BNB SUB 160A Rec'd 10/04/2019 Economics and Industry Standing Committee Legislative Assembly of Western Australia Inquiry into Short-Stay Accommodation Airbnb Supplementary Submission Thank you for the opportunity to make a supplementary submission to the Inquiry into Short-Stay Accommodation following the public hearing on 20th February 2019. This supplementary submission provides further information which addresses issues the Committee has considered throughout the public hearing process. Economic Impact of Airbnb in Western Australia Airbnb’s submission outlined the economic impact of Airbnb in Western Australia, referring to a report by Deloitte Access Economics — Economic E!ects of Airbnb in Australia : Western Australia — which found that in 2015-2016 Airbnb guests who stayed in Western Australia spent $155.1 million, which supported 780 jobs, including 180 jobs in areas outside Perth, in brick-and-mortar businesses such as cafes, restaurants, and retailers, and contributed $99.7 million to Gross State Product.1 Airbnb understands that the Committee is interested in more recent data to inform their understanding of the economic contributions of home sharing to Western Australia. Unfortunately, the scope and detail of the report referred to above and in our original submission is not able to be replicated by Airbnb at this stage. To inform the Committee’s understanding however, this supplementary submission includes some further information on Airbnb’s economic activity utilising Airbnb’s internal data. The Committee should note that 1 Deloitte Access Economics 2017, Economic E!ects of Airbnb in Australia, pp.55-57. !1 the information included in the report by Deloitte Access Economics and the "gures below utilise two di#erent data sets - both temporally and geographically. The Deloitte Access Economics report utilises data from 2015/2016 and Western Australia, whilst the Airbnb guest survey information below utilises data from 2017 and Australia. As noted in Airbnb’s original submission, there are 12,500 active Airbnb listings in Western Australia and in the past twelve months to 1st January 2019, our Homes community welcomed over 594,000 guests across the state — both domestic and international travellers.2 Airbnb regularly surveys our community — both hosts and guests — including on areas related to economic activity. The most recent survey of guests (n = 1,088) in Australia was conducted in 2017, which found that a typical guest spent $168 per day with 54% of spending by guests occurring in the neighbourhood in which they stayed. Below in Table 1 is a breakdown of the guest survey data from 2016 and 2017. The 2016 data relates to guests who visited Western Australia (n = 123) whereas the 2017 data relates to guests who visited Australia (n = 1,088).3 2 Airbnb internal data. 3 Airbnb internal data. !2 Table 1. Category 2016 (Western 2017 (Australia) Australia) Food (restaurants, 32% 33% cafes, bars) Groceries 11% 14% Shopping 14% 16% Cultural activities 10% 10% (museums, historical sites, local festivals) Leisure activities 11% 10% (entertainment) Transportation 19% 15% Other services 3% 2% The broad results are largely similar between both data sets, with the highest spending category being spending on restaurants, cafes, and bars followed by transportation. Whilst it is di$cult to extrapolate and directly compare the economic impact "gures in the Deloitte Access Economics report without a full economic analysis, Airbnb notes that the number of guests staying in Western Australia has increased from 171,500 guests in 2015/20164 to 594,000 in 2018. It follows that as the number of guests has increased, the total economic impact — driven by both what hosts earn, and what guests spend when they visit — has also increased. Airbnb in context of the housing market Airbnb understands the Committee’s interest in understanding more about the short-term rental market and its relationship with the broader 4 Deloitte Access Economics 2017, Economic E!ects of Airbnb in Australia, pp.18. !3 property market, and speci"cally its impact on housing availability and a#ordability. Broadly, Airbnb is simply not a primary factor in most housing markets in Australia, including Perth and Western Australia. The Airbnb community represents less than one per cent of both the Perth and Western Australian housing markets. Holding less than one per cent of the available market responsible for housing a#ordability is simply not credible. Further, these arguments distract from much larger macro factors such as enabling planning systems to provide adequate social and a#ordable housing options to match population growth, demographic changes, and taxation — including, notably the proposed changes to negative gearing from 1 January 2020 by the current Federal Opposition — to name a few. A number of organisations have considered Airbnb’s impact on the housing market in Australia, and at the public hearing Airbnb made note of reports which may be of utility to the Committee’s considerations. The following research reports are attached to this supplementary submission. The Grattan Institute, Peer-to-peer pressure: Policy for the sharing economy The Grattan Institute considered the impact of short-term rentals on the housing market and found that “any rent increases caused by the rise of short-stay rentals are likely to be localised or small. Short-term use of housing is a small fraction of the city-wide housing stock.”5 Tenants’ Union of NSW, Belonging Anywhere: Airbnb and renting in Sydney The Tenants’ Union of NSW conducted an in-depth analysis on the relationship between Airbnb listing activity (utilising scraped data) and the rental market in Sydney. 