Here is a link to an interesting article from Business Insider. Airbnbust Fears Prove Airbnb, Short-Term Vacation Rentals Face a Reckoning
Our reservations are down for 2023 and we suspected this was the reason.
Here is a link to an interesting article from Business Insider. Airbnbust Fears Prove Airbnb, Short-Term Vacation Rentals Face a Reckoning
Thank you for posting this; it’s a very informative article.
The article confirms what’s been reported here: an oversupply is hurting occupancy rates.
The article also suggests that regulation can be the incumbent host’s friend, to manage supply growth.
One question will be whether that regulation occurs and how and where. Will it lock in advantages for existing hosts? Or create a lottery system? Or set caps?
I ran across that article yesterday. Airbnb has seemingly purposely facilitated this overglut and race to bottom pricing by coming up with one scheme to lure in new hosts after another.
In my little corner of the world, the # of units went from two pre-covid to at least 20 now. There are several owners that are still acquiring properties. Supply has driven prices down.
In that article, reported that 2022 was Airbnb’s first profitable year ever.
My small regional town went from 19 entire homes to 32 last year…. I have watched with interest, the poor ratings, slow bookings and a couple have returned to LTR.
This isn’t the high passive return they were expecting .
Many areas are bringing in expensive registrations ($20 thousand +)or restrictive rules to try and control the growth.
I don’t understand why Airbnb want mess in their own nest and make themselves unpopular.
The more listings there are, the more hosts feel the need to drop their prices, ergo, guests are more apt to book. It doesn’t matter to Airbnb whether they collect their service fees for 10 bookings @$100/night or 20 bookings @$50/night.
They don’t seem to realize that hosts will go to ltr if they have to drop prices to an unprofitable level, or they don’t care, as there are always new, clueless hosts. I just read a post the other day from some newbies who were distressed that they hadn’t been getting bookings, saying, “We thought it would fly off the shelf.”
My town, population 25,000+ has probably added 30 new str’s in the last year and they’re still going.
We are certainly more nervous than we’ve been for three years and more nervous than we were for the years before COVID. We are used to being almost fully booked six months and 75% booked 12 months ahead in advance, and that is NOT happening in the past 12 months. On the other hand, the gaps in the schedule seem to fill in at the last minute, and we only have one three-week window between now and Labour DAY so that’s back to normal (for us). What ISN’T back to normal is that after the end of August (only five months away) there is NOTHING.
Although the impact of the glut/slowdown has not really affected our bottom line, it has affected our confidence in maintaining that bottom line – and that leaves us better off than many, and we appreciate that.
When we get a chance to ask guests why they chose us when they have an ever-increasing supply of hundreds of other choices in the metro area and dozens in our suburb, what we hear most often:
- many of the competing listings look like the host "just put a bunch of cheap Ikea furniture in their basement ‘suite’ "
- our decor – furniture, warm colours (walls etc) – had warmth and character: many competing listings were “cold” or “boring” or “soulless” and the online listing just didn’t make them feel like “Ooooh – I want to be there”
- They noticed that the praise in most of our reviews went beyond the five stars and was effusive and enthusiastic in the review notes (something that every one of the experienced regulars in this forum knows how to cultivate with a thousand little things and gestures)
- the garden photos in our listing and the comments in so many of the reviews about the flower garden being so beautiful and how it was fun being able to cut their own fresh salad herbs & seasonings or having their kids go out back after lunch and pick raspberries for desert. (We have deliberately invested $ & labour into creating a show garden at the entrance way and out all of the guest windows)
All of the things in this list are things that most of the get-rich-quick newbie hosts or the corporately-owned properties lack the insight or the instincts or the imagination or the commitment to put in place – many of the “gold rush” recent competitors are simply offering decent accommodation and nothing more, whereas experienced hosts understand that many, many guests – given the choice – prefer an experience that makes them feel good and feel valued while they are being provided with a roof over their head.
What a wonderful post that captures the essence of genuine hospitality and the roots of what Airbnb had once aspired to be!
