I imagine this topic has been discussed multiple times on this forum... so, what is one more?
My wife and I have an AirBnb we host out of our house. It is a completely separate 2 br/ 1 ba apartment in a very touristy area (if anyone knows Asheville then you get it). Anyways, we had a lot of very consistent bookings for the first few months and have great reviews (17 five stars, and achieved SuperHost Status). We also got professional photographs etc. Lately it feels like there's been a big slow down. We use BeyondPricing to help adjust rates.
According to the data out there it seems like maybe its just a combo of the down season and also a glut in the market (around the holidays there was a 50% vacancy rate). We have not expanded beyond AirBnb to VRBO or other vacation sites yet.
Any advice would be greatly appreciated. I would love to know what other people in similar situations have done!
My wife and I have 23 STRs in this town that we rent to travelling refinery workers. Scary looking burly guys with neck tats. The work that they do is not predictable. Therefore, their occupancy of our STRs is not predictable. But it's good money, but it is not steady money. We could convert our STRs into conventional LTRs and make steady money. But the steady money would not be good money.
That's the price you pay for having good money. It's not steady money.
If you or I could figure out a way to make good steady money with STRs, we'd be closer to becoming multimillionaires.
@Alexander Krasne You’re too new to blame this on the market. It’s just a growing pain. On the other side of the mountain where I am, which is the highest volume VR market in the county, we notice down time in January February. My goal is to not lose money these two months.
You need to be on VRBO before you can even begin to complain about not getting enough bookings.
Since when are VRs legal in Asheville? I guess because it’s owner occupied?
I’d stop using beyond pricing and do things by hand until you can get more butts in the seats.
“Rich people focus on opportunities. Poor people focus on obstacles” - secrets of the millionaire mind.
My wife and I have 23 STRs in this town that we rent to travelling refinery workers. Scary looking burly guys with neck tats. The work that they do is not predictable. Therefore, their occupancy of our STRs is not predictable. But it's good money, but it is not steady money. We could convert our STRs into conventional LTRs and make steady money. But the steady money would not be good money.
That's the price you pay for having good money. It's not steady money.
If you or I could figure out a way to make good steady money with STRs, we'd be closer to becoming multimillionaires.
@Alexander Krasne I would manually look up prices on VRBO and Airbnb on similar properties and make sure you are being competitive. Also do a search for you property without being logged in and see what your search position is. If it is low there is an underlying reason that you need to address.
@Paul Sandhu I love how you used “multi” in front of your “millionaires” ;) I gave you a shout out on OBY Sunday just before 3pm East. @John Underwood got one a while back and it’s not even his flavor
No matter what Airbnb tells you about "experiences" in the end it all comes down to rates. I experience a huge swing in rates between high and low seasons in my market, and even though you're using Beyond Pricing, do you own research by identifying a handful of "like" properties and see what their base rates and nightly rates look like. Use the calendar as if you're a guest and build a spreadsheet for weekday and weekend rates - you're bound to learn a lot. You might consider VRBO but I would recommend doing some research on activity/availability on the site prior to signing up.
@Luke Carl I was being realistic when using the word multi. Who would want to just be a millionaire when they could be a multimillionaire. Got your message about the shout, but I wasn't in my vehicle at that time.
@Luke Carl, correct. AVL has allowed owner occupied AirBnBs and we had a basement unit we made legal. We've been doing this for about 4-5 months so what is your definition of being an old hand.
How do you correlate your VRBO and AirBnb bookings? Also, I want to point out I am not complaining about less bookings just wanted successful strategies you guys have seen in case I am missing something.
There is indeed a significant slowdown in AVL. We are down year-over year (in addition to the expected seasonal lull, which is enormous), from first to second year, despite 5 star reviews. We attribute it to a rapid increase in available rentals as more people jump into what was only last year a profitable market. There will also (in my guess) likely be some decline as the "heat" and newness of Asheville wears off a bit, and people start looking for more variety in their trips. The impending recession will enhance that slowdown as well. We expect a few marginally profitable years, then either recovery or continued decline, depending on how many new players enter the market.
@Alexander Krasne certainly you’ll need to get through at least 12 months to understand how the cycles work. You have no way to know what things were like this time last year. Each 12 months cycle will be similar but in many ways different. Eventually you won’t even care. I’m joking but I’m serious.
As others have said, study your neighbors and undercut them by 10 percent until you have more reviews than they do. I generally suggest a minimum of 50 reviews before getting comfortable.
I've been using Beyond Pricing for the last ~6 weeks and haven't been all that impressed, I'm planning to cut them off and go back to manual pricing even though it's more of a pain. But honestly, Jan-Feb are slow anyway. My rentals are in Pigeon Forge/Gatlinburg and I'm currently at my family's house in Maggie Valley, NC - have you looked outside lately? Weather's pretty lousy. LOL
Also curious about if STR regs have changed in Asheville lately? Last I heard they were very strictly banned.
You've already gotten solid advice here - list on VRBO, check your competition and see if you're falling short somewhere, and consider dropping your prices for the next couple of months.
@Luke Carl, thanks! We really bought the house because neither of my wife's or my families live nearby and we wanted a place for them that they still had to knock on the door to come in. Then all of a sudden this started working and it went from beer money to Wow this is paying off our mortgage money, which is pretty cool. So, it's definitely a new experience for us.
