Adelaide short-term rental rate rise puts events capital status at risk

Michael Crosby Head of Public Policy, Airbnb Australia and New Zealand 

City of Adelaide is proposing to increase the rates on many of the City’s short-term rental properties by 20 per cent in what could be a major blow for its growing status as an events capital. 

As South Australians face sharply rising costs of living and economic uncertainty, rate rises are the last thing people need, especially when they have the potential to put significant strain on already struggling households.

South Australia bills itself as the major events capital of the nation yet these proposed changes fly in the face of that. Short-term rental accommodation is extremely important for Adelaide. With globally significant events on the calendar each year such as LIV Golf, Tour Down Under, Fringe, WOMAD and Vailo 500, the sector is vital to help welcome visitors to the state. 

Short-term rental accommodation provides surge capacity for major events such as LIV Golf, which attracted more than 94,000 fans across the three-day event and the Tour Down Under, with an estimated 780,000 people taking in the 10 day event across the state. 

There is a reason why for so many travellers, short-term rental accommodation is their first choice. It plays a key role in offering flexible options for guests who might require a kitchen or a laundry, or for families who might need more than one bedroom. 

Short-term rentals are used for more than just tourism. Many people rely on it for project work in locations away from home. Others require it when they travel to be near loved ones undergoing medical treatment in hospital. 

Unlike hotels there are a range of Airbnb hosts. Some offer private, spare rooms in their own home while they remain at home. Some hosts list their own home to earn income while they go away on holiday and their house sits empty. This makes sense in the current economic climate to offset the cost of a holiday. A survey of Airbnb hosts revealed that 35 per cent of them rely on the income made from Airbnb to cover the rising costs of living¹. 

Council rate rises for the short-term rental accommodation sector need to be carefully structured not to create unintended consequences. Part-time hosts, or those who rent out unused space in their own home, should not be on the hook for increased rate rises. 

The proposal from City of Adelaide means rates would be calculated on whether a property is advertised, not whether it was booked. Even if an Airbnb host doesn’t receive a booking or any income for three months, they would still be slugged these commercial rates.

Airbnb supports fair rules and regulations for our sector, including a mandatory statewide registration scheme for all short-term rental accommodation. It has been said that there needs to be a “level playing field” with other forms of accommodation, but the rules which have been set up for other types of accommodation were designed in the 20th century.

The short-term rental sector is relied on by so many Australian and overseas travellers, and it needs bespoke rules which reflect the way hosts and guests connect with one another through digital devices.

Airbnb is committed to working with state and local governments to get the balance right. There’s a lot at stake with guests who stay at Airbnb properties spending over $700 million across the state, which helps 5,400 South Australian jobs².