My guess, not much of one. I imagine numerous units will be hitting the foreclosure market once all the mortgage relief holidays expire. Those that bought units just to rent out for Air BNB are gonna get walloped, especially if the location is heavily dependent on summer travel. I expect travel will take a couple years at the minimum to get back to 2019 levels.
It won’t really hurt the person who has a basement apartment that they rent out but own the entire building. They can always return to the regular rental market or the 3-6 month temporary rental market aimed at recent relocaters.
As an added kick in the teeth, you’d better believe the hotel industry will push for stricter Air BNB laws. Perhaps rigorous cleaning regulations that are much easier for a hotel with a full time housekeeping staff to meet.
For the foreseeable future, I see hotel rates significantly higher than 2019 with a near fatal blow struck to Air BNB for a while. Sure, there may be some introductory hotel teaser rates to spur travel as places reopen. But once life starts to resemble 2019, I don’t expect that to last.
If people still want to rent self-catering accommodation, AirBnB is still going to be the most convenient way of finding it, and people looking to let self-catering accommodation will continue to list it on AirBnB.
So what you’re really asking is, will the contraction in the self-catering short-stay accommodation market be prolonged? And the answer is that it will last as long as travel restrictions and, once they are removed, as long as there is a noticeable reluctance to travel for tourism/recreation purposes.
Well, actually there’s a couple things that could happen.
The supply going forward could tighten up because lenders aren’t willing to give loans to buy properties that are strictly used for Air BNB
The hotel industry could use COVID as an excuse to strangle Air BNB out of the local market in many cities. Air BNB was already a popular target for not just the hotel industry but also anti-gentrification activism, rent control advocates and some environmental activists over tourism activists.
Passing laws about requiring public areas to be cleaned every few hours and daily room cleaning would be a massive burden on Air BnB properties, for example.
I would think I’d be much MORE likely to stay in an Air BNB than a regular hotel post-COVID. Its not like hotels do a good job of cleaning their rooms either, so may as well stay where I am in less proximity to others.
I can see that happening, but at the same time, if they push too hard, at some point they’re going to wind up with tests, instead of just inspections. If a surface test for covid shows up on the market, and health departments (or even customers/journalists), I think it’s going to be more likely to have positive results in hotels that might have a few hundred people in them at any given time than an AirBNB that might rent it out 3 our of 4 weekends a month.
ISTM, that if the hotels/motels want to try and push Air BNBs out of the market, they’d be better off lobbying to get Air BNBs to be treated like hotels/motels. A lot of people, at least the more casual ones, might stop renting out their homes if they have to have health/building/fire/electrical inspections every year. If they have to pay hundreds or thousands of dollars for licenses every year. If they have to carry more insurance. If they risk having their business shut down because a sink isn’t vented properly or they don’t have enough egresses or their fridge isn’t below 41 degrees.
A ‘real’ business has to deal with these things every day and a lot of people that make the jump from side hustle to business get caught off guard by all of that.
I think they were going to go public, but now have postponed that. They also have contracted a lot, cutting out things outside of the core service, and raised a lot of cash. It looks like they fully intend to stick this thing through.
My coworker has a holiday apartment in Italy. He was told that the requirements for handover means 1) thorough cleaning and disinfecting, which will cost approximately 200 euros, and 2) leave the apartment empty for three days afterwards.
With those kind of requirements, he will only rent it out if the people want to stay for a month or longer. Otherwise he will leave it empty, as it’s cheaper.
He’s not with AirBnB, but I could imagine that many places are implementing stricter cleaning requirements.
I own 2 short-term rental condos in a resort town in Montana, and while April and May were a washout due to travel restrictions June, July and August are fully booked up. Some of the bookings are from last year and they never canceled because finding good accommodations during the summer months can be a real challenge. I have the units listed on Airbnb and VRBO.com and the reservations are roughly split 50/50. People still want to travel here and go to Glacier National Park so as long as the park is there there will always be more demand than supply. I believe COVID-19 will only be a blip unless we have a massive second wave that forces us to close down the state again.
I’m not sure I’d single out AirBNB for disaster in the current climate. I think they’re at risk in the same way as any other travel or vacation related company.
But I don’t think they have a specific disadvantage over hotels. As others suggested, they may be more popular than hotels. We’ve used them extensively for vacations, and our most common experience is having free reign over a standalone house or apartment with no physical interaction whatsoever with anyone (typically they offer combination lock instructions for access). It seems likely their cleaning regiment between guests would need to be ramped up significantly but I don’t see how the “clean common areas every few hours” case applies to many of these locations.
When I feel comfortable traveling again I’m definitely not going to be seeking out hotels over standalone houses over this.
And I don’t see the foreclosure thing having a long term impact. The properties still exist. If the market collapses someone will buy them for a steal. And unless people abandon vacations permanently the pressures to serve that market in the future will return.
That’s not to say I’m 100% sure they’ll survive. We’re in unchartered territory, and who knows which companies will be able to push through to the other side. But it’s hard to imagine a world where travel doesn’t come back, even if we’re talking many years away, and in such a world AirBNB, VBRO, or replacement services similar to it clearly service a needed demand.
How would AirBNB be hurt? They don’t own real estate, they don’t have to pay upkeep bills. The supply of free money has temporarily dried up, but when it starts up again, they won’t have actually suffered from it, like hotels do.
Not for 2020. Since your probably travel for pleasure, you don’t think about how many hotel rooms are rented for conventions/business travel. Conventions are cancelling/postponing right up to the end of this year, which means more rooms are empty, which means lower rates.
AirBnB cleaning costs are high already, and if the requirements Die Capacitrix mentions extend to the US, that will raise the effective cost. Hotels have cleaning staff already.
A Times magazine article on work from home profiled a salesman from a high end robot vacuum cleaner company, who sells to hotels. His business has been very good lately. If I was paranoid about cleanliness, I think I’d trust a hotel more, since they have more to lose.
Apartments also. I’ve rented lots of AirBnB properties, some are clearly rented while the owner is away, a few were in apartment complexes with empty apartments, and some have clearly been businesses. Some of which violated the rental agreements of the building.
Of course, a daily room cleaning is actually going to make you more likely to contract a disease if one can be contracted from a contaminated room, since having another person in your room (possibly a different one each day!) gives many more opportunities for that person to shed virus on things.
I agree with others that the existence of COVID makes me more likely to stay in an AirBNB since it’s easier to avoid people.
I expect AirBNB to come through this better than hotels do.
Come election time on the Big Island of Hawaii, big hotel chains contribute large amounts of cash to the candidates. And when those candidates get elected, there is absolutely no correlation between these elected officials passing all kinds of restrictions on the local Vacation Rental owners in order to drive them out of business, forcing visitors to stay in over priced, tiny hotel rooms.
County Officials are simply trying to look out for the tourists that come to the island on vacation. Heaven forbid these visitors stay at a big, beautiful Vacation Rental home with a yard and a full kitchen and large living room. They would hate the fact that they have plenty of free parking and their own private swimming pool. Tourists would much rather stay in a small 600 square foot box of a room where they can share both both walls and the ceiling with other guests who come back in all hours of the night. They love having a kitchenette with just enough refrigerator space for a 6 pack of soda.