Victoria’s new economic engine is found in the regions

“Making it easier for travelers to enter regional areas and have that regional experience will benefit both Australia and, in many cases, local communities struggling to survive,” he says.

“One of the challenges we face as a country is that our hotel supply is concentrated in urban areas, so when you move outside of those areas, traditional accommodation tends to be limited,” he adds. “Short-term rentals add to that.”

“We are seeing increased demand to visit regional areas and more volume means more spend,” says Prof O’Connor. “So the multiplier effect is much higher, and that impact also trickles down to local businesses, who then spend with local businesses again, so the profits stay within the community.”

The popularity of short-term rentals in regional areas expands where and how economic value is created, according to Brennan. “As visitors choose regional accommodation, local businesses are expanding and becoming a larger part of the tourism supply chain,” he says.

Victorian Airbnb guests spent $4.1 billion in 2024, according to an Oxford Economics report, and tube spots weren’t the only areas to benefit thanks to short-term rentals.

spread the wealth

In addition to supporting a more equitable distribution of visitor spending across the state, the increase in travel also helps reduce revenue fluctuations for regional business owners. “Short-term rentals make it easier for people to travel, so travel seasons are increasing,” explains Prof O’Connor. “They increase demand and spread that demand over a wider area, which increases stability.”

In 2024, Airbnb guests in Australia stayed an average of three days at their chosen accommodation and spent approximately $320 per day on non-accommodation activities such as restaurants, retail stores and transportation. 84 percent of these Airbnb guests in the country were domestic travelers. This not only solidifies the economic value of local travel, but also demonstrates the importance of short-term rentals in the regional distribution of tourism.

“Short-term rentals create demand that is fueled by a wide range of local industries,” says Brennan. “Each booking supports the work of not only homeowners, but also cleaners, tradesmen, retailers and hospitality workers who serve visitors. These wages then circulate through regional economies through household spending to support their livelihoods,” he adds.

For more information about Oxford Economics’ research, visit: https://www.airbnb.com.au/e/ppap_australiaimpact