Short Term Rentals Slowing Down due to Negative Media Coverage??
Real Estate Agent · San Antonio, TX · Member since 2017 · 523 posts · 362 votes
Short Term Rentals Slowing Down due to Negative Media Coverage??
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesThe 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
47 Replies
- Investor · Jasper, GA · Member since 2019 · 55 posts · 31 votes3yMuch wisdom. Thanks for sharing. I am looking at maybe acquiring another STR, but I also have my eye on a BRRR. I only have one door so far, and it's a beach STR.
Quote from @Sean Bramble:
Quote from @Chris Noles:
@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
- Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes3y
It could be that if you are clicking on them you're getting retargeted with similar. I have seen some - it is in the same category as the click bait 'Airbnbust.' No worries to my market at all.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
It is more critical than ever for potential STR owners to realize that the single most (and maybe only) important criteria is location. Even more so than traditional RE. An incredible house in a bad location will fail, whereas a mediocre house a the perfect location will succeed.
- Member since 2022 · 272 posts · 253 votes3y
Quote from @Bruce Woodruff:
It is more critical than ever for potential STR owners to realize that the single most (and maybe only) important criteria is location. Even more so than traditional RE. An incredible house in a bad location will fail, whereas a mediocre house a the perfect location will succeed.
This is true. One can only induce demand so much. At some point, people either want to travel to that location, or they dont.
When I travel (with my family or alone) an STR always offers so much more than a traditional hotel. We're not looking for "experience" as much as comfort and quiet. It's millenials and their anti-landlord free "housing is a right" attitudes that have forced me to abandon LTR for STR. I don't make as much $$ but that's ok. I enjoy being in control of my properties, numero uno for me. As millenials and Gen z move into more adulthood they'll drift less idiealistic/socialistic. If I was 12 again I'd probably say the same kinds of things as they.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Henry T.:
If I was 12 again I'd probably say the same kinds of things as they.
Perfect description. Sad because you're talking about 20 and 30 yr olds.... 🤣
- Member since 2022 · 1k+ posts · 1k+ votes3y
The independent could still have a leg up with price, design and service. I look at this like the old faithful hole-in-the-wall mom n pop vs the investor funded celebrity chef restaurant. The independent investor that bought at the right time will probably have a lower cost basis than a well-funded new build. If you buy right and keep a lean operation you can weather the storm with lower prices, whereas a high dollar new build with high overhead will have a much higher cost basis per night and can only operate at a loss for so long. Then you have the inevitable homogenization that comes with scale, so the professional operation will either have to spend more to design and furnish their units uniquely or they furnish/design at scale for the cost savings and become just like the boring hotels that drove people away in the first place.
This isn't to say that there won't be successful operations like you mentioned, because I'm sure there will be some. Question is will they really be much different than a bunch of ski in/out or beach condos or cabins that all look the same. We keep hearing about uniqueness being a selling point, which is where independents will always have a leg up IMO. - Real Estate Agent · Cincinnati Ohio · Member since 2020 · 2 posts · 1 vote3y
My STR is out of state and in a resort area of TN. Haven't really had any issues there. Rentals have been strong but many of mine come from VRBO. I have found that the VRBO renter is a better risk over all for me. I'm not sure why but I guess they are usually families on vacations or long weekends.
- Investor · United States · Member since 2020 · 202 posts · 284 votes3y
Quote from @Jon Martin:
The independent could still have a leg up with price, design and service. I look at this like the old faithful hole-in-the-wall mom n pop vs the investor funded celebrity chef restaurant. The independent investor that bought at the right time will probably have a lower cost basis than a well-funded new build. If you buy right and keep a lean operation you can weather the storm with lower prices, whereas a high dollar new build with high overhead will have a much higher cost basis per night and can only operate at a loss for so long. Then you have the inevitable homogenization that comes with scale, so the professional operation will either have to spend more to design and furnish their units uniquely or they furnish/design at scale for the cost savings and become just like the boring hotels that drove people away in the first place.
