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Average hotel night in Vancouver is $260; Airbnb is $150

Affordability for visitors becomes part of home-sharing debate at city council
Ty Speer, president and CEO of Tourism Vancouver, hopes that the city can strike a balance between allowing visitors a choice by permitting home-sharing platforms such as Airbnb and also making sure that there was affordable rental stock in the city. Photo Dan Toulgoet

Vancouver is an expensive city for people who want to live here.

But it’s also not cheap for people who want to visit.

One of the speakers at Tuesday night’s public hearing about the City of Vancouver’s proposed rules for short-term rentals such as Airbnb was Ty Speer.

Speer is the president and CEO of Tourism Vancouver.

He said that during peak seasons, the occupancy rate at Vancouver hotels is 90 per cent; this past September it was 92 per cent, and the annualized rate is 80 per cent.

With so many people clamouring to visit Vancouver, and no new major hotel developments on the horizon, the average hotel room rate is $260 a night.

The average Airbnb rate in Vancouver is $150 a night, says Alex Dagg, a policy manager for Airbnb who also spoke at the hearing.

Speer said that Tourism Vancouver’s hope is that the city can strike a balance between allowing visitors a choice by permitting home-sharing platforms such as Airbnb and also making sure that there was affordable rental stock in the city. "Our visitors want and need choice but I have to be mindful of businesses that need staff and staff need a place to live."

Answering questions from councillors, Speer said the availability of Airbnb rentals does not appear to have a negative effect on hotels’ ability to compete on price.

“The growth [in tourism] has spread the wealth for everyone,” he said. “Hotels and platforms are both doing well…

“We are going to face some challenges with the availability of lower priced visitor accommodation whether it’s short-term rentals or hotels. All our rates are on an upwards trajectory. It’s a success problem, not a failure problem.”

He added, “Home sharing has a lot to add the economy if done well. It does require strong compliance and platforms and hosts taking on the responsibility of being good neighbours.”

Octavian Cadabeschi of UniteHere! Local 40, which represents hospitality workers throughout B.C., said that allowing home owners to offer short-term accommodation takes secondary suites out of the rental housing market. Some of the union’s members have had to move out of the city to find affordable rent. The union wants unoccupied secondary suites to be put into the rental stock.

Unregulated “ghost hotels” — multi-unit property owners who market exclusively on sharing platforms — threaten workers’ job hours by taking away business from hotels, Cadabeschi said.

He wondered how the city could force owners to comply with the rules and provide accurate information.

“The housing shortage demands bold actions,” he told councillors.

The city’s proposed policy does not allow people to offer secondary and basement suites as short-term rentals. Only principal residences may be offered as long as home owners pay an annual $49 fee, comply with building and fire safety regulations and meet good-neighbour requirements. Enforcement would be complaint-based as well as through random audits.

A staff report says that if people were not allowed to offer secondary and bedroom suites as short-term rentals, it would put 400 to 1,600 units into the rental housing stock.

NPA Coun. George Affleck asked Speer whether visitors would go to other cities in search of more affordable accommodation if those units were taken out of the home-sharing rental stock,

“I’m not convinced that solely short-term rentals would affect that,” Speer said. “It wouldn’t be correct to assume all short-term rentals are cheaper than a hotel.”

Vision Vancouver Coun. Tim Stevenson took on Affleck’s concern. “If I’m going to Paris [and find it’s very expensive], I don’t say, ‘Oh, I’ll go to Berlin.’ I’m not sure how many people would go to Saskatoon instead [of Vancouver].”

“We like our chances against Saskatoon most days,” Speer responded before adding there are people who are price sensitive when it comes to choosing travel destinations.”

NPA Coun. Elizabeth Ball asked if the proposed policy, which would require Airbnb hosts to get licences, would have an effect on people who open their homes during major events such as the Olympics.

Speer said home-sharing platforms are much more effective at making that possible. “They are very powerful machines and some of the biggest brands in travel. You’d go straight to the platform.”

Speer was, however, unequivocal in his opposition to the proposal to ask Airbnb guests to voluntarily pay a three per cent fee to help the city cover its costs of enforcing licensing rules.

“That three per cent levy is a tax on consumers and we don’t think it’s right for our visitors to be charged a fee. We don’t think it’s the right message for people who want to experience our great city and pay for people who are not compliant,” he said. “I understand the need to fund the compliance regime. Our view is that it should not be the burden of the visitor. The customer has done nothing other than take advantage of a service. It’s a connection that doesn’t make sense.”

Speer said Tourism Vancouver was in favour of the province imposing a tax system on home-sharing operators.

All of the Airbnb operators who spoke at the hearing said they were willing to pay a three per cent tax. Airbnb said it was possible to incorporate the tax on its platform if the tax was province-wide but it could not ask customers to pay a voluntary fee.

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