Startup News, Tourism

Airbnb contributes $1.6 billion to Australia’s economy and local SMEs are big winners: Report

Dominic Powell /

Disruptive businesses like Airbnb are a boon for the Australian economy and can provide local businesses with more sales opportunities, according to research released this week by Deloitte.

According to the analysis from Deloitte, global accomodation startup Airbnb contributed $1.6 billion to Australia’s gross domestic product (GDP) between 2015-2016 and has “supported” over 14,000 jobs.

Notably, the report also revealed Airbnb guests spend $237 per night on average, nearly $100 more than the $146 average spent per night by tourists not using Airbnb.

Deloitte Access Economics director Aaron Hill told SmartCompany this increased spend extends beyond accommodation, and local businesses are seeing the benefits too.

“The most significant part of the report we found was the flow-on benefits for other parts of the economy where tourists were spending up,” Hill says.

“Airbnb guests spent $2 billion across Australia last year, and that was on accommodation, along with local businesses in the area and activities.”

The report reveals 74% of Airbnb properties in major markets across the world are located outside main tourism districts, which directly benefits local businesses. A number of hosts surveyed through the report stated they regularly recommended local businesses to their guests.

“Both visitors and their spending are dispersed rather than concentrated, helping local businesses outside areas which traditionally benefit from tourism,” the report says.

Deloitte was asked by Airbnb to undertake the research, the outcomes of which tell a different story to what acting chief executive of Tourism Accommodation Australia Carol Giuseppi told SmartCompany in July 2015.

Giuseppi said Airbnb was negatively affecting smaller operators, specifically local hotel and motel owners, and some Airbnb hosts were taking advantage of the platform whilst failing to comply with appropriate safety and tax requirements.

“We don’t mind if people are renting out their rooms short-term but we are concerned about non-residential, commercial landlords who are making a business out of this,” Giuseppi said.

“It has a significant impact on the economy.”

Experiences the next game-changer for hospitality

Hill says tourists staying in Airbnb properties also put a premium on the “non-price” elements of the stay, including experiences with the accommodation’s hosts.

“We found the hosts really enjoyed showing their visitors local bars and other places to go in the area, building on that peer-to-peer experience,” he says.

The report shows 27% of a typical Airbnb guest’s expenditure went towards food service such as local restaurants, and a combined 29% went towards leisure activities and shopping.

With the platform’s launch of experience-focused offering Airbnb Trips in Australia this week, the company will be putting an increased focusing on sharing experiences.

Launched today in Sydney, AAP reports the service will let hosts offer experiences such as tours or sporting activities to those staying in their Airbnb rooms, or even just as a standalone offer.

‘Hosts can offer the experience as their schedule allows. For people who don’t have the space to rent their house but still have the passion and want to share with travellers, they can offer it as well,” Airbnb’s VP of product Joseph Zadeh told AAP.

Airbnb hosts provided accommodation for 2.1 million guests over 3.7 million nights between 2015-2016, and Hill believes the platform is set to keep on growing.

“It’s been growing quite quickly, so you’d expect if consumer demand keeps increasing the business will keep expanding,” he says.

“Ultimately the tourism sector is very competitive, so you’re only as good as your latest innovation.”

Despite Airbnb’s significant impact on the hotel and hospitality industry, Hill believes there’s already a “competitive response” from the sector.

“We’ve seen a significant response from Australian hotel sector, responding to same consumer pressure that Airbnb has responded to,” he says.

“They’re starting to put more of a focus on experiences, and that’s a great thing.”

*This article was updated to include comments from acting chief executive of Tourism Accommodation Australia Carol Giuseppi.

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany. Email him at [email protected].

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