Millennials continue to fuel the popularity of residence-sharing services in major centres across the country, making it increasingly apparent that sites like Airbnb are likely here to stay.
According to Airdna’s Scott Shatford, Airbnb is experiencing rapid market expansion around the world, with a 50 per cent increase in Europe and even greater growth in Asia. The home-sharing site’s growth rate is comparatively low in Canada, at three per cent, however Shatford notes “every summer we see a spike.”
At May’s Canadian Hotel Investment Conference (CHIC), Shatford and Chris Gibbs, assistant professor at Ryerson University, highlighted the growing influence of the site. Gibbs drew attention to the disparity in ADRs of hotels and Airbnb. According to a recent Ryerson University study, in 2015, the average daily rate for hotels was $193.68 while the Airbnb ADR was $124.05.
This disparity, as well as the lack of regulation and appropriate taxation on Airbnb-style accommodations, have become a source of growing concern within the industry. Groups such as the Greater Montreal Hotel Association have taken action to help level the playing field, supporting a provincial bill to regulate home-sharing in Quebec, which was tabled last fall.
The resulting legislation came into effect in April, making the province the first to establish home-sharing regulations. The new law requires those who regularly rent their homes through Airbnb to be subject to the same rules and taxes as B&Bs and hotels.
The municipality of Tofino, B.C. also cracked down on homeowners listing properties for rent on Airbnb’s website. Last spring, the resort town voted to actively enforce a long-standing law requiring short-term rentals to apply for rental licenses. However, it won’t begin enforcing fines for unlicensed properties until 2017.
As the prevalence of home-sharing continues to grow, governments in various regions are turning their attention to regulating these businesses. Though these steps will help level the playing field in the travel accommodations market, it also further solidifies the place of home-sharing within it.
As Chip Conley, global head of Strategy and Hospitality at Airbnb puts it: “To be regulated is to be accepted.”
