Top Ten Cities for STR revenue collapse

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Top Ten Cities for STR revenue collapse

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

Of course your individual results can vary. There are people fighting this post too. What are you seeing in your market?

Reposted from Twitter....

Nick Gerli @nickgerli1 The Airbnb collapse is real. Revenues are down nearly 50% in cities like Phoenix and Austin. Watch out for a wave of forced selling from Airbnb owners later this year in the areas hit hardest by the revenue collapse.

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Bob Willis

Investor · Curtis, NE · Member since 2019 · 231 posts · 140 votes

Not sure about the veracity of the numbers, but simple math should maybe give some clarity.

Here are representative numbers

2020 - Market has 1,000 listings on Airbnb, with $1million in Airbnb bookings/month for that market, this equates to $1,000/month/listing.

2023 - Market has 4,000 listings on Airbnb, with $2million in Airbnb bookings for that market, this equates to $500/month/listing.

Airbnb says "business is great." hosts, "the sky is falling."

Not sure where these numbers fit in the scenario, but as a host, this is what you need to look at. STR saturation is real.

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Kasey Sulheim
Investor · Honolulu, HI · Member since 2015 · 28 posts · 8 votes
3y
Quote from @Bruce Lynn:

I think this is like when your friends go to Vegas. No one tells you they lost their shirt and pawned their Rolex. Everyone comes back a winner. However, they didn't build all those 4000-5000 room hotels by giving everyone who walks in $1000, probably the reverse of that.
I always look at booking calendars when people tell me they're killing it.
Randomly I chose a pretty nice looking "cabin" 5 bedroom in Sevierville....which I've probably never been to or remember anything about. I don't think I'd even heard about it before today. Picked random week a couple of weeks from now. It was called Sevierville Home w/ Mountain & Lake Views! Rate is crossed out from $447 and now $337 per night. For July as of today they have 13/30 nights booked. August 6/31 nights. Obviously they still have time to pick up bookings....but that looks like ghost town to me. Rough value of the home $610,000. Not sure about furnishings. Would it take $50,000 to furnish nice 5 bedroom? They have hot tub and to me the furnishing don't look cheap.
Is this peak season for the area? Out of $337/night what drops to bottom line after utilities, booking fees, management fees. Does everyone book last minute vacations on airbnb?
I see a lot of places for 1/2 this rate.....I can imagine a year or two ago they were double the price, but maybe I'm way off. So I don't know if this guy who came up with the chart is right or not, or if it is just click bait, but seems plausable.

I just watched a BP podcast yesterday with Tony Robinson and Rob Abasolo and one of the topics they discussed was how common last minute bookings on their Joshua Tree and Smoky Mt airbnbs are.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @John Underwood:

I see Sevierville listed as 1 on this list.
I'm not seeing it.
We don't have a "Airbnb" we have a vacation rental. Maybe that is the big difference.
We have 20k in gross bookings at our PF cabin for just July. The rest of the year has strong bookings too.
If you bought an "Airbnb" and not a vacation house in a great market then yes I can see these people suffering more.
Our Lake House is also doing really well this year.
So I personally have no concerns with these articles about a decline, but I get other people may not be so lucky.

John what is the difference between an " Airbnb" and a vacation house ?
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Quote from @Jay Hinrichs:

Quote from @John Underwood:

I see Sevierville listed as 1 on this list.
I'm not seeing it.
We don't have a "Airbnb" we have a vacation rental. Maybe that is the big difference.
We have 20k in gross bookings at our PF cabin for just July. The rest of the year has strong bookings too.
If you bought an "Airbnb" and not a vacation house in a great market then yes I can see these people suffering more.
Our Lake House is also doing really well this year.
So I personally have no concerns with these articles about a decline, but I get other people may not be so lucky.

John what is the difference between an " Airbnb" and a vacation house ?
An Airbnb could be a place you would stay so you could attend a concert or reunion etc.

A vacation rental is some place you would stay with your family on vacation.
Lake House, Mountain house with views, Ocean front house etc.
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
3y
Not in this market. Do commercial. Two items I have run across in the last few months.

A. Our three bankers said the market has been held up for the last two years with Government Covid money. This is starting to get used up.
B. Headed to Germany tomorrow on a River Cruise. Our 30th wedding anniversary from 3 years ago. Covid nixed it. Travel show I was listening to said overseas flights are off the chart compared to pre Covid. People going overseas more versus staying local.
Just more noise or info. Probably location specific. In our Small town USA. One business owner is building what looks like an AirBNB.
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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Henry Clark:

Not in this market. Do commercial. Two items I have run across in the last few months.

