How Short Term Property Rentals Can Increase Tourism

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Tourist Arrivals in Australia increased to 1,057,900 in December from 802,200 in November of 2018. Tourist Arrivals in Australia averaged 325,024.61 from 1976 until 2018, reaching an all-time high of 1,057,900 in December of 2018 and a record low of 30,100 in June of 1976.

Australia saw strong growth in international visitation during the year ending September 2018. Visitor arrivals of those aged 15 years and over increased by 6% to reach 8.4 million, while spend increased 5% during the year to reach a record $43.2 billion. While arrivals and spend both saw strong growth, visitors are not staying as long in Australia. Nights only increased by 1%, while average duration of trip to Australia fell 4% from 34 nights to 32 nights during the year.

There were strong results in terms of visitor arrivals across the top 5 markets, however, results were mixed for spend and nights. China continues to lead the growth among the bigger markets, with visitor numbers up 8% to 1.3 million, spend up 12% to $11.5 billion, and nights increasing by 8% to reach 57.6 million.

China now accounts for 27% of total spend by international visitors on trips to Australia. Visitor numbers increased from New Zealand, the US and the UK, up 3% to 1.3 million, 736,000 and 699,000, respectively. There was stronger growth in the number of visitor arrivals from Japan, up 6% to reach 419,000.

However, with the exception of China, there was a decline in the number of nights spent in Australia for the top 5 markets. Nights from the US fell 13%, New Zealand and the UK fell 7%, and Japan fell 2%. With spend closely linked to duration of stay, this also saw a decline from the US, which was down 3% to $3.6 billion. New Zealand and the UK were also both down by 2% to $2.6 billion and $3.5 billion, respectively, while Japan saw an increase in spend of 4% to $1.8 billion.

Tourism is an important part of the Australian economy, with both levels of government setting objectives to achieve industry potential. Airbnb and other short-term rental platforms like HomeAway,, and can help governments achieve these objectives through the expansion of room supply and greater average tourism expenditure.

Tourism 2020 is the key Federal Government objective relevant to Airbnb. Tourism 2020, initially launched in 2010, set stretch targets for Australia’s tourism industry. Short-term private rental services like Airbnb can assist the government in meeting these targets. Importantly, short-term rental properties are distributed across capital cities and regional areas, and between the CBD and metropolitan areas. This may assist in achieving another key area of strategic focus in Tourism 2020: improving regional dispersal. Of the 74,400 listings booked in 2015-16 in Australia, 25,900 were outside the greater capital city areas of Australian states. This is particularly important, given regional areas have experienced a decline in accommodation supply in recent years.

The key aspiration under the strategy is to develop better experiences for visitors travelling for leisure, business, education and health services, and visiting friends and relatives. Short-term rental platforms can assist in achieving this broad aspiration through the unique. Consumers enjoy a range of benefits associated with the , short-term rental platform, many of which contribute to the overall visitor experience. For example, guests can enjoy restaurants, cafes and attractions recommended by their host, generating a living experience more similar to a local resident than a conventional tourist. The range of accommodation, price of accommodation and duration of stay available on these , short-term rental platforms may also suit a wider variety of visitor types compared to traditional tourist accommodation.

While visitor accommodation is not noted as a specific action within this priority, the provision of , short-term rental accommodation in regional and rural Victoria may nevertheless assist in attracting more visitors to Victoria’s regions. Not only do these short-term rental increase accommodation supply in situations where supply may otherwise be limited, such as during key events and peak periods, but it also serves as an important marketing tool in and of itself. Visitors browsing the platform may discover regional locations to add to their itineraries.

As above, visitor accommodation is not a focus under this priority; however, short-term rental platforms can assist in ensuring sufficient accommodation is available during peak periods. The broad goal of the visitor economy strategy is to increase visitor expenditure across the state. Airbnb survey data shows that, on average, Melbourne Airbnb guests spend 41 per cent more than an average tourist in Melbourne, with Airbnb guests spending $248 per night and average tourists spending $176 per night.23 While not directly linked to any of the actions listed above, , short-term rental platforms may nevertheless assist in increasing visitor expenditure across the state.