How Airbnb has changed the rental market

It has been a decade since the online marketplace turned ordinary Australian homes into potential tourist accommodation.

How has it changed how we travel, the communities we travel to and how investors view short term rentals?

Four years ago Julie Lawson set up a business in Port Douglas, north Queensland, offering property owners who wanted to rent their house out on Airbnb a guest “meet-and-greet” service. She started with four properties and expected it to stay small-scale – a semi-retirement plan.

But after discovering a strong demand for her services, Bees Knees Holiday Rental and Property Services quickly expanded. Even throughout the closed-borders period of the pandemic, the number of places Lawson managed doubled. Partly because a “lot of properties were bought by southerners, which we’ve taken on for them”, she says.

Today Bees Knees manages nearly 40 Airbnb properties in the Port Douglas area, and Lawson offers everything an absent Airbnb landlord can’t – from property maintenance to passing on travel tips to guests. She employs an assistant and contracts out work to local cleaners, a linen hire company, an electrician, an air-conditioning servicer, a plumber, and two maintenance workers. She places regular orders for tea, coffee and other household products. “We try and keep everything local,” she says.

But now she’s struggling to find staff who can afford to live close enough to help look after the properties.

Airbnb arrived in Australia in 2012, and, since then, millions of international and domestic travellers have booked stays through the platform. It has brought with it a series of profound shifts; from a new willingness to do business with strangers over the internet and sleep in someone else’s bed, to giving anyone the ability to live like a local in someone else’s town. But it has also raised questions about the benefits of booming short-term accommodation, when locals have nowhere to live.

The rise of “micro entrepreneurs”, like Lawson, is one outcome of this decade’s meteoric rise of digital platforms including Uber, Airtasker and Airbnb – known as the sharing economy – according to Dr Thomas Sigler, an economic and urban geographer from the University of Queensland. “I think a lot of people vilify Airbnb and similar companies and think of them as exploitative … but there’s also the idea that it does empower people,” he says.

Airbnb has sold us a product we didn’t know we were looking for.

Hundreds of thousands of Australian property owners have earned money on the platform. Research by Sigler and his colleagues at UQ shows that between 2016 and 2019, nearly 350,000 properties were listed at least once, with an average growth in listings of 2.43% a month. But the closed borders of the pandemic, Sigler says, slashed listings.

Last year Prof Sara Dolnicar, a UQ tourism researcher, forecast that “coronavirus had disrupted the disrupter” – that property investors would put their properties on the long-term market “and never return to Airbnb”.

Now, she says: “I was wrong. Where money can be made, everybody is flocking back into the short-term market.”

Airbnb has fundamentally changed how and where we travel. We make the bookings ourselves, rely on guest reviews instead of hotel star ratings, and collect keys not for a single room with a mini bar, but an entire house with bedrooms, a kitchen, even a lightly stocked pantry.

If you would like to understand more about short term-rentals, contact The Property Associates team today.