Airbnb Revenue Collapse Sparks Housing Market Crash Fears

[hegemony]

 

 

Airbnb Revenue Collapse Sparks Housing Market Crash Fears

 

 

via the bird thingy:

 

[CreditSucksNot]

I have read multiple articles an the AirBnB problem(s) and I think they were preventable and a long time coming.  When it started AirBnB was a great alternative for travelers looking for something more reasonable in price and location than major hotels with resort and parking fees along with high taxes.  A LOT of people in major markets (Vegas is one) bought dozens of properties for short term rentals then scamdemic hit with the shutdown and they struggled to hang on.  Absent high booking rates they couldn't pay the mortgage(s).  Those that survived the shutdown then faced communities tired of the out of control parties and the regulations and laws started clamping down.  Next came the AirBnB fees, excessive cleaning charges and fines along with a draconian list of "rules" before you even walk through the door have pushed consumers to realize that hotels have more amenities and are less cumbersome for a quick trip out of town.

 

Too many over invested in real estate as a get rich quick scheme through short term rentals.  Between state/local regulation and HOA backlash combined with instituting rental policies that drove consumers away they are now in financial distress.  However, I seriously doubt a housing crash is coming in the major markets.  Demand for housing far exceeds supply and there has long been a cry that selling homes to short term rental investors is depriving the middle class the opportunity to own a home.  Short term rental owners having to sell due to no longer being viable will simply infuse a sales market with properties that are very much wanted.  The ones hurt will be those sellers who will not reap the equity profit other sellers have seen in the past 2 years because sale prices may come down as supply equals or exceeds demand.

[hegemony]

I have never seen the draw to stay at one. When I am on vacation I like having amenities as well as not having to empty garbage cans when I check out.

[Burgerwars]

I'm glad I'm not the only one who has had no inclination to stay at an Airbnb. When I book a room at the Hilton, I generally know what to expect. Location, amenities, privacy, cleanliness, and so on.  I read once where someone booked an Airbnb and found a property with multiple guests within the same rooms, where the owner put up curtains as partitions. I'm not going to gamble on a vacation to deal with that. As far as traveling for work, my employer pays for a hotel room, and it doesn't have to be a hotel in the 'hood. I get no bonus points from my employer for staying at an Airbnb. As far as renting out my own home as an Airbnb, forget that. There are over a hundred reasons I wouldn't want strangers in my house.  

[hegemony]

6 minutes ago, Burgerwars said:

I'm glad I'm not the only one who has had no inclination to stay at an Airbnb. When I book a room at the Hilton, I generally know what to expect. Location, amenities, privacy, cleanliness, and so on.  I read once where someone booked an Airbnb and found a property with multiple guests within the same rooms, where the owner put up curtains as partitions. I'm not going to gamble on a vacation to deal with that. As far as traveling for work, my employer pays for a hotel room, and it doesn't have to be a hotel in the 'hood. I get no bonus points from my employer for staying at an Airbnb. As far as renting out my own home as an Airbnb, forget that. There are over a hundred reasons I wouldn't want strangers in my house.  

my sister stays at airbnbs and one recent location made her do laundry and basically wash the entire kitchen and bathroom as part of the "check out" process. SMH

[TheVig]

When I go vacation, that’s exactly what I want to do. I’m not interested in doing house chores. 
 

If I accidentally spill my coffee at Hyatt or wherever, it’s no big deal. Airbnb fookers however expect you to pony up and re-carpet the whole house. 
 

Again, it’s called vacation, not remote house work. 
 

Not related to the topic, the housekeeper lady at the hotel I’m at this week is a hottie. If I wasn’t blissfully married, I’d teach her English pro-bono. 

[CreditSucksNot]

9 hours ago, hegemony said:

my sister stays at airbnbs and one recent location made her do laundry and basically wash the entire kitchen and bathroom as part of the "check out" process. SMH

 

That has been a major contributor to the fall off in bookings.  Hosts started instituting cleaning fees of $75 up to $500 even for a one night stay while still expecting guests to do a long list of chores prior to checking out.  Draconian and idiotic rules about using trash cans, stripping bed(s) washing the sheets and remaking prior to leaving, and not wearing shoes in the home are just a few.  I can stay home and do that for free.  Guests biggest complaint is why they are charged a huge cleaning fee (even for a 1 night stay) and still expected to do the cleaning themselves.  It has since been corrected but until it was you booked and THEN saw the rules but you couldn't cancel if you didn't agree without forfeiting the deposit or rental fee.  

