Short Term Rentals Slowing Down due to Negative Media Coverage??
Real Estate Agent · San Antonio, TX · Member since 2017 · 523 posts · 362 votes
I'm not sure if everyone is on Twitter or Facebook, but there's been a pretty noticeable movement (usually among among millenials / Gen Z) to bash Airbnb / short term rentals. Everything from "creeper" landlords, to "Karen" house rules, and "people ruining communities with STR" have been going viral on these platforms.
This is pretty new and unusual to me, and I've seen an uptic in these posts the last couple of months, along with complaints on the "crazy" fees. These posts are usually getting thousands of reshares and thousands of comments, and I'm genuinely surpised that this many people are not fond of short term rental companies.
Are any of ya'll seeing this as well? I'm genuinely curious if it's just happening to pop up on my feeds, or if this is a serious "movement" for lack of a better term. Have any of you noticed a slowing of business on Airbnb or increase in difficult customers? Would love to hear from those actually involved in the business or management, not just keyboard warriors on social media.
The conspiracy theorist in me thinks that the hotels may be behind this, especially given the recent exposing of how honest social media sites have been *complete sarcasm* but that's a whole seperate topic.
The younger and lefter folks tend to be on the side of 'STRs are bad because the regular people can't find a house thing'...
I think the other 90% likes the new lodging trend of STRs (vs Hotels) so much that they will thrive....
Just my .02
Where are you seeing this? I'm in NE Florida and we don't have a problem with the incoming flow of visitors and future residents. I am guessing that it must be specific to your local market.
Yeah, there are plenty of videos and other media out there discussing the bad STR owners. I think it will ultimately result in regulations that harm the industry...all because a few bad apples took advantage of the lack of oversight. It'll start local, but it will grow to the state level at some point.
The younger and lefter folks tend to be on the side of 'STRs are bad because the regular people can't find a house thing'...
I think the other 90% likes the new lodging trend of STRs (vs Hotels) so much that they will thrive....
Just my .02
Yeah, I don't rent to those folks much. I get older folks with families. People who work for a livin'.
I agree with @Bruce Woodruff. So many of these kids are so left leaning they think that everything should be free and please take care of meeeeee.
Once they get some mileage on them, that usually changes and they rent our house. :)
Yes, Airbnb's stock price has plummeted and guests are leaving the platform for hotels due to the "hidden fees" by Airbnb so with the winter release they had to do something to cater to both the host and the guest. The guest gets to see the total price while the host can now easily remove unfavorable reviews. Airbnb's algorithm took a major change and a lot of vacancies started to happen across the board. I personally took advantage of it and started running Google ads toward Airbnb's SEO to get direct bookings. Airbnb taking the brunt hit is actually a good thing for STR operators.
We have to start keeping short-term rentals separate from Airbnb. Airbnb is just a listing platform. If true STR operators wanted to protect short-term rentals they would be building a brand where customers can book direct. Just use Airbnb as a lead generation tool.
Yeah, I don't rent to those folks much. I get older folks with families. People who work for a livin'.
I agree with @Bruce Woodruff. So many of these kids are so left leaning they think that everything should be free and please take care of meeeeee.
Once they get some mileage on them, that usually changes and they rent our house. :)
Exactly. I actually try to weed out Millenials/Z's and not rent to them at all. Always a problem or an issue...I don't need any money that bad.....
I too am renting to families going on vacation so I've experienced no negative impact.
I rent to the older population or families of. I only have 1 of my 4 rentals on airbnb, so no impact on my rentals. I am receiving more direct bookings.
We have to start keeping short-term rentals separate from Airbnb. Airbnb is just a listing platform. If true STR operators wanted to protect short-term rentals they would be building a brand where customers can book direct. Just use Airbnb as a lead generation tool.
Thanks for the wisdom on this point, Myka. As someone considering whether to do STR, MTR, or LTR on my first investment property (rehab with biz partner about halfway done), I've heard some scuttle from BP podcasts (mostly On The Market) about differentiating your brand from the AirBNB platform mainstream. For example: https://www.biggerpockets.com/...
Also, to keep doing free advertising for BP podcasts, here's an episode of the main pod that I listened to today. Good content about how to position yourself to survive the STR shakedown that will fold up less experienced/professional operators: https://www.biggerpockets.com/...
Easy for me to praise the insights before actually having to practice them, but the advice to capitalize on 1) Amenities (pools, hot tubs, game rooms, even pianos), 2) Uniqueness (themed houses, unique rooms, etc.), and 3) High host ratings certainly makes sense.
Finally, here's a link to the guest's company website, from the episode immediately above: https://www.airdna.co/
Looks like some good free tools to estimate STR income potential city by city, and options to buy more comprehensive predictive data.
