The rise of Airbnb may not be so inexorable after all, with holiday home prices sliding more than 10 per cent this year as travellers return to hotels and local authorities make running short-term rentals more expensive and difficult.

About 208,000 holiday homes are listed for rent every month on average, the vast majority of those through the Airbnb platform. But a broad backlash from residents in popular tourist destinations, and a resurgence in hotels after the COVID-19 pandemic, has made it a difficult 12 months for landlords, new figures show.

Prices have fallen by 11 per cent to an average of $311 per night, while fewer than half of short-term rentals around the country are occupied, with Melbourne and the Gold Coast among the weakest markets. That is according to data compiled by Beyond Pricing, which runs a platform allowing Airbnb landlords to manage their properties. Hotels are faring much better. Across the capital cities, hotels were at least 70 per cent full over the first seven months of the year, with room rates above their pre-pandemic levels. On Monday, EVT, the operator of Rydges, QT and Atura hotels, reported that occupancy rates across its portfolio had hit 77 per cent.

On the Mornington Peninsula, Rye resident Suzanne Jones has taken the cottages at the back of her property off the market over winter.

“There was just too much effort for so little return,” Ms Jones, a public relations professional, said. “I don’t think guests are aware of the costs of keeping an Airbnb to the required standards.”

“The costs of cleaners has skyrocketed and having to change linen [after each guest] makes it all expensive. Plus there are council taxes, insurance and more competition [in the region],” she said. “It’s easier, just like many businesses in this area – restaurants, the ice creamery – to shut the doors over winter,” she said.

According to Beyond Pricing – which compiled the figure from its own platform and with data from online travel agents such as Expedia and Booking.com – a night’s accommodation in a holiday rental averaged $311 between December and May, down from $351 a night over the same period a year prior.

More competition for Airbnb

By lowering rates, hosts were able to lift occupancy by 3 percentage points to 49 per cent. But revenue per available night– the key industry metric – still fell 6.3 per cent on average nationally to $163 a night.

Seiko Ma, managing director of property management company Bodhi Tree Group, said the short-stay market had begun to quieten last year, after peaking in the immediate aftermath of pandemic health restrictions in 2021.

Ms Ma said Victoria and the Gold Coast were “very quiet”. “More new hotels opening their doors is providing competition to Airbnb,” she said.

But it isn’t just Victoria, and key tourist destinations in Queensland, where renting a home on Airbnb has become less lucrative over the last year.

In Western Australia’s Margaret River, the vacancy rate has remained over 70 per cent in winter, according to Maxine Petty, whose company manages 40 rentals in Augusta, a coastal town. “It’s absolutely getting tougher,” Ms Petty said. “If you plug Augusta into Airbnb today there’s close to 100 options in a town of 1500 people. Half the town is holiday homes.”

An increase in hotel rooms, and in competition from other Airbnb rentals, has been compounded by a backlash from residents in some towns. The global phenomenon has been building since before the pandemic as the number of properties being let to short-term holidaymakers increased.

While small businesses often welcome the surge in tourists, others fear higher rents for the properties that remain available – and a deluge of holidaying families.

New York City has started prohibiting some short-term rentals. Barcelona will do the same in 2028. On Tuesday, the Victorian government introduced legislation to impose a 7.5 per cent levy on short-stay bookings, while from September, Byron Shire will start enforcing a 60-day annual limit on short-term rentals in places places such as Byron Bay and Lennox Head, where Airbnb rentals were nearly a fifth of the housing market pre-pandemic.

WA is offering a $10,000 grant to short-term rental owners who convert their properties to long-term rentals for a minimum of 12 months.

Tough measures

Keiran Craig-Jones, executive director of the Short-Term Accommodation Association, said increased taxes, council rates, mortgage rates and regulation were making it increasingly difficult for Airbnb owners to earn money.

Ms Craig-Jones, said no good evidence existed to suggest measures like the annual usage caps in Byron Bay were beneficial.

“Arbitrary restrictions like these do more harm than good, limiting options for travellers and impacting the livelihoods of property owners,” she said. Nila Oyama operates a holiday rental and wedding venue in the Hawkesbury, north of Sydney. She has been trying new ways of finding renters, and says it is “very hard to get bookings in the current economic climate”.

Ms Oyama has tried networking and advertising. She’s also cut prices even as her costs rise.

“I am one of the very few fortunate [operators] in the region.” she said.

Similar to restrictions in Byron Bay, the NSW government introduced 180-day limits to renting out Airbnb and similar accommodation in 2021. Ms Oyama said it was a “ridiculous” decision.

“Imagine telling a local coffee shop, a local baker, a local real estate agent for example, that they can only do business for half a year,” she added.

The winners? According to Ms Oyama, only the “international hotel chains”.