Regional tourism booms as Airbnb growth threatens motel industry

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The report cites “intense competition” from other forms of accommodation, including sharing networks such as Airbnb, which have “exerted further downward price pressure on motel operators”.

Murray Cox, an Australian data activist, runs a website called Inside Airbnb which scrapes the company’s data and provides a snapshot of the available listings.

His analysis shows the number of Airbnb listings in regional NSW jumped by 26 per cent in the past year alone, outpacing growth in listings in Sydney (16 per cent) during 2018-19.

Michelle McCarthy, who runs The Grand Hotel in Kiama on the NSW south coast, is witnessing the disruptive effect of Airbnb on her industry.

“The trend at the moment in Kiama is a lot of old motels are going and they’re putting up apartments,” she said. “What portion of those will end up on Airbnb I can’t say, but I reckon it will be a few.”

Mr Cox’s data shows Airbnb listings in Kiama grew by 31 per cent in the 12 months to June this year.

“On Airbnb they can stay in someone’s house that may have a pool and stay on the ocean and for less than a motel with a smaller room. It definitely eats into the tourism dollar,” Mrs McCarthy said.

Half an hour up the road in Wollongong, Cathryn Dorahy and her husband rent out a self-contained one-bedroom apartment attached to their house.

While the extra income is attractive, Ms Dorahy said her main reason for hosting guests on Airbnb is to meet people and show them the local sights.

“We’ve welcomed people from all parts of the world, from just a couple of nights to three months. We’ve just had the loveliest people stay with us,” she said.

Inclusive of Airbnb’s service fee and a cleaning fee, her one-bedroom apartment costs $267 for a two-night weekend stay.

Cathryn Dorahy enjoys hosting guests at her Airbnb property because she gets to meet lots of different people.

Cathryn Dorahy enjoys hosting guests at her Airbnb property because she gets to meet lots of different people.Credit:Robert Peet

“I think the people we get as guests aren’t necessarily the sort of people who’d stay in motel accommodation. I really think we offer something that’s different. I don’t necessarily feel we are impacting on the local providers.”

Nathan Cloutman, a senior analyst at IBISWorld, said the outlook is poor for the motel industry as Airbnb increasingly tries to crack the regional market.

“Motels have generally declined over the past decade and we’re likely to see this trend continue,” Mr Cloutman said.


“Airbnb offers more flexibility and privacy. International travellers know the platform, they’re familiar with the platform. Particularly if they don’t speak the language, it’s very easy to use, whereas in a motel there’s a lot more interaction.”

As the pressure grows on traditional motels and hotels to adapt or perish, Airbnb is careful to avoid being painted as negatively affecting the industry.

A spokeswoman for Airbnb said the company “is growing the tourism pie by making travel more accessible and affordable for more people and spreads the benefits of tourism to the people and places that traditionally missed out.

“Tourism is not a zero-sum game. For the Airbnb community to grow, no providers have to shrink. The fact of the matter is hotels and motels in regional NSW are healthy and their future is as bright as ever. What’s more, many local and boutique traditional hospitality providers, like country motels, are increasingly deciding to join our community.”

Mrs McCarthy is confident there will still be a market for her hotel.

“The solo traveller, I think they’re quite happy to stay in a hotel or motel for the sociability of it. They come down for dinner and have a drink in the bar and a chat.

“Some people like the thought of Airbnb,” she said. “I know personally I don’t – I’d prefer to be anonymous.”

Josh Dye is a news reporter with The Sydney Morning Herald.

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