Fellow Ashevillian here. Adjust your pricing and min days to stay competitive. Do your own manual comps and adjust accordingly. Definitely get with Vrbo. Winter is slower around here for sure but I’ve stayed around 85% occupancy by adjusting pricing and staying on top of it.
Get ready to be busy the other 9 months out of the year.
As far as the STR market slowing down around here, it's bound to happen so make sure you're not over leveraging and build yourself plenty of buffer for when that happens.
This is pulled from the Citizen Times from January 2018:
"First, is your property in the city of Asheville? (Are you sure? Don't rely on mailing address. Asheville residences have blue city recycling bins and green city garbage bins with City Hall logos. You can also check here: gis.buncombecounty.org/buncomap_new.)
— If "yes": Are you renting the entire dwelling unit? (A unit with its own sleeping area, kitchen and bathroom.)
— If "yes": Then, yes. Property "by right" can be a short-term vacation rental, or STVR in city-speak. Contact Asheville Development Services.
— If the property is not zoned "Resort": Is the property already operating as an STVR?
— If "yes": Does it have a city STVR permit? (Check with Asheville Development Services)
— If "yes": Then, yes, your property is eligible. New STVRs are banned in most places including downtown, but permitted ones are "grandfathered in."
— If a property has no permit: No, you cannot rent your whole dwelling unit. But you can go before the City Council and request conditional zoning.
— If you don't plan to rent the entire dwelling unit: It may qualify as a "homestay." Long-term resident must be present in home at the same time as guests, who may rent up to two rooms. Guest rooms cannot have own kitchens. Think you qualify?
— If "yes": Get permit here. Contact Asheville Development Services
— If "no": You can ask City Council for conditional zoning to allow STVR.
If your property is not in the city limits: Check with your local government planning department.
I am going to offer advice without offering advice. The forum police are massively overhanded here so you will have to read between the lines.
Here is the short of it.
Travelers are sick of the fees and commissions being charged by the largest OTAs. I should know - we have seen incredible numbers and they just keep growing. It is not competition - your clients are just finding newer and better ways to book saving themselves 100s of dollars in the process by eliminating "service" / "convenience" fees.
What @Michael Kugler is saying is that there are other websites out there. I can count on one hand how many rentals I have gotten through Airbnb Homeaway and the like in the last 6 years. The majority of my rentals come through CL, repeat business that originated from CL, or offline forms of marketing. I've had 1400 renters (not rentals) in the last 6 years. 1400 renters comes out to about 700 rentals. Less than 5 of those 700 came from Airbnb etc.
I'd be interested to know the alternative channels other than Craigslist that consumers are using. I'm on AirBnB, HA (VRBO) and Flipkey (TA), which all come at high overheads to the consumer.
Some guests on HA request to deal directly to avoid the fees, which I rarely oblige for fear of losing my ranking. ABB and TA offer no such option. Does anyone deal directly and do you feel it affects your ranking? One of the stats HA uses to determine your ranking is conversion, which would be negatively affected if you deal directly after a guest makes an inquiry.
@Alexander Krasne I host 7 short term rentals on AirBnB and HomeAway. We haven't seen a drop in reservations with ours. We're in a less touristy area than Asheville. Our homes are near the interstate and a military base. We stay over 80% occupied and book out 2-3 weeks. We have lots of halfway point travelers and families visiting their soldiers. Have you looked at the prices of your competitors? Maybe how far out they're booking. Instant booking turned on? How about your minimum night stay? I know lots of hosts don't like one night minimums because of the turnover rate, but it works great for passing travelers.
Originally posted by @Asury Johnson: @Alexander Krasne I host 7 short term rentals on AirBnB and HomeAway. We haven't seen a drop in reservations with ours. We're in a less touristy area than Asheville. Our homes are near the interstate and a military base. We stay over 80% occupied and book out 2-3 weeks. We have lots of halfway point travelers and families visiting their soldiers. Have you looked at the prices of your competitors? Maybe how far out they're booking. Instant booking turned on? How about your minimum night stay? I know lots of hosts don't like one night minimums because of the turnover rate, but it works great for passing travelers.
Thanks for your input. We could shorten the days but we don't have consistent staff for apartment turnover. Do you contract w a service?
And yes our rates are very competitive with other similar listings as others in the area if not a little lower.
@Alexander Krasne I tried to contract a cleaning service to do my cleanings and had horrible results. I don't think my homes are with their time. I since have hired my own cleaning girls. One was a friend and other I found on Care.com. They are both stay at home moms that need the flexibility and extra cash. I drew up a contract and list of responsibilities between us and they have been with me for over a year. I added them to my calendars as co hosts so they can see the schedules. I pay them a standard rate per cleaning, unless the home is extra dirty. I also provide all cleaning supplies. Each house has its own cleaning supplies/extra linens in locked closet that guests can't access. One of my girls prefers to get paid at the 1st of the month and the other biweekly. It's their responsibility to manage a cleaning ledger and submit it to me before I send payment.
@Asury Johnson From what you have described, it sounds like a very good arrangement. I have 23 STRs in my town. Cleaning them between occupancies is the most difficult part or running STRs.
@Paul Sandhu I totally agree! I prefer to train my team instead of hiring established cleaners. Also, I learned to only prep beds that will be used and I never leave more than 2 towels per guest available. Laundry is what takes the longest. STRs have become my favorite. We are slowly turning all our 1000 sq ft homes in our inventory into short terms. They are definitely an unmet demand in my market. We have a military installation that have frequent family visitors and transitioning families.