The short-term residential accommodation industry is booming in New Zealand’s tourism capital, with the lure of extra income prompting more and more Queenstown homeowners to list their properties on short-stay booking websites like Airbnb and Bookabach.
Guy Williams asks if the industry is a threat to the hotel sector, and looks at rules proposed by the Queenstown Lakes District Council for bringing rogue operators in from the cold.
The rise and rise of peer-to-peer, short-stay accommodation websites is the latest step in the evolution of the accommodation industry.
Worldwide, travellers who prefer a homely base for their holiday rather than the impersonal surroundings of a hotel, motel or backpacker hostel are choosing to book their accommodation through websites such as Airbnb, which connects hosts with renters.
In June the company opened its first New Zealand office in Auckland to manage growth.
Only seven years old, the company has 1.2 million listings worldwide and more than 7000 in New Zealand.
More than 300 of those listings are in Queenstown, where prices typically range between $50 and $1500 a night but average about $340.
Airbnb is but one of more than 90 websites Queenstown’s council is monitoring as it considers the rules governing the industry.
Connecting holidaymakers either directly with homeowners or with property management companies, the websites offer everything from a couch to some of the resort’s most opulent hideaways.
The level of service attached can vary from an owner leaving a key under the mat, through to guests sharing meals with the host family, to guests’ every whim being met through luxury property management services.
It would be logical to think the industry’s phenomenal growth would be scaring the resort’s hoteliers, but not so, the Tourism Industry Association’s hotel sector regional chairwoman, Penny Clark, says.
Clark says the peer-to-peer sector did not pose a major threat to her industry because they were catering for a different group of people.
Hotels provided certainty, security and 24-7 wraparound services, while residential short-stay providers catered for independently-minded travellers who didn’t mind spending extra time and effort on planning their holidays.
The peer-to-peer sector was so well established abroad that travellers now expected to see it among Queenstown’s accommodation offerings, she says.
“The reality is that it’s here to stay, and we all have to live together.”
What did seriously concern the hotel sector was the reduction in the number of houses available in the resort for long-term rent, which made it harder for its workforce to find affordable places to live.
“There’s less houses out there because people on Airbnb see it as a better way of making a dollar on their investment house.”
As the peer-to-peer sector has grown worldwide, many property owners have operated under the radar – failing to register with local authorities, not declaring income to their tax authority and avoiding their increased liability to property tax.
In the Queenstown Lakes district, property owners must register with the council if they want to take paying guests for up to 90 nights a year. If they want to exceed that number, they must get a resource consent.
But most are failing to register, either because they are ignorant of the rules or because they know it would mean paying more rates as their property’s status changes from residential to mixed use.
Council regulatory manager Lee Webster says that, at last count, 741 properties in Queenstown and Wanaka were registered as short-term visitor accommodation providers.
After working through only a quarter of the 90-odd websites listing short-stay accommodation in the district, the council was aware of another 1000 unregistered properties.
Instead of enforcing its present rules, the council is planning a stick-and-carrot approach.
Through its district plan review, it proposes more permissive rules to encourage more property owners to come under its regulatory umbrella.
Webster says it is monitoring websites with the intention of contacting unregistered owners and those needing a resource consent, and telling them to register or apply for consent.
It has drawn up rules in its proposed district plan – submissions for which close on October 23.
“We are trying to find a balance between enabling an activity that offers benefits to landowners and the district’s tourism offering but at the same time recognising that it has the potential to generate adverse effects on residential amenity.”
The increasing use of homes for visitor accommodation could be contributing to the resort’s rental shortage “but we can’t quantify that”.
In low and medium-density residential areas, registered owners would be permitted to let their properties for up to 28 nights a year.
To operate for between 28 and 180 nights a year, property owners would need to submit a management plan showing they could satisfy standards around issues such as number of guests, operating hours, noise, parking and access.
Above 180 nights a year, they would have to undergo the more onerous process of applying for consent as a non-complying activity.
In high-density residential areas, registered owners could let their properties for up to 90 nights a year.
To go above that number they would have to submit a management plan and gain a consent as a complying activity.
Webster says the rules would be accompanied by a review of enforcement, which could range from a simple requirement to register, to imposing a $300 fine or ordering property owners to cease operating.