This isn't to say that there won't be successful operations like you mentioned, because I'm sure there will be some. Question is will they really be much different than a bunch of ski in/out or beach condos or cabins that all look the same. We keep hearing about uniqueness being a selling point, which is where independents will always have a leg up IMO.All good points, and certainly true for those who bought over the last several years locking in to a better cost basis… but don’t kid yourself about mid-scale developers entering the space with better product custom designed with the end consumer in that geography in mind. I know of one in the Western NC & Great Smokies area who is building hundreds of units over the next few years, reverse engineering the perfect curb appeal, interior design and amenities that drive sky high revenues per sq ft. These are build-to-rent developments focused on ongoing cashflow (instead of a quick exit).
will a few developers like this put everyone out of business? Surely not. But I definitely wouldn’t want to own a Plain Jain 3/2 next to a new development of 20 brand new modern A-frame cabins :)
if your property truly is unique or high quality, there is safety in that. But let’s be honest - most folks who bought over the last few years bought normal homes thinking the returns we saw during covid would go on forever - Investor · Black Diamond, WA · Member since 2016 · 123 posts · 127 votes3y
Yes, I have been hearing some grumblings like that. I think it is a result of a landslide of investors who jumped in to the STR/Airbnb game in the last couple years because they saw dollar signs, but never learned to operate their properties as a legit hospitality business. As a result, guests are getting a bad taste in their mouth because they can sense when someone is just in it for the returns, and not focused on creating an incredible guest experience.
To me these are just growing pains, part of the process of the industry maturing. Eventually the bad operators, the ones with shiny object syndrome, will be forced to either improve or get out of the industry. Then the industry will be stronger than ever, with a balanced supply (quality supply) and healthy demand.
In the mean time, be a good operator! Offer unique, well designed listings and focus on creating the best possible experience for your guest. And as I always say, build an email list, take direct bookings, and DON'T rely 100% on airbnb.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesThis^^^ is the key to long-term success in the STR business.
- Real Estate Agent · Schertz, TX · Member since 2017 · 42 posts · 15 votes3y
I have a short term rental in the suburbs of San Antonio. Cibolo, TX is close to Randolph AFB and 30 min drive to downtown San Antonio or New Braunfels. We have been booked for a1.5 years straight with 90 percent occupancy rate until December 2022. Going into January, I had zero reservations. Scary times but thankfully the home cash flowed well for a long time so while we were nervous, we didn't give up. I made some changes and lowered my prices. Then the next day I caught a 30-day reservation. I have heard from other owners in more saturated areas of San Antonio have been having the same issue with minimal reservations.
I hope to continue to make adjustments to keep my occupancy rate up. I am not in a vacation area but have found a niche in the suburbs with people transitioning to south Texas and waiting to close on a home.
- Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 487 votes3y
In my STR world, if your occupancy rate is 90%, you are NOT in 'scary times". You are very fortunate! You must be doing it right! : )
- Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 487 votes3y
Quote from @Michael Guzik:
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.
(Twitter) Haters gonna hate. I don't look to Twitter or Facebook for an indicator of how the vacation market is going--I look at the market itself, my bookings, and the traffic I see all along the Emerald Coast. As we all know, people can say what they want from behind the safety of their screens. That is not reality.
- 3yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
While it all just gets lumped into "STR" or "Airbnb" this is really more of an urban rentals thing, not a vacation rentals thing. And most of us here have vacation rentals, not Urban "Airbnb's".
It's definitely true that the hot new trend on social media the last few months has been to hate on Airbnb. If you want to go viral, just find an Airbnb listing where the fees are a huge percentage of the total price, or where the host has some absurd check-out requirement. But that doesn't really apply to most people here. These posts are things like "$49 for the room night, $75 cleaning fee fee, I think I'll just stay in a hotel!" or "the fees are 2x the price of the room rate, no wonder everyone is going back to hotels!". And yes, it's true, these posts get millions of likes and hundreds of thousands of shares so they're definitely being seen.
