OTTAWA — The Hotel Association of Canada (HAC) released a new study demonstrating that commercial short-term-rental operators are growing exponentially — far outpacing actual home-sharing activity. Only 17 per cent of Airbnb’s total revenue in Canada is generated by true home sharing where the owner is present during the guest’s stay.
The study, entitled An Overview of Airbnb and the Hotel Sector in Canada: A Focus on Hosts with Multiple Units, spotlighted 11 key markets across Canada and examined the short-term rental market in comparison to Canada’s hotel sector, with a key focus on Airbnb as the most widely used digital home-sharing platform in Canada.
The study also revealed that units are being rented in increasing frequency. In fact, one in three Airbnb units in Canada were rented for more than 90 days per year and this segment generated more than 70 per cent of total Airbnb revenues during a 12-month period.
“More than 80 per cent of Airbnb’s revenues nationwide — $462 million — come from whole-unit rentals where the owner is not present. Furthermore, 30 per cent of Airbnb’s revenues in Canada are being generated by multi-unit operators who rent out two or more entire-home units. These multi-unit, entire-home hosts were the fastest growing Airbnb segment in terms of the number of hosts, the number of units and revenues generated in the past two years,” says Susie Grynol, HAC president. “This demonstrates that almost one-third of Airbnb’s revenue is generated through actively managed businesses — ones that do not resemble the original concept of home-sharing.”
Additional key takeaways from the study include:
• Approximately seven in every 10 units listed on the Airbnb distribution platform are entire-home rentals, with guests having complete and sole access to the entire unit during their stay
• In Canada, revenues derived from multi-unit hosts have more than doubled from $71 million to $167 million — a 134-per-cent increase in revenue over the preceding 12-month period
• Canada’s hotel sector directly supports approximately 191,600 full-time equivalent jobs as compared to an estimated 1,000 full-time equivalent Airbnb jobs generated through cleaning fee charges
• In Canada, the average number of active Airbnb units has almost doubled in the past two years, rising from 10 per cent of total accommodation supply in 2015 to 18 per cent in 2016.
“A commercial operator is an unofficial term we are using to describe the phenomenon that is occurring in which two or more entire-home units are being rented out on a consistent basis,” adds Grynol. “Effectively, these operators are running illegal hotels within residential housing. This unregulated commercial activity has given rise to unintended consequences, including the loss of affordable housing, increased disruption in communities and a potential risk to guests, as there may not be any health and safety standards in place.”
The association is calling on the federal government to amend the Excise Tax Act to create a more level playing field for hotels in relation to the short-term rental industry. It believes Airbnb and similar online platforms should be required to charge and remit HST on the service fee charged to hosts and guests. HAC also recommends a focused review of the overall rules for all players involved in the temporary accommodation sector, with a view to achieve fairness.
“The traditional lodging industry welcomes competition and is prepared to compete on quality, experience and price; but the rules of the game have to be applied evenly to all players,” says Grynol. “To be clear, we are not opposed to an individual using a home-sharing platform to rent out a room in his or her home to help make ends meet. What we are against is the continued allowance of commercial operators to act like hotels without the same responsibilities to taxation and fees; health and safety standards; business licenses; insurance; and accessibility. This is about fairness — these laws and regulations should be upheld by anyone running a commercial operation.”