Speaking on behalf of the industry, the Accommodation Association of Australia said it's important that the inquiry examines the significant disruption in the market which has been caused by online platforms.
"The accommodation industry is pleased that the NSW Parliament is holding a fresh inquiry into the adequacy of the regulation of short-term holiday letting in NSW," said the Accommodation Association's Chief Executive Officer, Richard Munro.
"As things stand, the existing regulatory model has become outdated and it is time for it to be updated.
"Any new regime must strike a balance between the need to preserve the great Australian tradition of renting a house by the beach during summer and the grey areas in regulation and legislation which are being exploited by multi-national online platforms at the expense of consumer safety.
"Such platforms are effectively free-riding on the back of compliant operators who pay taxes in Australia which, among other things, help fund tourism promotion through organisations like Destination NSW."
The Accommodation Association intends to actively participate in the inquiry.
"The Association supports the development of a standard, national definition for tourism accommodation," Munro said.
"Such a definition could be developed by a national government agency, such as the Productivity Commission, so it can be applied by all levels of government, including local government.
"This will assist with lifting standards and investment in the entire tourism accommodation industry, resulting in a safer environment for consumers."
