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Business in Palm Springs Dropping Like a Rock


#1

We’ve been sucessful hosts in Palm Springs for the last two years. Business is dropping through the roof. Bookings are down significantly since the end of the summer despite our prices being a full 30% less than last year. Anyone else have a similar experience?

The amount of room supply with new hosts and new hotels is exploding which I think is likely the cause.


#3

In the last week or so, nobody has even LOOKED at our listing, according to the Dashboard. We’re in Toronto and have lots of local competition. On top of that, although our location is actually quite good, I have no idea how anybody from outside Toronto would know that - there are many other much better known neighbourhoods. Whatever, we were booked solid from July to the end of October.


#5

Low request rate may be due to airbnbs new policy of listing ALL instant book accounts before those of us, however fauthful-hosts who are not in the position to accept any random booking without first reading guests profile.
Send a complaint email on this unfair policy!


#6

When a Canadian complains that his wife is frigid, he may not mean what you think he does… :wink:

Anyway, our listing is alive and well, and sorts out near the top if you’re looking in our neighbourhood. And that’s without Superhost or Instant Book. I haven’t checked out the competition to see how they’re doing. AirBnB rarely gets mentioned in the press, and mainly only in conjunction with articles about Uber, which is getting tons of coverage at the moment. The existing legit cab drivers are pulling all kinds of stupid stunts that are just driving new customers to Uber. They decided to shut down all the traffic in the city a couple of days ago. Marvellous generator of good will - for Uber.


#7

Hahaha…one of my supervisors back in the day when I was a teenager was pissed because I wouldn’t sleep with him - so my new name was Frigid Bridget. I imagine he is still single. Maybe I will have to internet stalk him but I just can’t remember his last name! - such a loser.


#8

Ha ha Billy B. I agree, the pricing tool is simply another way to reem hapless hosts–under the guise of “suggesting” or “analyzing” proper prices, we will force EVERYONE to lower them or go to the back of the bus. Its true purpose is a stick up of sellers (as is the ‘instant book’ b.s.); like ebay and other online selling sites, what started as even handed treatment of buyers and sellers has swung to favoring buyers far more as the business matures and a ready supply of product is assured.

We ran from that other site when their extortionate demands for payment of “subscription fees” became utterly obnoxious–another example of blowing up a traditional model by decoupling the partnership aspect of the enterprise (we both win when you book) to: pay up, sucker–and pay more than the other schmuck next to you–or else.

Again I think this is the inevitable result when every T,D, and H crashes in to a business with almost no barriers to entry.


#9

I’m not sure that’s true. The prices of our local competition have been pretty much static since we opened in July. In the summer, the pricing tool kept telling us we were too cheap - now it keeps telling us we’re too expensive. But like I say, the prices of our local competition haven’t budged. So I’ve just ignored the recommendations. We’re in a bit of an odd pricing bracket: we have two rooms that we rent as a unit, with a semi-private bathroom. So we’re better than most one-room rentals, but not as good as complete apartments. It makes it fairly easy to look at the competition and see where we sit, but seems to befuddle the pricing tool completely.


#10

I can’t speak to what is happening in Canada but out here here prices are clearly falling during our highest season and I don’t think it’s coincidence that the drop coincides with the roll out of the “pricing tool.”


#11

I noticed the same here in South Florida, prices reached summer rates. They started to go up during October when I became super busy suddenly , lasted through November and then after Thanksgiving started to drop. Airbnb suggested prices are half of what I am charging, it’s not even funny anymore. One day I had suggested price of 32$.


#12

At least you are booking through another site. I noticed also that 80% of my bookings come from booking.com. The last 2 weeks I didn’t have a single booking with Airbnb


#13

Elithabeth, I am on IB, and it doesn’t help me a bit to get bookings. This weekend I was the only one in a whole county under 100$ on IB, and still I didn’t get booked. If it’s slow, it’s slow, IB or no IB, it doesn’t matter if no one needs accommodation.


#15

But you do that and Airbnb buries you, Billy. That’s my point.


#17

Therein lies the rub— when every T,D and H opens an Air, the supply goes up, the bookings go down and the host profits decrease. Think about it. Everyone’s got an Airbnb now, just like everyone has a gmail address. The market is flooded. Economics 101.


#18

I pay no attention to their pricing tools. They know nothing about my area, my high and low seasons, my location (rural so forced into a lower price) or anything else. I’ve had basically the same pricing for five years. Even though my costs jump every single year. And there’s a point at which I don’t drop any further. Not worth my time and energy to give away what I have to sell.