[shifter]

Uh let's not forget the elephant in the room. 

 

Comparing YOY Rev with 2022 when people were fresh out of being cooped up in the houses for 2 years with people they don't event like is a joke. 

 

This year everybody is going to Europe again. Over the next few years things will settle out. Of course if you are overleveraged you might suffer in the meantime. But that's your own fault. 

[hegemony]

11 hours ago, shifter said:

Uh let's not forget the elephant in the room. 

 

Comparing YOY Rev with 2022 when people were fresh out of being cooped up in the houses for 2 years with people they don't event like is a joke. 

 

 

point taken but was 2022 that much higher/lower than 2019?

 

 

[StarkRaven$]

I have never stayed at one but my neighbor told me while staying at one in Delaware, eviction papers were served for the owners.

 

Just returned from a marvelous stay at the Hampton Inn. Pricey but completely worth it.

[swimmingwithsharks]

On 6/29/2023 at 3:48 PM, StarkRaven$ said:

I have never stayed at one but my neighbor told me while staying at one in Delaware, eviction papers were served for the owners.

 

Just returned from a marvelous stay at the Hampton Inn. Pricey but completely worth it.

Years ago, I never understood why the Hampton Inn always priced higher than the "supposedly similar level" Holiday Inn Express and the Fairfield Inn at the same exit off the highway. I have stayed at all of them. Now that I am older, I totally get it - the Hampton Inn price is just high enough to get the partiers/ troublemakers/ cool kids to stay somewhere else. And I find I like that. I suspect Hyatt Place might be similar in pricing discretion, but there just aren't as many of those locations worldwide compared to the Hampton Inn. 

 

I do not understand the appeal of AirBnB. Totally unpredictable, unreliable, inconsistent and potpourri (sort of like Doubletree locations - some are good, some are bad, some are best avoided; you just don't know until you get there). It would be different if AirBnB had strict brand standards, consistent expectations for all units, and if the house owners were franchisees who had to adhere to contractual standards (like hotel franchisees) - but basically AirBnB just eliminated all of the good from the corporate hotel experience.

 

Getting some of these AirBnB homes on the market to be purchased by people who want to live in them year-round will be helpful to stabilize neighborhoods and bring prices in line with what the homebuyer market can bear, not the investor-speculator market.

[hdporter]

On 6/28/2023 at 11:22 AM, hegemony said:

I have never seen the draw to stay at one. When I am on vacation I like having amenities as well as not having to empty garbage cans when I check out.

 

I've never stayed at an Airbnb, but I certainly see the appeal of renting a small home for the sake of a full kitchen, laundry, living room and a couple of bedrooms for 4-7 nights at a fraction of a price a comparable hotel suite might command (assuming one were available in the desired venue, which often is not the case).  We rented a few such homes prior to our purchase of a timeshare/exchange property in 1997.

 

That an outfit such as Airbnb would come along and successfully offer marketing services to such private offerings is no mystery.  That Airbnb owners would subsequently be emboldened to impose draconian upkeep mandates on guests is one. 

 

On an extended stay, I have no problem with a request that dishes be loaded into the dishwasher and for other light housekeeping.  I suspect that the recent influx of guest complaints arises from "investor" properties who had no prior experience with guest management and targeted policies to those which were intended to minimize upkeep rather than maximize guest satisfaction.

 

 

[StarkRaven$]

15 hours ago, swimmingwithsharks said:

Years ago, I never understood why the Hampton Inn always priced higher than the "supposedly similar level" Holiday Inn Express and the Fairfield Inn at the same exit off the highway. I have stayed at all of them. Now that I am older, I totally get it - the Hampton Inn price is just high enough to get the partiers/ troublemakers/ cool kids to stay somewhere else. And I find I like that. I suspect Hyatt Place might be similar in pricing discretion, but there just aren't as many of those locations worldwide compared to the Hampton Inn. 

