Vancouver Hotel Prices Push Tourists To Short-Term Rentals, Airbnb Guests Recount
Vancouver announced their proposed plan to tax and regulate Airbnb operators last week, but the popularity of the short-term rental site among tourists highlights another problem in the city: affordable hotel accommodation.
Rebecca Ho booked a studio apartment through Airbnb for her parent’s trip from Hong Kong to Vancouver this past August. When booking accommodation, she was surprised by hotel prices: in general Vancouver is a “slightly more expensive” city, she says, but “hotels are considerably more (expensive) than in Hong Kong.” Ho recalls past trips to New York and Boston, where she found hotel pricing was also “relatively cheaper” than the Vancouver prices she found.
Ho was right about Boston. Based on the Hotel Price Index by Hotels.com, in 2015, Vancouver’s average nightly rate was $222, which was still slightly below New York’s $254. But Vancouver was above San Francisco ($221), Honolulu ($217), Boston ($214), and Miami ($207).*
Tourists aren’t the only ones who have turned to Airbnb for more affordable options.
John Laranjeiro, a businessman from Toronto, usually books into a hotel for business travel. But last week on his trip to Vancouver, he stayed at an Airbnb studio in the city’s Gastown neighborhood. Laranjeiro says the “hotel prices for the days I needed were almost three times the regular cost,” so he opted for an Airbnb.
Vancouver business owner Dan Blondal had a similar experience when booking accommodation for a colleague in mid-September. Blondal often books coworkers into smaller boutique hotels in the downtown core, as Airbnb is “not for everyone.” In this case, Blondal explains, hotel rooms were “booked solid and pricy” so he booked an Airbnb apartment for his colleague, who “was very happy with” it.
Growing demand in the tourism sector paired with low supply of hotel rooms have led to high hotel accommodation prices in Vancouver. Tourism is an important component of Vancouver’s economy, contributing over $6 billion annually and creating full-time jobs for 10 percent of the city’s population.
In 2015, 9.3 million people visited the city and stayed overnight, according to Tourism Vancouver. It also reported a total of 24,000 hotel rooms spanning Metro Vancouver.
Using basic math, if each of those 9.3 million visitors each required a hotel room for only one night in 2015 — with demand equally distributed throughout the year — Metro Vancouver would need 25,480 rooms to accommodate everyone.
Vancouver is about 1,500 rooms short.
And that isn’t taking into account the fact that tourists often stay longer than one night and that demand does vary throughout the year — with a greater influx of tourists to the city during summer months. Both factors put an upward pressure on demand. This is somewhat remedied by the fact that tourists don’t always travel alone, often sharing their accommodation with a partner, friend, or family member; some will also stay in unpaid accommodation.
Vancouver’s new legislation seeks to return apartments used as Airbnbs to the long-term rental market, as city residents are facing an affordable rental housing crisis. Vacancy rates for long-term rentals are below 0.6 percent. A Vancity Bank report from July claimed renting in Vancouver has become an “unreliable” alternative for younger, poorer households who cannot afford to purchase a home.
The move by the City of Vancouver attempts to restore affordability for local, long-term renters but may come at the expense of tourists seeking an alternative to high hotel prices.
