How Airbnb is Killing Aussie Fish and Chip Shops
By IAN WHITWORTH
Starting your own business is a journey fuelled by vivid hopes and dreams. I love to hear about them. I hear family-transforming stories and inspiring escapes from the corporate hamster wheel.
I also hear ones that are pretty depressing.
A couple I know decided to bet everything on a small business. In their late 40s, they bought a fish and chip shop in an adorable seaside town.
It ticked all the growth-potential boxes. Sparkling beaches, growing appearances in Top 10 Hot Holiday Destination lists, “the new Byron Bay” and so on.
They knew they had to make some money to provide for their retirement. They’re thinking five years of hard work and frugal living could set them up. They bought a house in the town but rented it out and moved into a caravan to keep costs down while they got the business dialled in.
They knew it wouldn’t be easy, but were up for the task.
The Great Resignation, 2023-style
I was a cook in a seafood restaurant back in the day. I loved it, but it is a rugged night’s work. Brutal nonstop heat. Constant minor burns and cuts. Fear of live mud crabs. Your clothes and your car reek of stale cooking oil and garlic, and it never quite comes out no matter how much you shower. Living in a caravan could only intensify that experience.
They’ve owned the business for about a year now. They had four cooks. Last week, three of them resigned.
Of those, two wanted to stay in the job. But they have to leave town, because there’s nowhere to live. Their rental leases expired, and there is zero rental accommodation left. The town is all Airbnb now.
Previous staff have lived in the local backpacker hostel, but it’s $80 a night now for a share room. Can’t survive there on a cook wage. The nearest alternative town is a 90-minute drive on rough roads.
There are four restaurants and cafes in the area. All of them advertise nonstop for staff and can’t find any. They’re all opening fewer nights now.
The problem is getting worse. As short-term rentals take over the town, residential landlords are jacking up rents to big-city levels and beyond. It will reach a point where those food outlets simply aren’t viable.
Life will be objectively worse in that town.
Seaside ghost towns, brought to you by big tech
I’ve seen this in a few coastal places over the last few years. You visit a village that looks lovely at first glance. Visitors rent out a place for the holidays, picturing chilled good times at the local cafes and restaurants.
But there are no cafes or restaurants.
Because almost every house is a holiday house, and there’s not enough year-round demand to sustain anything other than the convenience store at the local servo.
Dining out in those towns is now a microwave sausage roll and a can of Monster Energy drink in the Ampol forecourt.
Seaside ghost towns, brought to you by big tech.
I fear it’ll be an endless five-year cycle. All the food outlets die. Which reduces the town’s holiday appeal, so the Airbnb returns drop and houses go back to residential rental. Eventually, new people will have a crack at opening a cafe, and the whole cycle starts again.
Byron Shire has announced restrictions on non-hosted short-term rentals to stop it killing the town: no more than 60 nights rental per year. Cue squeals from Airbnb that they, in fact, bring nothing but rosy benefits to regional areas.
A tightrope walk over a crocodile farm
I don’t know the answer. This isn’t a housing policy blog. You can’t stop change, and everything new has unintended consequences. Whether it’s new business models or regulations to control them.
From a business perspective, it highlights the risks you take if you’re thinking about starting a new business or buying one.
The further you go from the industry you know, the more likely there’ll be risks you didn’t see coming. Moving to a new industry, in a location you’ve not worked in before, is a tightrope walk over a crocodile farm.
The numbers in the books look good. The macro demand numbers seem set to rise. It’s the sea change dream you both wanted. Yet one unpredicted factor can burn you hard.
Anyone buying a business these days is going to think: what tech disrupters will threaten me in the future? But most of that thinking is in the context of potential competitors. Will someone bring out a better, cheaper, more convenient product? If you’re diligent, you might worry about direct competitors stealing your staff.
Buying a fish and chip shop, you’d be thinking you’re pretty safe from that sort of disruption. Nobody’s going to download their fried flathead.
You don’t think: what if a tech platform takes my staff’s houses away?
I’ve spent years writing about the joy of owning your own business, but a change of industry is a big roll of the dice.