 

I do not understand the appeal of AirBnB. Totally unpredictable, unreliable, inconsistent and potpourri (sort of like Doubletree locations - some are good, some are bad, some are best avoided; you just don't know until you get there). It would be different if AirBnB had strict brand standards, consistent expectations for all units, and if the house owners were franchisees who had to adhere to contractual standards (like hotel franchisees) - but basically AirBnB just eliminated all of the good from the corporate hotel experience.

 

Getting some of these AirBnB homes on the market to be purchased by people who want to live in them year-round will be helpful to stabilize neighborhoods and bring prices in line with what the homebuyer market can bear, not the investor-speculator market.

Where my brother lives in CO, he is the only full time resident in the building. The condo unit next door to him rents for $1K a night. As soon as the unit becomes vacant, a cleaning crew shows up.

[supern8ural]

I don't hate AirBnB, my ex and I used to do it because she was renting a big house and several housemates moved out.  It was a fun way to meet interesting people and not have to move.  But people started treating it like a business and everything went to heck.

 

I personally wouldn't mind a little correction because I get the impression that a lot of purchases are either by companies or individuals not to live in but to rent, and it's artificially driving up prices.  Being a non home moaner, I was really hoping to buy within the next year but the high prices combined with interest rates are making it hard.  I'll consult a realtor anyway once I have a little more savings together, but I'm not optimistic.

[hdporter]

48 minutes ago, supern8ural said:

Being a non home moaner, I was really hoping to buy within the next year but the high prices combined with interest rates are making it hard.  I'll consult a realtor anyway once I have a little more savings together, but I'm not optimistic.

 

First time I've come upon that bit of humor .  I empathize quite a bit.  When Bev and I bought in for the first time, rates were pushing 9%+.  But the saving grace was that such rates put a considerable damper on the market.  The current situation, where demand is outstripping supply, is off the charts.

 

I don't think fallout from the Airbnb situation, or any other circumstance are going to depress broad pricing any time soon.  Instead, I just look for prices to stagnate for 5 years or longer.  Still, I pray that rates retreat soon so that financing a home is once again palatable.

[supern8ural]

Definitely there are ups and downs to owning a home... I owned a place for a couple years back in the 2000s and it's definitely a good thing I knew which end of a screwdriver or pipe wrench to hold!

[Why Chat]

The vacation rental market has destroyed once peaceful neighborhoods and changed the real estate market into  an uneven horserace where HOME buyers are outpriced by  inflated offers.  Now that the vacation rental market has slowed those same houses will slide into foreclosure as the income from vacation rentals dries up.

[PhoenixDown]

I am an avid skier and AirBnB has been a good option in a lot of places that don't have nearby hotels/resorts or the nearby hotels and resorts are prohibitively expensive! A good number of these places are single family homes where someone is renting out a room or a floor. I'm barely there and I generally get a kitchen to enjoy a quick breakfast before spending the rest of the day on the slopes and eat dinner out.   While this is great for me, this has been harmful for seasonal workers at these same mountains looking for an affordable place to stay. Outside of skiing, AirBnb allowed me to stay in places that would have otherwise cost 2x - 3x the price. 

 

That said AirBnb left me with a sour taste from the pandemic. While my host was graceious enough to allow me to cancel my reservation (and I made up for it when travel was allowed again) many guests and an equal number of hosts were impacted because AirBnB wouldn't make any exceptions to pre-existing reservations. 

 

--- With all that said, the issue is bigger than just AirBnb. 

 

NYC for example has all these fancy luxery high rises being built and you need to have $$$$ to afford to rent or buy one. Many get purchased by celebraties who barely even stay there or by overseas tycoons who are using it as a way to park/hide money. All of this takes away affordable housing from the middle and lower class.  Vancouver does this right. If your are not a full time resident, you can't own property. I am sure people still milk the system but I hear that overall it has worked to keep things in check. Perhaps a return to that would mean a return to AirBnB's original concept of subletting a room or a floor to help honest homeowners a means to make ends meet.