Short Term Differential Accommodation Rate

Bed and Breakfast (B&B) accommodation services have been part of most holiday destinations for eons. Once upon a time, local papers, word of mouth and visitor centres were how people found out about the options available. That has changed with very sophisticated virtual systems in place to market and manage bookings.

The ease of the process means that more and more people are listing properties and using investment properties differently. Long-term residents are being replaced by ‘short termers’ and the traditional B&B, where you have a host, a room and breakfast has become a very rare thing.

Spend some time going through either Stayz or Airbnb and it is very clear that the absolute majority of offerings are pretty much stand-alone, full-time short term hire properties. They are not the backyard restored railway carriage or funky loft above the garage as part of a property with a family in residence.

Don’t get me wrong, it is great that property owners can make the most of an opportunity and demand for accommodation via whatever platform. If you own an investment property and rent it out, come tax time you are claiming every skerrick possible against the income of the property. Make such a claim and you step into a commercial world.

The Fremantle Chamber of Commerce supported the City of Fremantle’s Short Term Accommodation differential rate because it sets an even playing field in a commercial environment.

There is a world of difference between a private online booking and a hotel room reservation. Commercial properties are required to take on much greater responsibility via a range of regulations and legislations – health, fire, RSA etc. These operators pay higher commercial rates (which exclude rubbish collection costs), they employ staff and also contribute to things like marketing through a variety of mechanisms – direct and indirect.

Even today, Fremantle doesn’t have enough hotel rooms to get traction in the lucrative weekday event market. Because of this the City has been actively encouraging investment in new hotels and serviced accommodation – and that is why there are a number in planning.

The Chamber’s position is not about Airbnb vs Hotels. Conference planners will make decisions based on meeting venues and hotel rooms in the precinct. The likes of Airbnb sit alongside hotel operators, but numbers ebb and flow – which means they are not a guaranteed replacement for hotel rooms. The more meetings and conferences we can attract to Fremantle, the more hotel rooms that get booked. This also directly benefits property owners registered with companies like Airbnb and Stayz – because people will have preferences as to where they stay.

Many of the comments from short-term operators on the City’s My Say website sing the virtues of their contribution to the Fremantle economy because visitors use local businesses and attend events. They also express concern about getting nothing for the additional rate.

I am very happy to fill in some of those gaps. What they have been getting free of charge for many years, is the opportunity to run a business – in a place that people want to come to visit – and where someone else, the business community, gets to pay their destination marketing costs for them. Someone else also looks after their public nuisance issues – neighbours and other rate payers.

The cost of delivering public amenities and events in Fremantle is a cost that many other localities do not have to bear, but are a part of the City’s vitality. We are also starting to spend some considerable funds in marketing through the Fremantle Destination Marketing Group.  It is appropriate that all commercial accommodation operators contribute to these programs and that must include Short-Term Accommodation operators.

It is a result of great foresight that Fremantle has a Short Stay Accommodation Local Law, but there is room for improvement on how the local law is delivered and marketed. Not enough know about it and the Chamber believes compliance needs to be stepped up to respect those who do the right thing.

Ultimately, Short Stay Accommodation providers are commercial operators. The new differential rate is about making a contribution to the development of Fremantle as a destination and the cost of their own compliance. It is already expected of the hotels. Let’s create an even playing field.

2 thoughts on “Short Term Differential Accommodation Rate

  1. Hi,
    I agree with your points. the problem is that, as with many announcements, there is a lack of detail in the Fremantle Council proposal.

    Maybe I am running a short term from a rental property. Fair cop that I am treated like a business. My issue is “How does the Council know that I am doing so?”

    Oh, it’s largely an honour system where some people register and some don’t. This is not really an even playing ground and certainly not business like. What will the Council do to improve compliance in this area? I know it’s not your job to fix this, but it should be a consideration if you are supporting the Council action.

    Maybe we need better communication to limit the shifting the ire from one party to another.

    • Hi Christine,

      You are right! I mentioned towards the end that of the piece that there was room for improvement in how the Short-Term Accommodation Local Law was delivered and marketed by the City. It is the case that not enough people know their responsibilities and compliance requirements. I have some considerable opinions as to how the City could make improvements to the compliance program and will be now turning my attention to the delivery of the Local Law.

      Olwyn

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