Airbnb boom hits the wall and holiday makers benefit

1. Airbnb boom hits the wall and holiday makers benefit

2. Earnings season shows just how tough it is on Main Street

3. At BHP the future isn't in iron ore, it's copper

4. The CFMEU is missing the point

Confused about how the 'right to disconnect' laws apply to you or your business? Amanda Lyras, partner in the Workplace Relations, Employment & Safety team at Clayton Utz, explains all.

Listener Luke asks:

"Is it just me, or are markets way off in pricing in rate cuts, more so than normal?

 

It seems the pandemic was completely unprecedented and the shock waves are unable to be managed as a result.

 

We have high inflation, strong eco growth, good unemplyment numbers, decent real estate, and people still have plenty of money to spend (less and less each month, however). Is this normal historically?

 

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Thanks for reading my opinions on the week's biggest stories.

- Sean Aylmer

Some good news for those sick of paying thousands of dollars for holiday accommodation during peak times. Holiday home prices are falling ten per cent this year, as travellers return to hotels, residents in tourist destinations tire of Airbnb-type services, and local authorities make running short-term rentals more expensive and difficult. It happened this week in Victoria with the state government imposing a 7.5 per cent levy on short stay accommodation. A story in The Australian Financial Review this week, based on data compiled by Beyond Pricing, says about 208,000 holiday homes are listed for rent every month on average, the vast majority through the Airbnb platform. Prices have fallen by 11 per cent to an average of $311 per night, while fewer than half of all short-term rentals around the country are occupied, with Melbourne and the Gold Coast among the weakest markets. Hotels are faring much better. Across the capital cities, they were at least 70 per cent full over the first seven months of the year, with room rates above their pre-pandemic levels. The backlash from residents is a global phenomenon. New York City has started prohibiting some short-term rentals. Barcelona will do the same in 2028. Competition is a good thing. People now have choice. The good news for holiday makers is that the competition is making it cheaper.

Economics is a long way from an exact science, and most of the official data, by the time it is released, is well behind the pace. Earnings season shows you what is happening right now. Coles boss Leah Weckert said 90 per cent of shoppers had changed the way they buy their groceries, looking for promotions, relying on loyalty points and purchasing cheaper, often private label, goods. "Meat-free Monday" is a thing, as people try to save money. Endeavour Group, which owns pubs and liquor stores including Dan Murphy's, said when people eat out, they are looking more closely at the cheaper options - fish and chips are replacing the famed chicken schnitzel. Ingham's share price tumbled after it said sales growth of chickens - which is the most affordable meat protein - is likely to decline. When people are cutting back on food spending, it's clear there's a problem in the economy. Beyond that the banks have reported higher lending arrears - more people not paying back loans on schedule. A bunch of consumer discretionary stocks have been marked down by investors after providing weak earnings guidance. What earnings season has proven is that no matter what the economic data says, Australia and Australians are struggling. 

The new "right to disconnect" laws that kicked in this week will forever change workplaces, but not because people will stop working outside their allotted hours. It will change workplaces because management and workers will have to consider, and discuss, what is "reasonable". And that applies to 16-year-old part-time workers trying to organise shifts around school hours, through to lawyers and doctors and investment bankers. Under the laws, employers face fines of up to $93,000 for getting in touch with an employee for non-essential reasons outside of working hours. Australia is following nations including France, Spain and Belgium in introducing right to disconnect laws to protect workers. A fundamental reason for conflict in the workplace is that the ground rules aren't clearly laid out. Some jobs involve after-hours work. Others involve after-hours disruption. That is fair enough so long as the employer and employee are on the same page. It is exciting to think that more workplaces are now going to have conversations about how much a boss expects an employee to work. And what an employee thinks is reasonable. It could reinvent the employer-employee relationship.

If both sides of federal politics agreed to put the CFMEU into administration, you would think the militant union might rethink its public relations campaign. But no. Tens of thousands of protestors took to the streets in major capital cities to fight the legislation enabling the administration. It was not pretty and some of the language used was disturbing. Sacked CFMEU leaders promised to campaign for the "absolute destruction" of the Labor Party. ACTU secretary Sally McManus was called a class traitor. Protestors labelled the Albanese government as fascist led by "Albanazi". Sacked CFMEU NSW secretary Darren Greenfield, who is facing charges of taking bribes from employers, which he denies, called the PM a "dirty rotten bastard". Unions including the Electrical Trades Union, the Australian Manufacturing Workers Union and the Maritime Union of Australia joined the CFMEU in attacking the PM and promised to fund legal challenges to the government’s CFMEU administration laws. Clearly this is a big test for Albanese. Labor governments have more troubles with unions than conservative governments. It is also a test for the trade union movement. Thirty years ago, two in five workers belonged to a union. Today the number is closer to one-in-eight. Over decades, trade unions have fought hard for workers and won rights that would never have been achieved otherwise. If the union movement wants to win supporters, the CFMEU's behaviour this week isn't helping the cause. At best it was tone deaf, and at worst, disturbing.  

BHP's results this week demonstrate just how important iron ore is to the world's biggest miner. About 71 per cent of BHP's underlying earnings of around $20 billion came from iron ore. As CFO Vandita Pant put it, iron ore brings in "oodles of cash". But if you hadn't seen the numbers, you wouldn't know that iron ore is the most important commodity at BHP. After the full year results announcement chief executive Mike Henry talked about copper, and mostly copper. The results presentation put copper ahead of iron ore in the segment report and there's more space devoted to the reddish metal. The capital spending in coming years is focused on copper and potash, not iron ore. The brief commentary with the ASX release starts with copper projects under development in Australia, Chile and Argentina. Copper gets three sentences. Iron ore gets one. You get the gist. BHP's present is all about iron ore, but its future is in copper. Even potash - the fertiliser business in Canada on which BHP will spend around $15 billion this year - gets a back seat to copper. Copper is why BHP tried buy Anglo American for $75 billion earlier in the year. It's why the Big Australian is expanding Olympic Dam in South Australia and focusing on its Chilean mines. The money maker at BHP is iron ore but the focus is on copper.

5. "Right to disconnect" will change workplaces forever

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AND ONE LAST THING...

This has nothing to do with business news. It is, however, really cool. Put your headphones on and then listen to this: the Virtual Barbershop. It's an incredible piece of audio that tricks your brain into thinking you're in the barber's chair. Almost 20 years old, and still just as impressive.