‘Airbnbust is upon us’: Tweet hints at Airbnb’s downfall. But is it good?

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The tweet has been shared over 8,000 times. More than 53,000 people liked it. Scores replied. So what did this viral social media post have to say? Simple: “The Airbnbust is at our doorstep.”

The Tweeter, originally posted on October 16, specifically shares an image of a post from what appears to be a Facebook group for Airbnb hosts. The post shows two different comments claiming that there has recently been a drop in short-term rental bookings. Most responses lean towards schadenfreude, with a slew of people criticizing Airbnb hosts for excessive fees, outlandish cleaning requirements and gobbling up housing stock. The angst captured in the comments grew so large it boiled over and gained its own media coverage.

The Airbnbust is on our doorstep#Airbnb pic.twitter.com/2BMTjGhiox

— Texas DFW runner (@texasrunnerDFW) October 16, 2022

A number of other similar posts have also recently appeared on platforms such as ICT Tac. And amidst the pile, the theory that Airbnb and its hosts are in trouble has spread across social media. All of this begs the question: Is Airbnb experiencing a meltdown? Are reservations down? Are the hosts facing some sort of apocalypse?

Inman reached out to Airbnb and a handful of experts who track short-term rental space. And the short answer is no, there doesn’t seem to be any kind of “bust” happening. Despite anecdotal stories of lower booking numbers, overall Airbnb is still having a good year.

That said, there are changing dynamics in the market and there are real reasons why some individual hosts might actually see a drop in bookings right now. Here’s what you need to know:

Is the Airbnb bust real?

To get to the bottom of the alleged bust, Inman first contacted Airbnb. In an emailed statement, a spokesperson later highlighted the company’s latest earnings reports and said “customer demand on Airbnb was higher than ever in the second quarter, and Airbnb has vastly outperformed the rest of the travel industry.”

Figures from the latest earnings report show that in the second quarter of this year, company-booked nights and experiences (the latter being local-hosted activities) were higher than in any other quarter in the past. the company. The figures also show that 75% of newly activated and booked listings were entered by travelers in the second quarter of this year at a faster rate than a year ago.

These figures suggest that at least in the second quarter of this year – which ran from April to June – Airbnb bookings were apparently doing well.

But those numbers alone may not satisfy everyone, because since the second quarter the economy has changed significantly – interest rate are on top just like inflation — and the housing market has slowed.

To understand what happened more recently, Inman spoke with Jamie Lane, vice president of research at AirDNA, a major tracking and short-term rental data company. And Lane said Airbnb’s good year has continued so far.

“Demand is up,” Lane said. “Bookings are higher than they have ever been during the month of September. We are not seeing any decline in booking activity compared to what we typically see at this time. »

A report from AirDNA further shows that in September, travelers spent a collective total of 18.4 million nights in short-term rentals. The report further notes that “September saw a new performance record in the post-pandemic period, with total demand for nights exceeding September 2019 levels by 26.6%.”

Other companies are seeing similar trends. Aaron Ru is a principal at RET Ventures, which invests in a number of startups including TurnoverBnB, a company that provides cleaning services and software for tens of thousands of short-term rentals. Ru told Inman that not only is TurnoverBnB not seeing any sort of bust, but in fact the company’s data shows that “this month will be their strongest month ever, even with the seasonality.”

“They see the same as AirDNA,” Ru added.

So why are some hosts seeing fewer bookings?

The takeaway from Lane and Ru is that overall there doesn’t seem to be a crisis. But that doesn’t mean that for some hosts it can’t to feel like a bust.

Lane said part of what’s happening is some hosts might be experiencing some seasonality, where bookings were up in the summer but down in the fall.

“There is a big drop in demand from July to September and from July to October,” he explained.

In addition, there are some significant supply and demand dynamics at play. Lane explained that the number of short-term rentals has increased lately, which means that while the total number of bookings is up, “ on average, everyone individually sees their reservations drop”.