Yes, Airbnb's stock price has plummeted and guests are leaving the platform for hotels due to the "hidden fees" by Airbnb so with the winter release they had to do something to cater to both the host and the guest. The guest gets to see the total price while the host can now easily remove unfavorable reviews. Airbnb's algorithm took a major change and a lot of vacancies started to happen across the board. I personally took advantage of it and started running Google ads toward Airbnb's SEO to get direct bookings. Airbnb taking the brunt hit is actually a good thing for STR operators.
We have to start keeping short-term rentals separate from Airbnb. Airbnb is just a listing platform. If true STR operators wanted to protect short-term rentals they would be building a brand where customers can book direct. Just use Airbnb as a lead generation tool.
In our market, supply has outpaced demand over the past year. Demand is also trending down right now due to normal seasonality during winter months. Prices and occupancy are falling fast as a result. I agree with Dave that the better operators will survive the crunch, and those who can't will go back to LTR. Normal market forces doing their thing.
Yes, Airbnb's stock price has plummeted and guests are leaving the platform for hotels due to the "hidden fees" by Airbnb so with the winter release they had to do something to cater to both the host and the guest. The guest gets to see the total price while the host can now easily remove unfavorable reviews. Airbnb's algorithm took a major change and a lot of vacancies started to happen across the board. I personally took advantage of it and started running Google ads toward Airbnb's SEO to get direct bookings. Airbnb taking the brunt hit is actually a good thing for STR operators.
We have to start keeping short-term rentals separate from Airbnb. Airbnb is just a listing platform. If true STR operators wanted to protect short-term rentals they would be building a brand where customers can book direct. Just use Airbnb as a lead generation tool.
I didn't say demand was down.
Yes, Airbnb's stock price has plummeted and guests are leaving the platform for hotels due to the "hidden fees" by Airbnb so with the winter release they had to do something to cater to both the host and the guest. The guest gets to see the total price while the host can now easily remove unfavorable reviews. Airbnb's algorithm took a major change and a lot of vacancies started to happen across the board. I personally took advantage of it and started running Google ads toward Airbnb's SEO to get direct bookings. Airbnb taking the brunt hit is actually a good thing for STR operators.
We have to start keeping short-term rentals separate from Airbnb. Airbnb is just a listing platform. If true STR operators wanted to protect short-term rentals they would be building a brand where customers can book direct. Just use Airbnb as a lead generation tool.
I didn't say demand was down.
Yes, Airbnb's stock price has plummeted and guests are leaving the platform for hotels due to the "hidden fees" by Airbnb so with the winter release they had to do something to cater to both the host and the guest. The guest gets to see the total price while the host can now easily remove unfavorable reviews. Airbnb's algorithm took a major change and a lot of vacancies started to happen across the board. I personally took advantage of it and started running Google ads toward Airbnb's SEO to get direct bookings. Airbnb taking the brunt hit is actually a good thing for STR operators.
We have to start keeping short-term rentals separate from Airbnb. Airbnb is just a listing platform. If true STR operators wanted to protect short-term rentals they would be building a brand where customers can book direct. Just use Airbnb as a lead generation tool.
I didn't say demand was down.
Hey @Myka Artis, do you have evidence that guest are leaving the platform? I haven't been able to find any AirBNB provided data.
Hey @Myka Artis, do you have evidence that guest are leaving the platform? I haven't been able to find any AirBNB provided data.
I'm not sure Airbnb would provide that data. You have to watch Airbnb's money moves. Three years ago when they refunded all guests during the pandemic they didn't provide data that said hey we're refunding the guests for business longevity. They knew they had to do it. Airbnb is a billion-dollar corporation with people way smarter than me on their team. If there are blog posts in the millions on the internet of guests not being happy about hidden fees and Airbnb's stock price is plummeting (which is public data) and their next release is to show the total price that's a pretty good indicator that they are pushing to get the guests back. Then after the winter release, all of the blogs turn to Airbnb hosts having major vacancies. It was clear as day that guests are leaving. I've never seen more hosts dip prices during holiday travel last month while demand was high. Sophisticated hosts started leaving Airbnb during the pandemic. The winter release had to satisfy both parties that's why they chose to show the guest the total price and allow hosts to remove unfavorable reviews in a much easier fashion. BP has had some of the biggest disruptors for direct bookings on their podcast. I've used their tactics and I've never seen this much of a direct booking spike in my years of hosting. There is no way people were willing to pay 20% more on VRBO last month in record fashion when those same properties were readily available and cheaper on Airbnb.
I can give you the steps to an A/B test as well. Put your logo in your photos for one of your listings and see how many direct booking inquiries you get.