But these are people going to Houston for a night or two and comping Airbnb out to a hotel. Not really our market here. Though yes, I do agree, too much of a stain on the name "Airbnb" would hurt us since as much as we like to say just get bookings other ways, many of us to rely on Airbnb for a large percentage of our bookings.
And FWIW, I would not at all be surprised if a lot of it was hotel lobbying to drum up these social media trends. But again, there's no hotel that can give people anything close to what my properties offer, so there's no sense in me worrying too much about a battle between $49/nt apartment rental arbitragers with Hilton.
Cosmic Vacations4.9175 Reviews - 3yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
Quote from @Myka Artis:
Oh, they definitely are. Airbnb's winter release painted that picture as clear as day. The showing of the total price was a guest win-back attempt. Their stock price plummeted in Q4 which was the same time they released their winter release. My direct bookings are up 60% since the release. Airbnb's total price trick actually resulted in Airbnb showing its hand. Airbnb's service fee is what guests truly didn't want to pay and they were able to see that after seeing their total price in comparison to booking with hosts directly. Airbnb's stock price can't be plummeting while Airbnb demand is going up.Quote from @Dave Stokley:
True, but you said “guests are leaving the platform” which in the aggregate is not true and paints a misleading picture.Quote from @Myka Artis:
Quote from @Dave Stokley:
Not true. Demand was up 21.1% YOY in 2022.Quote from @Myka Artis:
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.
Airbnb demand and short-term rental demand are two different categories.Every growth stock is down a ton over the last year. ABNB is down less than AMZN or GOOGL. This is just growth stocks re-adjusting to more realistic multiples after everyone foolishly thought Covid growth was going to last forever and way overbought growth stocks to unsustainable multiples.
Airbnb demand can absolutely be going up while the stock price is going down. It's just such a bizarre statement to say they can't. There are dozens of different ways a company's stock price can go down while its demand/revenue is up. And it happens hundreds of times per year.
Cosmic Vacations4.9175 Reviews - Rental Property Investor · Arlington, TX · Member since 2016 · 706 posts · 611 votes3yThis very well can be the case I'm no stock market expert but I do watch Airbnb's stock, media, and algorithm closely. In this case, they have let us know that they are focusing on guest and host retention with their winter release. I don't think it would be a focus if both hosts and guests were satisfied this quarter.
Quote from @Ryan Moyer:
Quote from @Myka Artis:
Oh, they definitely are. Airbnb's winter release painted that picture as clear as day. The showing of the total price was a guest win-back attempt. Their stock price plummeted in Q4 which was the same time they released their winter release. My direct bookings are up 60% since the release. Airbnb's total price trick actually resulted in Airbnb showing its hand. Airbnb's service fee is what guests truly didn't want to pay and they were able to see that after seeing their total price in comparison to booking with hosts directly. Airbnb's stock price can't be plummeting while Airbnb demand is going up.Quote from @Dave Stokley:
True, but you said “guests are leaving the platform” which in the aggregate is not true and paints a misleading picture.Quote from @Myka Artis:
Quote from @Dave Stokley:
Not true. Demand was up 21.1% YOY in 2022.Quote from @Myka Artis:
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.
Airbnb demand and short-term rental demand are two different categories.Every growth stock is down a ton over the last year. ABNB is down less than AMZN or GOOGL. This is just growth stocks re-adjusting to more realistic multiples after everyone foolishly thought Covid growth was going to last forever and way overbought growth stocks to unsustainable multiples.
Airbnb demand can absolutely be going up while the stock price is going down. It's just such a bizarre statement to say they can't. There are dozens of different ways a company's stock price can go down while its demand/revenue is up. And it happens hundreds of times per year.
