You can't beat the disrupters so join them, operators told

Deputy Editor - Business·NZ Herald·

21 Jul, 2015 05:00 PM5 mins to read

Drones are being seen as another tool in emergency situations such as fighting fires. Photo / NZME

Instead of moaning, the tourism industry needs to use companies such as Airbnb.

One travel industry leader says if operators are too busy worrying about disrupters in the market they probably won't survive.

Online travel agents are growing rapidly and adding new features while accommodation service Airbnb is now challenging the world's biggest hotel chain, Hilton Worldwide Holdings, for market value.

Airbnb has doubled the number of places it has listed in New Zealand during the past year and is opening an office here.

The seven-year-old company had 1.2 million listings around the world. It has 6000 listings in New Zealand, double the number it had a year ago.

New Zealanders are among the highest users of Airbnb, booking half a million nights in the past year.

Chief executive of the Tourism Export Council Lesley Immink said while consumers stood to benefit from greater competition from new entrants it would push down prices for operators.

But there were also opportunities to work with disrupters.

"If you have time to complain about this instead of understanding how to leverage them, you probably won't survive," Immink has said.

Like other hotel chains, TFE lists its rooms with online travel agents and uses Airbnb as a distribution channel.

"It's a complementer," said Emma Fraser, group director of marketing at TFE Hotels, whose properties here include Rendezvous hotels. Airbnb promoted living like a local.

"We're taking some of those learnings and taking them into our hotel brand," she said.

The online travel agents were also giant review sites, giving hotel operators large amounts of information about themselves, and rivals.

TripAdvisor was a useful research tool which TFE staff monitored constantly.

"At the end of the day people don't choose a three- or four-star hotel any more, they buy based on recommendations and adviser ratings."

Moteliers are worried that some "legitimate" operators will be forced out of business.

Commercial accommodation was required to be built to a certain standard to ensure safety and allowing the proliferation of unregulated providers endangered the whole tourism sector, said Motel Association NZ chief executive Michael Baines.

"Every tourist within New Zealand needs a place to stay. All it would take would be one or two disasters as a result of these ... accommodation providers and our reputation as a safe, high-quality tourism destination will be in jeopardy," Baines said.

The Tourism Industry Association is neutral on the disrupters.

TIA chief executive Chris Roberts said services like Airbnb provided an alternative. "Just as some travellers prefer hotels to B&Bs or holiday parks - and vice versa - we believe there is room in the marketplace for this style of accommodation."

Travellers had to be aware that they get what they pay for, Roberts said. "Staying at a commercially operated property ensures a level of safety, security and service which may not be offered by unregulated accommodation providers."

The Inland Revenue Department is taking an interest in the disrupters such as Airbnb.

Inland Revenue's priority is to maximise the amount of revenue collected and improve voluntary compliance, a spokeswoman said.

"If a person is letting rooms in their home to tourists (such as on Airbnb) they are effectively acting as a landlord and will need to pay tax on that income accordingly."

New rules on drones to take flight

New rules covering drones - which are disrupting areas from movie making to search and rescue - will be unveiled tomorrow.

Existing rules were designed to cover model aircraft but the proliferation of affordable drones has forced a rethink in this country that is promoting itself as a test bed for international operators.

Drones are being seen as another tool in emergency situations such as fighting fires. Photo / NZME

Earlier this year Airways NZ was getting about 70 applications a week to fly them, with about 50 in controlled air space. "The rules will enable operators to take advantage of new opportunities, while providing safety for other airspace users, people and property on the ground," the Civil Aviation Authority said.

The announcement comes a day before Callaghan Innovation's unveiling of the six finalists in its C-Prize drone competition.

The grand prize winner - to be announced in December - will receive $50,000 as well as an expenses-paid trip to exhibit at the 2016 National Association of Broadcasters trade show in Las Vegas, the largest international trade show for media content and technology.

Callaghan's aviation sector manager Chris Thomson said the technology was not only revolutionary but its impact on sectors including film-making and agriculture was disruptive.

Farmers were now able to get accurate information on the state of their land and crops.

"In the film industry there are amazing aerial shots that only the big budget films used to have," Thomson said. Rather than opposing drone use, helicopter operators saw them as another tool and were using them.

"The smart operators are getting on board," he said.

During the past two months there had been approaches from three companies wanting to trial technology here. He said the open regime, comparatively flat bureaucracy and lack of demand for military airspace helped make New Zealand attractive as a test bed.

What is disruption?

Rapid business change caused by fast technological change or transformation of business models. Cheap access to cloud computing means businesses don't have to invest in infrastructure but typically develop app-based models for customers to access goods and services, mainly through smartphones. This is leading to changes in the patterns of production and consumption.