Dylan Malitsky has listed his Denver-area home on Airbnb Inc. since moving to Miami for work nearly a year ago. Things went extremely well at first, he told MarketWatch — he got back-to-back bookings for weeks.
“I had no experience in real estate,” Malitsky said. “I thought I was the most successful entrepreneur ever. I thought that was my ticket to building equity and making money.
But after bringing in around $60,000 since he started renting out his property on Airbnb ABNB,
he said his bookings had “fallen off a cliff” in August. His property hasn’t been booked for any dates in November and beyond — not even for the start of the ski season in December and January, a major tourist attraction for the Denver area.
He is not alone. Airbnb hosts empathize with each other over falling occupancy rates in Facebook groups, on Reddit and on Twitter, where a screenshot of a Facebook post gone viral Last weekend.
Experiences from hosts across the country, along with reservations and other data, show that occupancy may have declined due to a variety of factors: there are many more hosts on the platform; prices have risen and travelers can reduce their spending; and pent-up travel demand after coronavirus pandemic lockdowns pushed bookings to record highs last year come back to earth.
AirDNA tracks listings and occupancy rates from Airbnb and rival Vrbo, which is owned by Expedia Group Inc. EXPE,
AirDNA economist Bram Gallagher said in an email to MarketWatch, “After two years of prolonged seasonality and many destinations enjoying longer stays and greater flexibility to work from anywhere , we are now seeing a correction towards a new base year, where the seasonality is somewhere between the old normal and the 2021 boom.”
Supply and demand
The problem seems to be more a question of supply than demand. Data shows supply has increased as more people like Malitsky put their properties up for rent when short-term rentals spiked during the COVID-19 pandemic.
In September, US short-term listings available on Airbnb and Vrbo reached 1.38 million, up 23.2% year-over-year, and an 8.7% increase from September 2019 , according to AirDNA. The company also found that September occupancy fell 1.2% year-over-year to 58.1%, but was up 11.1% from the same month in 2019. .
Truist Securities analyst Naved Khan wrote in a recent note to investors, based on a call with Key Data and vTrips, which also collect data on Airbnb and Vrbo, that “although occupancy has declined in the In the United States, we attribute the decline to a corresponding increase in online supply.In the third quarter, occupancy fell 10%, according to Khan’s note.
Customers also have to pay more, according to Khan’s memo, which says average US daily rates for Airbnb and Vrbo rose 5% year-over-year in the third quarter. That’s roughly in line with data from AirDNA, which showed average daily rates in September rose 5.6% year-over-year to $265, and 31.1% from September 2019.
Still, demand for short-term rentals has increased, according to data from AirDNA. September demand for Airbnb and Vrbo rentals increased 24% year-over-year and 26.6% compared to the same month in 2019. Additionally, nights booked for future travel increased by 19.3% year over year, according to AirDNA.
Airbnb spokeswoman Liz DeBold Fusco said “amid new economic pressures, more and more people are looking to take advantage of the space they have to earn extra income, and fast, most of newly activated listings being booked faster than a year ago.” She also mentioned that last quarterin which the company reported its second most profitable quarter ever, Airbnb saw a record number of room nights and experiences booked: 103.7 million, up 24% from the 2019 quarter.
Responding to questions about updates the company has made to its platform, she said Airbnb “regularly checks our community” to make sure updates are working as expected.
Weighing alternatives
Malitsky blamed market saturation and a deteriorating economy that could prompt people to cut back on travel. But he also plans to ask Airbnb if he no longer appears in searches after the company made some changes to its platform, and plans to turn his property into a long-term rental.
Other hosts also told MarketWatch that they are considering alternatives to renting their properties on Airbnb. Still others seem to be giving up, especially those who have bought homes for the sole purpose of renting them out on Airbnb.
Jim Ewing is the Airbnb host whose Facebook post about his lack of bookings went viral when someone else tweeted it and said, “Airbnbust is right around the corner.” He began listing his Palm Springs, Calif.-based property on Airbnb last October and told MarketWatch he was looking to get out and interviewing long-term tenants for his property.
Ewing said his property – which he and his wife bought as an investment with his mother-in-law – was around 80% occupied until April. Then in May, “we went from 80% to zero”.
So they cut their prices in half and managed to get more bookings. But they haven’t had any reservations since July. And only one reservation for New Years Eve, which he said they would probably cancel if they found a long-term tenant.
“I hope I’m not making the wrong choice,” he said. “That I leave the market in time – before everyone says so [they] need to find long-term tenants.
In Houston, Amber Melenyzer told MarketWatch that last summer was the slowest for her guesthouse in five years. But she said bookings have started picking up for her now, possibly because her area is becoming less saturated.
Melenyzer said that in his Facebook group in the area, “a lot of people are trying to get rid of furniture from their Airbnbs…I think a lot of people maybe got into it thinking they were going to make some money. silver”.
Because her guesthouse is attached to the house she lives in, she plans to stick with it. “It’s a side hustle for me,” she said. “I pay the same price for my house no matter what.”
Data from AirDNA confirms what Melenyzer saw in his area: Houston saw 43.2% more new registrations year over year in September, and occupancy fell 8%.
Malitsky, the Airbnb host in the Denver area, now has another mortgage in Miami. So he plans to turn his Colorado home into a fully furnished long-term rental. But before that, he ditched the requests he used to make of his Airbnb guests.
Some Airbnb hosts give their guests “a long to-do list and still charge cleaning fees,” he said. “I have now started to say don’t worry about anything. I hope to attract more people. »
Airbnb shares are down nearly 30% year-to-date, while the S&P 500 SPX index,
has fallen about 23% so far this year. The company is expected to release its third quarter results, which include the summer months, on November 1.
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