5 The Grattan Institute 2016, Peer-to-peer pressure: Policy for the sharing economy, p. 26. !4 There were two main "ndings from this report: • “We found no link between particularly high numbers of Airbnb listings and rises in rent.”6 • “For all of Sydney there was no discernible e#ect on the vacancy rate.”7 The report concluded that “even if Australia is the most penetrated market there is actually not yet so much activity on Airbnb that would impact the private rental market.”8 SGS Economics and Planning, What Impact Does Airbnb have on the Sydney and Melbourne Housing Markets In 2018 Airbnb commissioned SGS Economics and Planning — a trusted, respected, and independent research and analytics "rm — to examine the impact of Airbnb on the housing markets in Australia's two largest cities — Melbourne and Sydney. Prior to the release of this report, no detailed analysis had been completed in Australia utilising Airbnb’s own data sets to better understand how Airbnb’s community is placed in the context of housing markets, speci"cally housing a#ordability. The report found that: “Broadly, in Sydney and Melbourne, it is not "nancially bene"cial to host a property on Airbnb instead of renting to a long term tenant”. The report concluded that: “The impact of Airbnb on the housing markets in Sydney and Melbourne appears to be minimal.”9 Airbnb notes that the Committee has also heard from the peak body for local government in Western Australia, the Western Australian Local Government Association regarding this issue, with WALGA noting they have no evidence “anecdotal or otherwise” on the relationship between short-stay accommodation and rental a#ordability. 6 Tenants’ Union of NSW 2017, Belonging Anywhere: Airbnb and renting in Sydney, p.14. 7 Tenants’ Union of NSW 2017, Belonging Anywhere: Airbnb and renting in Sydney, p.13. 8 Tenants’ Union of NSW 2017, Belonging Anywhere: Airbnb and renting in Sydney, p.16. 9 SGS Economics and Planning 2018, What Impact Does Airbnb have on the Sydney and Melbourne Housing Markets, p.5. !5 Finally, for many Airbnb hosts the income they earn from sharing their home is vital to their livelihood and economic wellbeing. As noted in our original submission, 1 in 2 hosts (49 per cent) in Western Australia report that hosting helps to a#ord staying in their home, whilst 1 in 3 (31 per cent) report that host earnings go towards paying the cost of housing (mortgage or rent payments). Vested Interests Airbnb would like to note the participation of the Australian Hotels Association (WA Branch) (AHA WA) at the recent Contrabnb, or Reformbnb, conference held in New York in 2018. This conference was organised by the Hotel Association of New York City, paid lobbyists, and other international hotel associations, the purpose of which was to discuss “Winning the Fight Against Short Term Lets". Shortly before attending this conference, the AHA WA released its regressive plan to ban holiday homes, ban holidays less than two weeks long, and only just stop short of a ban on almost all home sharing in Western Australia outright. At a time when tourism in Western Australia is in dire need of a progressive, visionary policy agenda to grow, not inhibit the number of visitors travelling in the state and spending money in local businesses, this short-sighted agenda from a vested interest such as the AHA WA demonstrably fails the test of what’s good for tourism and the visitor economy in Western Australia. Furthermore, when this agenda is combined with rhetoric that the thousands of ordinary Western Australians who share their homes to visitors from around the world are part of “diseasing an industry and destroys the jobs of quali"ed and trained employees”,10 the Committee can well question the intent of vested interests to genuine policy-making in the public interest. It is notable that the AHA WA has cited the wellbeing of its employees as the reason for its policy agenda on short-stay accommodation. This sits incongruently with the AHA WA's consistent advocation for reductions to award conditions and penalty rates. Attached to this supplementary 10 https://www.afr.com/news/politics/airbnb-slams-tourism-australia-director-bradley- woods-for-conflict-of-interest-20181204-h18paa.