoats, it’s clear that there are not enough homes in many areas and this brings opportunities for the housing market.

The same is true of traditional tourist accommodations. Government research suggests that there will be a shortage of 4,500 rooms by 2025. This makes Airbnb crucial to tourism at the moment, as they can make up the shortfall of rooms, especially during peak times.

It does show that there are opportunities for those wanting to enter the tourist accommodation market. Although new hotels have a large lead time, the shortage of beds shows the potential in the market.

Tourism Industry

Anecdotal evidence shows that tourists using Airbnb are after a different experience to those staying in hotels. Airbnb accommodation often caters to larger groups, offers kitchens or allows a visitor to stay with the host, experiencing life as a local. Airbnb also brings tourism to non-tourist areas, as there is now accommodation in these areas.

The tourism industry can look to cater for the types of tourists that are looking for a different experience. Those in non-tourist areas may find that they can expand existing businesses to accommodate the occasional tourist.

Airbnb already offers ways to connect through the offer of Experiences. New Zealand Experiences offered include vineyard tours and learning Maori customs. Although only offered in Queenstown at the moment, Experiences are sure to expand. Business owners have the opportunity to advertise to a worldwide audience and showcase their products to interested tourists.

New Markets Using Airbnb

The average house or room on Airbnb is only rented for 60 nights per year. But for the truly motivated, the so-called Superhosts, Airbnb can be a business all by itself. One Superhost brings in $2.9million each year by advertising multiple properties. Existing landlords may find a more profitable market in holiday rentals.

For the imaginative, Airbnb can open completely new industries. The most obvious is property management companies for hosts who are not always available to manage their listing or meet guests. But there are also opportunities for cleaners specialising in holiday rentals, shoppers who deliver easy-to-cook food for guests and photographers who take photos for Airbnb listings.

Change always brings opportunities for those willing to look. Although the immediate reaction is to see a new major player in the market as a bad thing, businesses willing to evolve and use new technologies will find Airbnb bringing plenty of opportunities into New Zealand.