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Byron Shire
December 7, 2021

Licenced B&Bs, resorts and backpackers under the hammer as AirBnB bites

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Paul Bibby

With the rise of Airbnb-listed properties, a host of bed and breakfasts, resorts, and even a local backpackers hostel have all gone on the market this year.

Among them are the [email protected] resort in Suffolk Park, and the Holiday Village backpackers hostel in the heart of Byron Bay – both of which are on the market – and the La Vista bed and breakfast in Ewingsdale, which sold a few months ago.

New figures from Byron Shire Council show one in six properties in the shire are being holiday let. Photo: AirbnbSecrets

The Echo does not suggest that these are not profitable businesses, but their placement on the market is part of a broader pattern across the Shire, which suggests that licensed owners and property managers are not making as much money as they used to.

Other licensed accommodation operations have been sitting on the market for months or even years as the owners try to get a decent price for businesses they have poured their hearts and souls into.

‘It doesn’t surprise me that people are selling up,’ said one licensed operator, who asked to remain anonymous.

‘The impact of Airbnb and Stayz has been pretty catastrophic. The odds are stacked against you.’

Unlike their unlicensed counterparts, the Shire’s 400 licensed operators pay commercial rates, which is money that Council can use to provide basic community amenities such as public toilets, parks, and cycleways.

By contrast, there are 7,000 properties listed on Airbnb in the Shire, none of which makes these contributions.

Licensed operators are also legally required to get a particular development application to begin operating, meet certain safety and hygiene standards, and to have commercial insurance.

As a result of these expenses, the rates they charge customers are generally higher than those who do not meet any of these requirements, putting them at a commercial disadvantage.

‘We’re part of the community and so we wanted to go to the effort of doing the right thing by the community,’ the co-owner of the Planula bed-and-breakfast retreat, Wandy Hochgrebe said. 

‘Then you get people who buy a house solely for the purpose of renting it out on Airbnb on the weekend.

‘I know some people say, “I’m just getting a bit of money on the side,” but we wanted to be within the rules and to be responsible members of the community.’

Price drop

A number of other licensed operators interviewed by The Echo stated that they have had to repeatedly drop their prices since the arrival of unlicensed operators using Airbnb and Stayz.

‘Look, there’s nothing wrong with a little bit of friendly competition, but we’ve had continual downward pressure on margins for years and it’s not sustainable,’ said an operator who asked to remain anonymous.

‘It’s a tough thing to swallow when others aren’t playing by the same rules, and I think it’s definitely encouraged people to sell.’

In the leadup to the last election, the state government granted Byron Council an exemption from it’s new short-term holiday-letting regime, allowing it to impose a cap of 90 days on operators.

The licensed operators interviewed by The Echo said this would affect some Airbnb operators but that the majority would be unaffected.

‘It’s a drop of water on a very parched desert,’ one operator said.

‘You’re looking at a town with the highest level of per capita Airbnb penetration in the world,’ one operator said.

‘It doesn’t solve any of the underlying problems around the uneven playing field.’


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9 COMMENTS

  1. The deregulation catastrophe.

    Exactly the same uneven playing field being happily facilitated by Council with proposed LEP amendments to allow ‘convention centres’ in rural zones where the owners will pay bugger all in rates and other overheads.

  2. The author of this article Paul Bibby states “In the leadup to the last election, the state government granted Byron Council an exemption from it’s new short-term holiday-letting regime, allowing it to impose a cap of 90 days on operators.”.

    This is incorrect as Byron Council still has to make an application to the DPE for an exemption to the SEPP amendment for a 90 day cap on STRA which has still not been promulgated statewide. The government’s Code of Conduct still has not been presented for public exhibition.

    Perhaps the Echo can get some answers from the relevant Ministers about these important points that effect so many in the shire.

  3. It’s much better for clients who can now search for less expensive accomodation. Realistic pricing for a simple overnight stop.
    Many Airbnb owners comply fully with fire regs and have bed and breakfast insurance with public liability.
    The more Airbnb choice the better as owners will be in completion with each other to raise standards to attract guests.
    You only have to look at the majority of reviews that guests leave to see what a great service they can give.

    • John, short term holiday letting in Byron Shire’s R2 residential zones is an illegal and prohibited activity. The Byron 2014 LEP states that tourist and visitor accommodation is a prohibited activity unless it has a DA like B and B’s. Those who have an STRA in those zones could still have a class 4 action in the Land and Environment Court taken against them.
      The review system that Airbnb uses is not honest nor gives a true depiction as occupants give a positive review expecting a positive review from owners/managers.

  4. Also if you rent out part of your personal residence in any way it becomes subject to Capital Gains Tax unless you are going to lie to the Australian Tax Office and also hope no-one dobs you in to ATO

    • I have met a number of holiday let owners and managers. Their lack of ethics is what they have in common. They are only interested in money and not community or a neighbourhood.

      If they lack ethics they are probably ripping off the tax system. They deserved to be reported to the ATO. If audited, and the ATO are auditing many holiday let owners, they will have to pay the tax that they did not pay plus a 50% penalty.

  5. With North Byron Parklands Splendour etc events of up to 58,000 tourists, our present stock of houses for 30,000 residents is not enough, even as renters are being kicked out and house sales are going to holiday let investors. Whats the squatting laws?

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