There are reports online that people are booking a lot closer to their stay than they did before. I don’t doubt that data, as COVID made a lot of travelers nervous about committing to travel far ahead of time.
@Spark Same here. My minimum is 3 nights, but I used to get average bookings of 1-2 weeks and booked an average of 3 weeks ahead. This season I have been getting one 3 night booking after another and with only one or a few days notice.
I’ll say again that I wish every host was also an Airbnb guest. This is what I’ve found as someone who books Airbnbs a few times a year:
Airbnb is always a better value for money unless one wants the hotel services like a pool, fitness room, restaurants/bars, breakfast buffett, valet parking.
It’s a lot of work to find a good Airbnb. I haven’t had any bad experiences like some other hosts here have but I spend a lot of time and I generally won’t stay in a new place or a place with less than 4.9 stars. And when one puts in hours and then gets rejected or even canceled, it’s extremely frustrating. I don’t blame Airbnb for “punishing” people who decline guests.
There are plenty of people still offering private rooms and a feel of “live like a local,” exactly like the Airbnb of 12-14 years ago.
Most 4.9+ star places have something missing or in need of maintenance that surprises me and makes me realize that my standards for my own rental don’t need to be so high.
Caveat: I’m usually traveling solo so can choose private room or entire place. Even solo I prefer my own entrance and bathroom but will consider other set ups. Since the pandemic I haven’t been looking for an entire home that can accommodate a group.
What I think Airbnb should have is 3 options for requests. Accept, Decline, and Cancel Request. While it wouldn’t apply to good, responsible guests like you, there are requests where, after a message or two is exchanged, the host finds out the guest wants something you don’t provide, or doesn’t comply with one of your requirements. It’s unfair for the host to have to take a hit on acceptance rate and have the dates blocked when the guest then doesn’t withdraw the request as asked to.
I just had this scenario. Guests sends request, about 7pm, but doesn’t answer the clearly stated, “Please confirm in your Inquiry or Request message that you are vaccinated for Covid, due to the shared nature of this home.”
Okay, some guests don’t, I then have to ask. So it goes.
But this guest didn’t respond to my message. So, when I got up the next morning and saw she still hadn’t responded, now 14 hours after I had sent it, with her pending request blocking my calendar, I message her again, asking her to please respond. She does, saying, no, she isn’t vaxed, that I can “go ahead and decline”. So I ask her to please withdraw the request. She doesn’t. An hour and a half before the request is due to expire, I call Airbnb, and ask them to please cancel the request, as the guest has indicated she doesn’t meet my requirement and I shouldn’t have to take a hit by declining. They do.
But it would be nice to have a “Cancel request” option that hosts could use- only for requests where the guest either isn’t answering host’s questions at all, or indicates that they can’t or won’t follow the House Rules or requirements, which could be verified by looking at the message stream (which Airbnb did when I told them why I was asking them to cancel the request without penalties to me).
If it’s a host wanting to decline because they didn’t keep their calendar up to date, or don’t want to accept newbies, or have a “feeling” about a requesting guest, etc., then sure, it seems fair for the host to take a hit on their stats for declining. But when it’s because the guest is being irresponsible, that request shouldn’t be allowed to block the calendar for 24 hrs, or the host have to take a decline hit.
Also, 24 hrs is way too long for hosts’ calendars to be blocked by an accepted “Awaiting payment” request. 12 hours, at most, seems like plenty enough time for a guest and Airbnb to have a payment be made.
I don’t even understand why Airbnb thinks giving guests 24 hrs to pay is a guest-friendly thing to do, because lots of times those “awaiting payment” requests never get confirmed. Meanwhile the calendar is blocked to other guests, who have their payment info in place and approved. So Airbnb is losing out on their service fee, responsible guests are prevented from booking, and the host misses out on a booking.
Although our guests are now less inclined to book in advance (compared to previous years) duration has not gone down. Our minimum is seven days, and so far Jan - Dec 2023 past bookings and future reservations average is three weeks and median is about four… same as always. Our location is definitely not a resort destination… our guests are rarely looking for a quick break from their daily life: most are people moving here using us a home base while they house hunt and/or job hunt
I can’t wait for the Airbnbust to happen. I’d love to have lower competition. I have enough saved from the good years to ride out the bad economy, but this year looks challenging financially.
