Is The Golden Age of Airbnb Hosts Over?
- Vacation Rental Business
Airbnb Slowing Down 2022
Lately many Airbnb hosts panic over a slowdown what they are facing. Hosts say their bookings have recently stopped and some worry about a summer cliff. They are facing more competition from new hosts, higher costs and the return of global travel. Theories for the slowdown abound. In addition to the belief that worldwide travel growth from the after-pandemic is moving away from domestic travel, some hosts say record gas prices have made guests less willing to book a last minute getaway or even plan for the next summer vacation.
Others, however, believe that Russia’s invasion of Ukraine and the associated economic impact around the world and in the United States, with rising gas and food prices in particular, have increased uncertainty among people worldwide. As a result, people have become more cautious about their spending.
Hosts are also feeling the pain of increased competition. During the pandemic, there has been a record increase in the supply of short-term rental units as more homeowners and investors sought to cash in on demand. This could also be seen in Naples with the rapid increase in demand for homes and the resulting increase in prices in 2021.
This huge increase in supply, which means demand is spreading across more listings, will lead to declining occupancy,” said AirDNA, a short-term rental data company. The analysts of AirDNA expect a normalization of the industry in 2022 which includes both less flexibility as employers bring workers back to the office and a recovery of overseas trips for American travelers. This will more than likely benefit international destinations at the expense of domestic ones.
The Airbnb boom could be heading for a new normal
That increase in supply of vacation rentals is now showing signs of a decline, some hosts say, who complained of lower bookings for 2022. Some even say in Facebook groups that they are thinking about closing their doors because of the dropout.
As bookings have slowed, some hosts worry whether they will be able to make enough money on their houses to cover the cost of the mortgage. Many airbnb hosts struggle to get bookings even for a single night, and thus going so low on their rates that there is no profit left for them.
The drop in bookings is also noticeable for another group of indirect participants: the cleaners who carry out the turnover cleanings. Whereas they used to spend time with their families on weekends, they now have to work weekends, including Sundays, in order to maintain their usual income.
Additional challenges through Airbnb's 2022 Summer Release
Airbnb announced a handful of updates to its platform a couple days ago.
Airbnb CEO Brian Chesky called the changes announced on May 11th “the biggest change to the platform in a decade”, however, the update caused a stir in host forums with some complaining about the new search function.
This update includes some technical changes as well as a new way to search, splitting stays between homes and guest protections.
Judging by some comments on Airbnb host forums, the technical change is the most controversial part of the updates for hosts. Homes in each category go through a curation process. Millions of active listings on Airbnb are evaluated using machine learning to analyze titles, descriptions, photo captions, and guest reviews. So it’s important to make sure your listing info is up to date and complete.
Although some hosts have mentioned that their listing titles have been replaced and no longer show up in the same searches, this change has helped vacation rentals that hadn’t been featured in the past to appear in more searches.
Another concern for hosts is that the home page featuring some of the most beautifully designed, but also most expensive homes, could act as a turn-off for vacationers on more modest budgets.
Confidence despite all challenges
Emily, a homeowner and a newcomer host from Naples sums up her situation as follows. “It was very foolish to be tempted by a trend to enter the complicated field of hospitality and buy a house with a mortgage without any experience, despite the ease of entry into the market. The huge competition and the lack of resources to take care of everything on my own made me decide to leave the management of my vacation rental in experienced hands. For the past two months, she has had her home managed by a local vacation rental management company and can sleep peacefully at night again, she says. The staff of the airbnb management company have relevant experience in dealing with guests and staff for cleaning, lawn and pool maintenance companies. I don’t have to worry about the technical challenges anymore either, Emily reports. The marketing experts at the airbnb management company simply have the technical know-how to optimize my listing so that it can keep up with the competition when ranking on platforms such as Airbnb or VRBO.”