- Investor · Naples, ME · Member since 2019 · 54 posts · 40 votes3y
Quote from @Myka Artis:
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 always correct and "educate" people when they refer to the "STR" as an "airbnb". I see the STR model moving towards MTR, or LTR for sure. When an owner realizes the profit margin is probably better in some cases in LTR, things change. I am doing all 3. Airbnb IMO has never been a good business partner for the owners, just sayin'.
When people discuss this topic, keep in mind there is a HUGE variation in results regionally, market of product, and management/dedication.
Those "damned millennial/Z's" ;) lack respect/appreciation much of the time. I still find good ones out there. I'm enjoying being able to screen my guests more.
One needs to keep on top of things in this business and be ready to dance either in the dance hall or over the coals. Be flexible and move when necessary. In my meager opinion :)
- Investor · Naples, ME · Member since 2019 · 54 posts · 40 votes3y
Quote from @Dustin Blackmon:
I have a short term rental in the suburbs of San Antonio. Cibolo, TX is close to Randolph AFB and 30 min drive to downtown San Antonio or New Braunfels. We have been booked for a1.5 years straight with 90 percent occupancy rate until December 2022. Going into January, I had zero reservations. Scary times but thankfully the home cash flowed well for a long time so while we were nervous, we didn't give up. I made some changes and lowered my prices. Then the next day I caught a 30-day reservation. I have heard from other owners in more saturated areas of San Antonio have been having the same issue with minimal reservations.
I hope to continue to make adjustments to keep my occupancy rate up. I am not in a vacation area but have found a niche in the suburbs with people transitioning to south Texas and waiting to close on a home.
Similar experience here...medical center area market has saved my ars. MTR to traveling profession and military families relocating has been my base from Aug to now. I'm expecting the summer to hop, but have limited my % of homes to on two for STR. Diversifying. Airbnb dominates SA, and to make matters worse, at cheap prices for amateurs. I refuse to drop my prices that low, as my experience is you attract the disrespectful guests that way.
I believe things are greatly changing, as the city is cracking down on STR owners not paying their HOT (I heard a rumor that it was about 60% of the listings). Hummm...we'll see how that effect us now.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
So @Kathy Cooper, you are saying to believe that all STRs will go away and become longer stay STR or a LTR? I am not sure that is going to happen really.
I do see some folks making the switch over if necessary, but there are many performing STRs in many markets that will keep going on. Our place wouldn't make a good short stay long term rental. Maybe a decent LTR but it is a lake house that is quite rural. We are doing well in the STR market and I think we will keep on keepin' on.
- Investor · Naples, ME · Member since 2019 · 54 posts · 40 votes3y
Quote from @Michael Baum:
So @Kathy Cooper, you are saying to believe that all STRs will go away and become longer stay STR or a LTR? I am not sure that is going to happen really.
I do see some folks making the switch over if necessary, but there are many performing STRs in many markets that will keep going on. Our place wouldn't make a good short stay long term rental. Maybe a decent LTR but it is a lake house that is quite rural. We are doing well in the STR market and I think we will keep on keepin' on.
I absolutely did NOT mean that all STRs will go away and become longer stays. I was just noting what I am experiencing. In fact, one cannot make a blanket statement like that, as there is a huge field of differences in market out there fro STR. I think the pure vacation homes (ie a nice lake house or such) are still doing well. People need to "get away". There has been tremendous changes for whatever reason, in the markets otherwise. Each investment will be different. I am in an area that is fortunate to take advantage of different markets. I am balancing and changing according to how well one is doing over the other. This is all just my opinion based on experience with my specific properties. If you are doing well with STR, keep it going by all means. I think we have a storm we are weathering out still in our economy and it is different from place to place. All the very best!
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hehe thanks @Kathy Cooper! I figured as much but I thought I would seek clarification.
There has been so much doom and gloom about STRs that I want to make sure that newcomers get a balanced view.
Like you said, each and every STR is different and each investor has to make sure before jumping in. :)
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