“Because supply has grown faster than demand, we’ve seen overall occupancy drop,” Lane explained.

A useful analogy might be a grocery store that carries bread from three different companies. If the store starts selling bread from six companies, the grocery store will likely end up with more sales, but the individual bread companies might end up with less each. In this case, Airbnb is the grocery store and the hosts are the bread companies.

Ru mentioned a similar trend, saying that due to an increase in the supply of short-term rentals, “bookings per host are down slightly.”

Still, the key word is “slightly”; AirDNA data shows occupancy stood at 58.1% in September. That’s down just 1.2% from the same time last year, and it’s actually an 11.1% increase from 2019.

The bottom line, then, is that seasonality, increased supply, and last year’s boom could all shape some hosts’ immediate experiences, even though the overall trend has been on the rise.

What about the cleaning fees and requirements that everyone hates?

Much of the social media discussion of the so-called Airbnb bust involves complaints about cleaning requirements and excessive fees. The general idea is that requiring guests to clean and pay a fee drives people away from Airbnbs and into hotels.

“AirBnB these days really looks like a scam,” one person replied to the viral tweet. “Avid homeowners squeeze as much as they can by doing less [the] minimum.”

“Over $100/night charge,” another wrote. “Just not a reasonable proposition. Wtf is a “service charge” anyway.

“They also expect you to clean the dishes, throw the garbage, do the laundry,” complains a third. “Do I also have to cook [a] 3-course meal before my departure?

The demand and occupancy figures above suggest that, overall, these complaints have not translated into a broad movement away from Airbnb. But as always, there are winners and losers. For example, Lane noted that thanks to a large supply, there’s “a lot of competition to accommodate guests” right now.

“Now, I think hosts are learning that if they want to book their house, they have to try a little harder than last year,” he noted.

Cleaning and fees play a part in the effort, with Lane noting that hosts who include their fees up front fare better.

“Hosts who do see significantly higher bookings than hosts who don’t,” Lane explained, “because that’s what guests want.”

Lane also said properties with amenities, such as pools and beautiful views, fare better than more generic listings. Ru made a similar point about amenities acting as strong selling points, and added that there seems to be a growing gap between amateur and smaller-term hosts and “professional hosts with differentiated Airbnbs.”

A self-proclaimed host who responded to the original viral tweet also mentioned that reduced cleaning and maintenance requirements have led to an increase in bookings.

I saw a drop in sign ups this summer so I dropped some of the more extreme chore requirements i.e. mowing the lawn, brushing/vacuuming the pool and bookings came back to normal. The market is still strong, but you can’t expect tenants to do the same

— J (@grewhar) October 17, 2022

The end of the coronavirus pandemic may also simply change preferences. Peter Rex is the Founder and CEO of Property Management and Software company Rex (no relation to REX Real Estate which is locked in a legal battle with Zillow). Among other things, Rex’s company operates both short-term rentals and a hotel, and he said some of the more remote listings that have become popular during the pandemic may lose appeal as the health crisis s is fading and people are returning to the cities.

“We’ve seen a rejiggering with where people are going,” he said.

Rex also said that some hosts are realizing that operating a short-term rental is more work than they thought and costs more, which in turn prompts them to potentially increase their price.

“Running a hotel is a huge amount of work, just like running an Airbnb,” he added.

All this to say that fees and cleaning requirements may not be sinking Airbnb’s business model. But with changing tastes, these factors could help sort out the industry, pushing customers toward certain types of units over others. And the result of all of these trends is that some consumers are fed up, and some hosts may not be seeing the kind of reservations they might have wanted.

Nonetheless, all of the experts who spoke with Inman for this story indicated that they expect the short-term rental concept to stick. The business model has already survived several business cycles — Wired same requested in 2020 “Is this the end of Airbnb?” – and so far the numbers suggest it is only continuing to grow.

“Short-term rentals,” Rex concluded, “are not going away.”

Email Jim Dalrymple II