Agree with everything you say here William!


#20

It’s very true… And part of the business is rolling with the ups and downs. I saw the unknowns of renting on Air from day one. I weighed renting out my studio long term versus renting it on Air…and looking at my numbers, I always came out ahead on Air, and didn’t have the hassles of the long-term tenant… Even though that is supposedly “steady” money… it cannot equate it to what I can get on Air. It’s lower impact, and they are mostly out sightseeing all day. So I roll with it. If I have good months (December-January-February-March) I put some cash away for the slow times. I lower it in the summer and sometimes bookings come in. Sometimes they don’t.

When I moved to Hawaii 23 years ago, I left a steady, good-paying job in an advertising agency for the unknowns of island living. I was fortunate to find work with the only ad agency here, and they were lucky to find me, as I was really the only bona fide copywriter on the island. For 18 years, our clients and work held steady… until the recession… then I had to punt.

It’s common knowledge that to live in Hawaii you need 17 jobs, and as a freelancer, I’m used to hustling business. I bought my house with a down payment I earned from being an accidental sales rep (I’m a writer, not a salesperson!) and making a huge sale to the state of Hawaii. I hung on to my house through improper foreclosure (the bank agreed to modify, then started to foreclose during the negotiations --called dual tracking-- and which is now illegal). I crawled out of the pit of foreclosure and got my loan modified by the grace of god. Because modifying was the last thing the banks want to do. The loan servicers are compensated highly for every foreclosure they bring in. They will try every dastardly, illegal thing to grab your house, and you really just don’t have a chance. They can and do LIE and cheat. I saw it firsthand. Most people surrender to foreclosure, most of which have cleared the courts with photoshopped documents and forged signatures. Homeowners just give up and don’t fight. I did.

I’ve learned how to do a lot of my own maintenance. I can paint, fix ovens, climb on my roof, patch decks, fix leaks, wield a weedwhacker and brandish a chainsaw. Cut down 30-foot panex hedges. Find financing to do major remodels and repairs. And much more. Oh, and did I mention all on a single income with twin boys at university. And not a penny of help from their worthless fail of a dad who walked away from them when they were 16 and 17. But renting out was not enough. When I saw the handwriting on the wall during the recession, I was not about to go work at Chevron or Target. To fill in the gaps, I got my substitute teaching certificate and I teach at our public schools, PreK -12, and special ed. Being a sub, especially at high school, is not for the faint of heart. :slight_smile:

Yup, multiple baskets here already. I got this. :smile:


#21

I’ve gotten mixed results from the same kind of testing. It’s subtle but it does appear to me that they favor people who fall in line with the tool.

There’s a chicken/egg thing going on here. Is it that the tool simply reflects the lessening demand/falling prices/higher supply or is it that the tool is being used itself to force lower prices. After all, the marginal difference to airbnb from reducing a nightly price from, say, $100 to $80 is minimal. They want the bookings–they want high volume and they want to drive people to the site generally. The marginal difference to a host is far more significant.


#23

I don’t disagree at all. We have used other sites; airbnb fit best with our prior business model (young, hip, So Cal locals looking for a short getaway and willing to pay a premium). We’re changing the model and finding sites better suited to older renters and professionals looking for longer term. The 2 day getaway market is getting totally commoditized and that may not be good for airbnb.


#24

I will never do Instant Book. I know some people love it. There is some speculation that Air may eventually move to an all IB format and we will never have a choice left. … Does anyone else think so?


#25

They are already moving in that direction by allowing people to limit to searches to IB. I doubt they will ever “formally” do it. But the direction of the various “improvements” they’ve introduced over the last two years is clear: screw the host and bendover for guests.


#26

Did you have an impression that I am listening to their price suggestions? Because I am not, as they are plain silly. At times it’s half less of my rate and at times even more.

I lower my prices according to hotels as I am on Booking. Com also. Diplomat Trump hotel was listed over weekend for 150$ a night. Originally I priced my room at 90$ but then I saw 4-5 * hotel prices in my area and they were just a bit over 100$. How can I possibly get rented for 90$, if 4* hotel beach front goes for 110$??. Who in their right mind would rent a room in someone’s house with " owners present in a house through out guest’s stay" , with no pool, any other amenities, and now even use of kitchen for almost the same price as 4* hotel?

I am not new to running a business, I calculate very well. I spend half an hour to clean and change bed. Even if I make 50$ for that, it’s not that bad for an hourly pay.
I may be don’t know much about hospitality business but I am sure Trump’s people know what they are doing. And I am watching them closely.


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