This year has been an eventful one for short-term rentals around the world: The boom-bust saga and seeming unending fights about new regulations.
06.12.2023 - 04:37 / skift.com / Srividya Kalyanaraman / Richard Clarke
If you’ve seen a tweetstorm about the alleged “Airbnb collapse” and are wondering if the data seems too dramatic – you’re not alone, or even wrong.
Using what he said was AllTheRooms data, Reventure Consulting CEO Nick Gerli claimed that revenue per available listing in cities such as Phoenix, Arizona fell 47%, when considering 3-month averages over the 12 months through May 2023, and Orlando, Florida’s dropped nearly 38%.
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But let’s put it in context.
I spoke on Wednesday to Richard Clarke at AB Bernstein to help me understand this. Clarke is the managing director at brokerage firm AB Bernstein and covers global hotels, OTAs and short-term rentals.
“This is selective data sourcing,” he noted. “It’s been a fairly consistent message that some markets in the U.S. are seeing a drop in price and demand in the post-covid normalization. There are properties trying to hold prices at 2021, 2022 levels – in 2023, when there is a wider choice of places to go to. Prices need to come back to equilibrium now. Airbnb is an international company and what it loses in Arizona it can make up for in Croatia and Mexico.”
“Hotels came down a bit earlier because pricing is more dynamic. With short-term rentals, pricing is lethargic and has come down dramatically. Sure 100% the markets are normalizing everywhere but the data is selective to present that in an extreme way, overly focused on the U.S. There are plenty of strong growth pockets for Airbnb in markets like Eastern Europe and Asia.”
AB Bernstein’s new report on Airbnb emphasizes the company’s unique positioning in the lodging industry — especially as its users skew younger and from emerging markets.
Remember the chart from yesterday’s edition showing rising occupancies, while others depicted a dip? Short-term rental analysts as well as industry professionals all agree the market is normalizing, and that means a fall in occupancies given how much supply has grown, and if the prices remain stubbornly high.
Here’s more data that validates the point: In Hawaii, which is a big U.S. tourism market, is seeing occupancies slide — in the Big Island as much as 14% compared to last year and 27% compared to 2019. And in Kaua’i, it’s down 1.1% compared to last year and 28% compared to 2019. In the Big Island, the average daily rate was $228, which is 2.3% less than May 2022 but 48.7% more than May 2019. And in Kaua’i, the average daily rate was $375, which is 4.6% less than May 2022 but 47.1% more than May 2019. This data comes from the Hawaiʻi Vacation Rental Performance Report, issued by the State of Hawai‘i Department of Business, Economic Development & Tourism and compiled by Transparent Intelligence.
It’s a similar story in Rhode Island, which otherwise
This year has been an eventful one for short-term rentals around the world: The boom-bust saga and seeming unending fights about new regulations.
Hawaii Governor Josh Green has asked for 3,000 condos and homes operating as short-term rentals to be converted into long-term housing for those displaced by this summer’s wildfire in Lahaina.
Hawaii Governor Josh Green said he is ready to “drop the hammer” or go “nuclear” on short-term housing rentals on Maui.
Taylor Swift’s Eras Tour made headlines even before it began — by overwhelming booking platform Ticketmaster and drawing attention even from the U.S. Senate.
Dealmaking has kept short-term rental businesses in Europe busy. The past few months have seen an uptick in activity — be it mergers, or acquisitions or rebrandings.
Booking Holdings Chief Financial Officer David Goulden said this week that the flagship Booking.com brand launched its short-term rental business as a supplement to hotels “15-plus years” ago, which is roughly around the time Airbnb got going in San Francisco.
Fake signs warnings of bedbug infestations are being used to deter tourists in Athens, Greece.
This is not a story of “Airbnbust,” but instead we’re talking about a correction of the “Airbnboom” that has taken place since the highs of the pandemic.
Happy Thanksgiving, folks! I know you’d rather carve a turkey than open your inbox, so we will keep this brief.
You read it here first: We’re halfway into the year, and the short-term rental industry has been buoyed by summer travel picking up, despite prevailing economic uncertainty.
Stat of the Day: Thinking that you, like us, are wondering what’s happening to occupancy levels this summer, we had some numbers crunched for us by data analysis firm Beyond Pricing and this is what it found: U.S. occupancy for July is pacing about 5 percentage points down year-on-year, from 37 percent in 2022 to 32 percent in 2023.
New This Morning: Following extensive discussions within the community spanning almost four years regarding short-term rental homes, the Dallas City Council implemented zoning limitations to prohibit their presence in single-family neighborhoods last week. However, as a middle ground, short-term rentals will still be permitted in commercial areas and multi-family neighborhoods.