New competition encourages innovation

Competition is a critical driver of performance and innovation.

It forces you to deliver the very best results and services. 

Disruption can be difficult and challenging at first.

The media have experienced this thanks to the internet and social media. The taxi industry is currently experiencing it with the introduction of Uber.

Most recently we have debated the disruption of the traditional accommodation industry by the sharing economy.

The introduction of Stayz and Airbnb has forced governments to debate and implement regulation.

On July 1, new state regulations came into effect to address the new arm of the accommodation sector.

The changes now allow people to let up to four bedrooms in their own homes without a permit for short-term visitor accommodation.

A Deloitte report showed Airbnb brought in a contribution of $55 million to Tasmania’s gross state product, and almost 600 jobs in 2015-2016.

Across the state nearly 125,000 people stayed at Airbnbs through the year, spending $86 million during their visits.

In Launceston we have a number of traditional accommodation developments. There’s Hotel Verge on the corner of Cimitere and George streets and the Silo project.

Last year the Clarion Hotel sold for $7.2 million to the company preparing to build its fourth hotel in Hobart.

Traditional accommodation clearly still has a place in the market.

That’s why it was surprising to see that the City of Launceston Council  will debate a motion to create a policy to regulate the accommodation industry.

Alderman Darren Alexander, in his motion, questioned whether the freedom given to share economy operators was a disincentive for investment in traditional accommodation projects.

Rather than focusing on red tape, we should keep our attention on how the two systems work together.

Launceston and surrounds are securing more events than ever before – whether it be large sporting championships, concerts or festivals.

The rise of Airbnb and Stayz offers competition and promotes innovation. This can only be a good thing and the result will see our region continue to grow.