A. Our three bankers said the market has been held up for the last two years with Government Covid money. This is starting to get used up.
B. Headed to Germany tomorrow on a River Cruise. Our 30th wedding anniversary from 3 years ago. Covid nixed it. Travel show I was listening to said overseas flights are off the chart compared to pre Covid. People going overseas more versus staying local.
Just more noise or info. Probably location specific. In our Small town USA. One business owner is building what looks like an AirBNB.

Happy 30th (33rd !) wedding anniversary!!! (You're and old timer) ;-)
We're on 45 years. Simply decided there was nothing more important than my sweetheart and we've lived life that way.
Looks like you do too. Congratulations!

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Bruce Lynn
OP
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
Quote from @Henry Clark:

Not in this market. Do commercial. Two items I have run across in the last few months.
Congrats on the anniversary...River Cruise sounds like fun and perfect time of year....less crowds I hope, better weather I hope, and just in time for Oktoberfest.
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
AirBNB is a platform for booking places to stay. A vacation rental is a place you rent on AirBNB or VRBO to go on vacation! :)
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Melissa Nash
Rental Property Investor · Orange County, CA · Member since 2016 · 740 posts · 529 votes
3y
The better report to look at is what were the numbers BEFORE Covid. Most cities saw a boom during covid that wasn't "real" it was temporary. If you look at the numbers before the first lockdown you will see the "True" numbers to expect in a market.
The investors that know how to run the numbers, and purchased low and know how to run an airbnb property correctly are just fine. Its the investors that didn't know what they were doing and just looked at the wrong numbers and threw it up on airbnb made quick money fast, and now they are just hoping and praying with no plan and no strategy.....and overpaid are the ones in trouble and they are the ones that are lowering prices like crazy- which hurts everyone bc that is just a race to the bottom. So you have to know how to stand out as a host and not rely on price alone... how do you do that? You need a marketing and sales strategy- without it, you are just throwing a hail mary!
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Katie Haman
Member since 2020 · 9 posts · 4 votes
2y
@John Underwood can you please explain the difference between a vacation rental and an Airbnb?
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Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
2y
Quote from @Katie Haman:

@John Underwood can you please explain the difference between a vacation rental and an Airbnb?

There is no difference. Airbnb is the go-to place for homeowners to list their properties for rent, but it's like how we use "Kleenex" for all tissue paper, Airbnb's become a generic term for vacation rentals. Many people have no clue what a STR is unless you say "Airbnb".

[email protected]330-557-3021
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y
Quote from @Katie Haman:

@John Underwood can you please explain the difference between a vacation rental and an Airbnb?

Absolutely.
An Airbnb (spoken STR because airbnb is a company) can be a house on Elm Steet that is pretty much a place to shower and sleep.
A vacation rental is a place you would go spend vacation days and vacation dollars to make memories with your friends and family.
A vacation rental is still a STR, but not all STR's can be vacation rentals.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y
Quote from @Sarah Kensinger:

Quote from @Katie Haman:

@John Underwood can you please explain the difference between a vacation rental and an Airbnb?

There is no difference. Airbnb is the go-to place for homeowners to list their properties for rent, but it's like how we use "Kleenex" for all tissue paper, Airbnb's become a generic term for vacation rentals. Many people have no clue what a STR is unless you say "Airbnb".

Airbnb is not the go to place to rent a STR for everyone.
Point and case almost all my bookings come from Vrbo, but I have true vacation rentals.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y
Quote from @Michael Baum:

AirBNB is a platform for booking places to stay. A vacation rental is a place you rent on AirBNB or VRBO to go on vacation! :)
When I hear someone say "My Airbnb..." I immediately think that person is severely uniformed in what they have and are probably not very wise in the ways of Short Term Rentals if they don't even know the proper terminology.

Just my opinion based on my experience as a Professional Real Estate Investor of many years.

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Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
2y
Quote from @John Underwood:

Quote from @Sarah Kensinger:

Quote from @Katie Haman:

@John Underwood can you please explain the difference between a vacation rental and an Airbnb?

There is no difference. Airbnb is the go-to place for homeowners to list their properties for rent, but it's like how we use "Kleenex" for all tissue paper, Airbnb's become a generic term for vacation rentals. Many people have no clue what a STR is unless you say "Airbnb".

Airbnb is not the go to place to rent a STR for everyone.
Point and case almost all my bookings come from Vrbo, but I have true vacation rentals.
It definitely depends on location! I have learned in all our travels which site to go to first depending on our destination. Unfortunately, both sites are pretty much the google of booking STR, but direct is still the best even though it's a minute to get the traction going.
[email protected]330-557-3021
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