Have short-term rentals run their course?
Wednesday, August 16, 2023
Short-term rentals such as Airbnb and VRBO skyrocketed in popularity in the 2010s, promising lodgers unique experiences that make them feel like a local instead of a tourist while traveling. These options became a great alternative to hotels during the COVID-19 pandemic in 2020 by allowing guests to avoid large crowds and encouraging remote workers to partake in "staycations."
However on May 9, 2023, Airbnb Inc. shares posted their biggest-ever decline after the vacation home-rental company gave a cautious outlook for revenue, suggesting that rising prices and a shaky economy are beginning to impact consumer's appetites for trips.
Hosts are also complaining of low bookings as Airbnb occupancy rates fell in 31 of the top 50 largest U.S. short-term rental markets from July through September of 2022, according to AirDNA. In August of 2022, AirDNA reported that markets where supply had grown by more than 50% had an average occupancy decline of over 10% and saw revenues drop by 8%.
Customers still consider rentals while traveling, but not without complaints. Rising cleaning and service fees, along with growing lists of "chores" for guests to complete before they leave the property, are causing individuals to reconsider if a rental is really worth it, or if they should go back to staying in hotels.
In a viral tweet garnering over 50,000 likes, Amy Dixon claimed that the "Airbnbust is upon us," with users echoing her claim by detailing a significant increase in prices.
Include Fees in Your Travel Budget
It's common for a listing to appear like the cheaper option while searching for a stay, but most properties won't mention the $200 cleaning fee, $250 service fee and $200 taxes and fees on top of the $300-a-night stay until the customer gets to the checkout page.
On top of the extra fees, guests are typically asked to take out the trash, strip the linens on their bed and wipe down kitchen counters before they leave—something they don't have to worry about while staying in a hotel. Guests have also mentioned being paranoid that hosts are watching them from cameras posted outside the property and have to deal with the looming possibility that the host will cancel on them leading up to their stay.
In October of 2022, Buzzfeed News, asked its community members to share all the reasons why they've stepped away from booking Airbnbs. Commenters flooded the replies with gripes and concerns about the rental service. "Airbnb hosts have gotten so ridiculous with their pricing and expectations, we may as well stay home," commented @morganleslay. "The last one we went to wanted an additional $5 per person for hot tub use and they had cameras in the back."
Some Hope For Vacationers
It appears Airbnb has gotten wind of these growing complaints, as they released over 50 new features to their site at the beginning of May, including the "Airbnb Rooms" feature, discounts on stays longer than three months and the option to opt-in to a payment plan, paying interest-free installments over the course of six weeks.
"With Airbnb Rooms, we're getting back to the idea that started it all – back to our founding ethos of sharing," said Brian Chesky, Airbnb co-founder and CEO in a press release. "Airbnb Rooms are often more affordable than hotels and they're the most authentic way to experience a city. This is the soul of Airbnb."
With the busy summer travel season approaching, only time will tell if this revamp helps sway travelers to book a rental property, or if hotels will continue to make up ground against them.
Airbnb Rental or Hotel?
A lot goes into a traveler's choice of lodging. Beyond location and price, the duration of a stay will help determine whether they opt for a short-term rental or a long-term commitment. While contemplating your next vacation, here are some pros and cons to consider for your next accommodations:
Pros of a Rental
Pros of a Hotel
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