Hotels in firing line as Airbnb hits out at state tax

Incentives and taxes are being deployed amid the shifting ground for short-term accommodation providers across Australia.

Incentives and taxes are being deployed amid the shifting ground for short-term accommodation providers across Australia. Photo: TND/Getty

The Victorian government has shot down a push to expand a contentious short-stays levy to all accommodation bookings, including city hotels.

Former premier Daniel Andrews last month unveiled an Australian-first, statewide levy on short-stay platforms like Airbnb and Stayz.

The consumer-facing 7.5 per cent levy is slated to come into effect from 2025 and raise $70 million a year to build and maintain social housing amid weak supply and soaring rents.

Airbnb Australia and New Zealand public policy head Michael Crosby said the San Francisco-based giant was disappointed the levy strictly targeted short-stay platforms.

“We support the concept of using this revenue for use in new housing projects,” he said at a breakfast event in Melbourne on Wednesday.

“But we have said the levy would raise a lot more and cost consumers less if it was completely accommodation agnostic and it applied to any form of accommodation.”

The levy was a headline policy from the state government’s long-awaited housing statement, which set a target to build 800,000 homes in Victoria over the next decade.

Airbnb is not against the user-pay levy but was pushing for a rate of three per cent to five per cent.

It also wants the government to explore a threshold or a tiered structure so people booking cheap rooms don’t face the same rate as those staying at more pricey homes.

“We think that 7.5 per cent levy will have a bit more of a disproportionate impact on budget accommodation,” Mr Crosby said.

“The average price of a room on Airbnb is about $104 a night. We want that budget option to be there for budget-conscious travellers, or people who need affordable accommodation options.”

Mr Crosby suggested plans were afoot to create a working group on how the levy would be implemented and Airbnb still had unanswered questions.

“It’s difficult to see how the levy will actually result in an increase in the properties available to long-term rentals across the state,” he said.

State Tourism Minister Steve Dimopoulos disputed the suggestion the levy would have little affect on the rental market and flagged the government would not reconsider the exemption for hotels.

“The most important issue facing Victorians right now is the housing crisis,” he told reporters.

“Airbnb provides a valuable service to many communities across Victoria (and) regional towns but it also does take away housing stock.

“The purpose of that levy on Airbnb was to shift a little bit of the market back to what people need, which is a home to live in.”

The NSW government has asked its treasury to look at Victoria’s proposed levy, potentially paving the way to follow its lead.

Mr Crosby said the platform was in discussions with other state governments and were monitoring the Victorian levy closely.

“We want to make sure … if there is that negative impact as a result of the levy, that state governments are aware of that as well,” he said.

An independent report from Oxford Economics, released on Wednesday, found Airbnb contributed $3.7 billion to Victoria’s gross state product in the 12 months to March 2023.

The platform’s nationwide economic output over that span of $13.6 billion was estimated to make up 7.8 per cent of the tourism industry’s total contribution to Australia’s gross domestic product.


Topics: Airbnb
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