THE Tasmanian Hospitality Association wants the state government to act on some 500 unregulated holiday accommodation providers, to bring them into line with the state's accredited operators.
The association claims the unaccredited operators, who largely advertise through websites like US letting website AirBNB, escape the same building, council and safety permits that accredited operators pay for each year.
Association general manager Steve Old said this was despite them operating in direct competition with "genuine accommodation businesses".
"Anecdotally, it would appear the number of private property owners seeking to enter the short-term letting market and undercut legitimate accommodation providers by avoiding regulation is increasing," he said.
There are 539 holidays rentals listed on AirBNB, and Mr Old said many of these were not regulated.
"They have none of the safeguards that legitimate accommodation facilities must have as a proper regulated business, including fire systems and emergency procedures," he said.
Mr Old said he has written to the state government on the issue in an attempt to try and level out the playing field.
A state government spokeswoman said the government would meet with the THA and discuss its concerns.
Tall Timbers Tasmania is a 67-room accommodation facility on the North-West that employs 42 staff.
General manager John Dabner said unregulated letting was more of a problem in regional areas, marked as holiday destinations, like the East Coast.
He said this spelled dire consequences for businesses who were recovering from a downturn of tourism business of the past few years.
Local Government Association of Tasmania chief executive Allan Garcia said council powers were limited when dealing with these types of holiday rentals.
He said council planning schemes were not specific about regulating the activity.
Mr Dabner said he hoped unregulated letting was considered and clarified under a single statewide planning scheme, led by the new Tasmanian Planning Reform Taskforce.