22 Jul 2015

Moteliers fear Airbnb squeezing them out of the market

11:00 am on 22 July 2015

New Zealand motel owners are accusing the global home rental website Airbnb of taking away their business and not playing by the rules.

Logo of online home rental website Airbnb displayed on a computer screen in the Airbnb offices in Paris.

Photo: AFP

The Motel Association says people using the site to rent out their properties don't have to comply with the regulations motel owners do, and believes many are not paying tax on the income.

Airbnb has 1.2 million listings around the world and its first New Zealand rental went up on the site in 2008.

It has grown fast, with over 6000 listings in this country, double the number of a year ago.

People wanting to rent out a room or their whole house set up a profile on the site, upload pictures of the rooms and have to provide details about the accommodation and the local area. Guests and hosts are given written testimonials when they stay or host.

Noel Noble owns and runs the Aston Court Motel in Blenheim and said since 2008 the average turnover for motels in the town has dropped 25 percent.

"We've had to sharpen our pencil and sharpen our presence on the internet. The competition is fierce, we're not getting as much for our rooms as what we should do - it is just a very tight environment."

Accommodation on the website does not have to meet the same strict hygiene and safety standards his rooms do, Mr Noble said.

In Auckland, Laura Tulloch rents out a room in her Grey Lynn home about 28 days of every month.

She pays tax on the money it makes, and said Airbnb hosts had an incentive to keep up standards.

"We do have to keep a very clean and safe household in order for our ratings to stay high enough for us to get repeat bookings, so we are motivated to have a home with a fire extinguisher and safety features."

Ms Tulloch also runs a Facebook page which gives advice to New Zealand hosts, and said with all the information a person puts on their listings, they would be mad not to think that the tax man would come knocking if they didn't pay their fair share.

Motel Association Chief Executive Michael Baines

Motel Association Chief Executive Michael Baines. Photo: Supplied

But Motel Association Chief Executive Michael Baines said Inland Revenue needed to take a closer look at what he called a growing accommodation black market.

"Everybody that's offering those properties for sale is on the web, it's a matter of going through those sites, identifying who owns those properties there and seeing what income is being declared.

"I think there's a process that can be put in place, and I think in the age of information that can be automated as well."

Inland Revenue investigations and advice manager Linley Sutherland said hosts should be paying tax because they are effectively a landlord.

"We do have quite increasingly sophisticated tools that can detect no compliance and fraud, and we use that in our every day business.

"[We are] not looking specifically in this area at the moment, but would do so if anything showed up that we thought people weren't complying in the area."

No one from Airbnb Australia was available to comment but in a statement it said it encouraged hosts to familiarise themselves with locally set regulations and was working with policymakers around the world on clear, progressive and fair laws for home sharing.