The total revenue of the private short-term accommodation market in Nova Scotia multiplied almost 64 times over the last four years, reaching more than $70 million, Statistics Canada data show.
The listing of Nova Scotia properties on sharing economy platforms, such as Airbnb and VRBO, resulted in almost $5 millions in fees in 2018. The total fees collected by these platforms added up to only $80,000 in 2015, according to StatCan.
“This is still an emerging sector,” said Thomas Storring,director of economics and statistics for the province’s Finance Department. The growth rates in this sector are high because “the increase from one year to the next, when it’s starting from a very small base (amount) ... can be quite large,” he said.
The data has been collected for four years. StatCan has cautioned that they’re still looking for the best methods to measure the sector and to interpret the data.
“Nova Scotia’s short-term accommodation revenues per capita went up from $47 to just under $74 per capita (between 2015 and 2018) ... (The national average) went up from $52 to $74.5 per capita,” said Storring. “Nova Scotia growth was faster, but on a per-capita basis is very close to the national average.”
“We are catching up a bit to ... the scale of the national industry,” said Storring.
The short-term accommodation is still emerging sector in Newfoundland and Labrador and New Brunswick, said Storring. “Prince Edward Island on per capita bases has the largest amount of revenues in Canada,” he added. “Their growth has been rapid and faster than the national average.”
The growth in short-term accommodation revenue came with a similar growth in travel in Canada between 2015 and 2017.
“We’ve seen growth in the number of overnight trips in Canada by Canadian residents,” said Catherine Ayotte, an analyst with StatCan. “We see similar growth for the (Atlantic provinces).”
“If there is an increase of the number of the travellers, they have to stay somewhere and short-term accommodation is an option,” Ayotte said.
It’s important to identify what is considered a short-term accommodation service, she said.
“We often think of it as (people) are renting their houses, however this is not always the case,” said Ayotte. “Our research has shown a lot of typical accommodation (listings on the online accommodation platforms).”
“Our estimates include everyone that is using the platforms regardless whether it’s a household or a business,” said Ayotte. “It’s quite possible that in the Atlantic, we have a higher rate of businesses using these platforms for marketing.”
This conclusion meets estimates from a survey recently conducted at Dalhousie University. The survey showed that less than two per cent of Atlantic Canadians rented all or part of a property they own on Airbnb, but 75 per cent of them heard of it and about quarter used it to book accommodations, said Dal professor Karen Foster.
Growth in short-term rental platforms, however, was significant enough for the Nova Scotia government to pass new legislation that will repeal the Tourist Accommodations Act. According to the legislation, short-term accommodation providers will be required to register through an online system except those who rent their primary residence. The changes will take effect in March 2020, allowing time for consultation with industry and municipalities.
“It needs to be formalized a lot more,” said Neil Lovitt, the planning manager at Turner Drake, a real-estate counselling firm in Halifax. “We need new regulations that structure how it can operate.”
For Lovitt the question is: “Where the line is drawn between where (the short-term accomodations) are in direct competition with the hospitality sector, and where they are creating a new market that wouldn’t exist otherwise.”
However, the impact on the hospitality sector itself might not be great, or as great as expected, if the sector innovates itself in response, he said.
“Short-term rentals are offering largely a cost to advantage because they’re available at a lower price point. And in more locations,” said Lovitt.
For the typical hospitality businesses “the accommodation itself is only a small part of the overall experience that they’re selling ... (they could provide) things like health and wellness services, retail,” he added.
The province is looking at the rise of the short-term rentals platforms from the hospitality sector perspective and tourism strategies. The priorities are going to be different in the future, said Lovitt.
He predicts there will be local battles over issues such as housing affordability, especially in the rental market. “Not just in the urban centres, where it’s already been a bit controversial, but also rural areas that already have a lack of rental accommodations,” Lovitt said.
“I have a feeling that the hospitality aspect of it is going to become overshadowed fairly soon with just the overall sort of housing issues associated with it,” he said.
The main questions for him, “(are these platforms) taking away options for people that live in the community full time? How much is it affecting the ability of smaller communities to attract workers because the housing stock that's there is now unavailable.”
“There's a flip side to it as well, which is that it's a bit of a lifeline for a lot of smaller communities and that this is the first kind of new housing demand that they've seen in a long time.” Lovitt said.