Since I didn’t Airbnb before the pandemic, I have no idea how far ina advance people book. I have always enjoyed last minute bookings, and even the same day bookings. But those are not happening right now. My overall strategy of charging high rates at the cost of remaining vacant is not working on 2023. There is too much availability. I also think other hosts are not canceling as much because they can’t find more profitable bookings to replace them. I still have a couple of bookings from cancelled guests in Feb, but those are fewer now.
It’s just not as much fun to host at low rates. But I will continue to build a bank of great reviews to monetize it when the economy turns around.
Without searching the site, it seems to me that people have been expecting this since I joined this forum in 2015. And many of the same other problems (guests asking for discounts, Airbnb policies, “race to the bottom,” too many new hosts who think it’s “easy money”) that are posted now, were posted then.
Luckily I don’t depend on Airbnb income. I can’t imagine the anxiety when things are slow or competition has increased.
Us, either. My day job was business planning for a major corporation and I knew how to do case studies on various business performance scenarios. I made sure we could afford the house even if we weren’t able to rent it out much. “Afford” doesn’t mean it wasn’t a challenge (for instance, we’d have to stop saving to our 401K’s and cut back on a few things), but I knew we’d make it through no matter what.
That said, it’s still not fun to lose the income we’ve become accustomed to getting from renting out our retirement home.
I see the same too. Particularly the ‘easy money’ thing. I keep two apartments full year-round (and for 75% of the year, a further one belonging to a neighbour) because I work at it.
I’ve read about so many hosts who, like the people @muddy quoted, think 'it would fly off the shelf.
They think that all they have to do (with no experience in the hospitality industry) is put up an attractive (and sometimes inaccurate) listing, employ some haphazard cleaners then sit back and let the money roll in.
But as most of us here know, it’s hard work, especially ensuring that your rentals have full occupancy.
An increase in the number of hosts has never bothered me - I know of so many who ‘give Airbnb a try’ without getting permits or licenses and who realise after just a few weeks that this goose doesn’t lay golden eggs.
Plus, Google just told me that there are 10,612 hotels in my area - plus loads of STRs. plus private resorts, plus motels. liveaboards … and I’m not going to worry about them.
Some of those hosts, like the ones I quoted, may have actually put a lot of effort and money into creating a nice space, done a good, accurate description, have good photos and employ good cleaners, they just unfortunately fell for the Airbnb rhetoric, or all those youtube videos, leading them to think it’s a slam dunk to get tons of bookings and make a lot of money, and likely didn’t do much, if any, research into the market in their area, how much competition they have, etc. And maybe their place has nothing about it that makes it stand out from the rest- it’s nice, but looks more or less like 20 other places close to them.
I think it has worked out the best for those of us who started out small (and have maybe kept it that way), renting out a room or suite in our homes, or converting an outbuilding on the property where we live, or a fixer-upper we bought, not putting a ton of money into it that we desperately needed to recoup asap, and who had other sources of income, not expecting to get rich quick. Then, over time, as we got the ins and outs of hosting down, maybe added another property or two, or enlarged what we had, or are quite content to carry on as we have, with no ambitions to expand a hosting portfolio.
As I recall, it took a couple of months after I listed to get my first booking, but I wasn’t at all distraught about it, as I listed in Sept, I think, and tourist season where I live didn’t really kick in until Nov. back in 2016 (It’s busier all year now). And at that point, I had no expectations- my attitude was if my guest room rented, great, if not, it was no big loss, as I hadn’t spent any $ to speak of- it was already a comfy guest room for family and friends when they came to visit.
The first year I didn’t get a lot of bookings, but this season, after closing due to Covid for 2 years, I’ve had almost a full calendar. And I haven’t done anything different since I started, not even changed my crummy photos (I keep meaning to get around to it ). The only difference in terms of my listing is that I now have about 50 great reviews, which of course helps to get booked.