The STR boom reminds me of the boom I saw with marijuana dispensaries when it became legal in my state. So many ragtag operators popped up overnight to cash in on high demand and almost no supply. Most looked like 16 year old boys started them - terrible location, pitiful neon green logos and branding, etc. I'm not a consumer, but I'm sure the service wasn't great either. I bet they made money for a few years. But fast forward to now and there are a few market leaders who clearly know what they are doing, and the long tail of poor quality operators are shutting down bc they can't compete. It's literally a page out of an economics textbook
Sure, SFR STRs aren't "new", but the OTAs made them mainstream and demand has skyrocketed to levels unheard of before. It's basically a new industry … heck, in many places it really is
if you think about it, buying a house is the closest thing to buying a business that the average person will experience, and given the fact that so many of us have gone through the process of doing it for ourselves, the process is even more demystified. That, plus the fact that the OTAs essentially created a model where owning a single hotel room makes business sense means barriers to entry in the STR space are INSANELY LOW. It's anrguably easier than starting a bad dispensary. So supply has skyrocketed. And guests aren't too impressed with the average STR.. because .. well .. the consumer experience sucks (we've all seen these listings)
but supply will continue to increase further. BP reaches a HUGE audience. The cohost is literally an STR guru. This influences investors at an enormous scale. Plus yields on LTRs are pitiful right now … who in their right mind wouldn't choose STR in this environment? Who cares if yields on these riskier assets resemble LTR yields several years ago … it's the best option we have
So more supply is on the way while demand is normalizing post-covid, bringing revenues down
And yet more headwinds are on the way. another threat is an emerging class of better designed group hospitality assets. It will take some time for these all to come online, but these properties are designed with the end consumer in mind and will no doubt outperform the average STR. Ideally, many of us will be building and buying these (some already have), but many larger businesses/ hotels will be playing in this space as well. Branding and large portfolios will offer a remedy to all of the guest complaints you hear today - no more inconsistency in amenities or service, and certainly no more hosts asking you to "start the dishes when you leave and put the linens in the laundry room". Don't overlook this - big developers can add a TON of supply in a very short period of time, and can rent at a higher $psf making that a sound investment on their end. There is just no reason the average STR will be able to truly compete here. It would be like if all the restaurants in town were just random people serving mediocre food in their living rooms, but then one day a bunch of real restaurants opened on Main Street. Where would you choose to eat?
And then … a (significant) recession hits and demand truly falls off a cliff. Not the kind where people have to say things like “we’re technically in a recession” .. a real one where tons of people are getting laid off and cutting back hard on discretionary (travel) spending. Who will be left standing when the dust settles? Will make an interesting case study (and probably bring down home values in several cities along the way)
Long-winded way of saying there are many other drivers of the declining revenues we’re seeing. I’m sure some talking heads on the left turned off a few guests, but the elephant in the room is increasing supply
… and we’re all to blame 😉
STR demand is up 20% compared to a year ago. But everyone is doing short term rentals now so inventory has about doubled the last couple years.
@Sean Bramble great narrative. So where else do you invest if ltr and str is worrysome?
The anti AirBnb media buzz has been going on for at least a year. I stay off the media as much as humanly possible so the narrative doesn’t really effect me.
my STR is also my vacation home, and it caters to family's and couple that want an intimate mountain getaway. These types of guests stay at my cabin because they DO want cleaning fees. They want their own space with own amenities, all clean upon arrival. They don't want to cram in a hotel.
It's a shame that these bad STR owners have given the entire industry such a bad name. They should be held accountable for their actions, but unfortunately, it's not just them who are suffering the consequences. The whole short-term rental community may pay the price in the form of more regulations that do more harm than good. It's a difficult situation to navigate and one that will require careful consideration and thoughtful action going forward. Let's hope this serves as a reminder to those thinking about entering this industry to take their responsibilities seriously and treat people fairly. Otherwise, we all might end up paying the price as an industry.
@Sean Bramble great narrative. So where else do you invest if ltr and str is worrysome?
STR isn't necessarily worrisome if you're approaching it strategically. Force fitting commodity hospitality assets into normal single family homes is what's risky bc it's so easy for John Doe and Joe Schmo on the same street to do the same
Remember that a hotel room is an STR ... so is a luxury villa with full staff and in-house chef in the French Alps ... and so is your basic 3b/2ba Airbnb listing in Normal-ville USA (sparingly furnished with IKEA furniture). It's a huge spectrum with different price tiers, service levels, and product quality. Where should you play? Not in the commodity space IMO
My STR in Florida bookings and rates are as strong as any of the previous 2 years.
@Sean Bramble great narrative. So where else do you invest if ltr and str is worrysome?
STR isn't necessarily worrisome if you're approaching it strategically. Force fitting commodity hospitality assets into normal single family homes is what's risky bc it's so easy for John Doe and Joe Schmo on the same street to do the same
Remember that a hotel room is an STR ... so is a luxury villa with full staff and in-house chef in the French Alps ... and so is your basic 3b/2ba Airbnb listing in Normal-ville USA (sparingly furnished with IKEA furniture). It's a huge spectrum with different price tiers, service levels, and product quality. Where should you play? Not in the commodity space IMO