If you’ve read the various hot takes on the state of the housing market as indexed by Airbnb revenue, here are a few concerns you can put to rest. What will happen to the housing market in a recession is anybody’s guess, but speaking purely of Airbnb as a stock, the company has a few things going for it.
Firstly, the company offers lodging options at various price points, it focuses on domestic and younger travelers whoself-cater, according to an analysis by AB Bernstein in its report Airbnb: A Long Stay. And in an unfavorable macro environment where travelers stick to domestic trips and self-catered accommodations — that’s plus one for vacation rentals.
Specifically, Airbnb’s resilience comes from longer stays, increased rental demand, and more hosts joining the platform to supplement their incomes. In a recessionary environment, lower rates may not significantly impact Airbnb if offset by higher demand, and the sustainability of high rates will depend on factors like the recovery of APAC/city markets. Scroll down to see Airbnb’s long-stays performance under ‘Chart of the Day.’
Chart of the Day
A significant portion of Airbnb’s business is now focused on long-term stays of 28 days or more, accounting for 20% of its room nights, which is higher compared to other platforms. This trend is not solely related to leisure travel but is tied to individuals living in Airbnb accommodations. There are reasons to be optimistic about this aspect of the business, according to analysts at AB Bernstein. Historical data suggests that during past recessions, there has been an increase in employee mobility, with more people relocating domestically.
Temporary accommodation for relocation purposes is a common use case for longer-term Airbnb stays. Factors such as higher mortgage rates and reduced rental supply from professional landlords may contribute to an increase in renters rather than homeowners. In previous economic downturns, rental demand has shown resilience, even when new home demand declined. Airbnb is well-positioned to address the gap between supply and demand, particularly for short-term housing needs.
In Case You Missed It
The Dairy King in Delta, Colorado that had been vacant for about 15 years has been turned into a short-term rental. The property, which includes a 1,810-square-foot building on less than an acre, was sold in February 2021 for $110,000, with $252,000 worth of improvements made in the past year. The buyer was quoted in the local newspaper as saying, “…unfortunately, in these small towns, commercial (real estate) sometimes just doesn’t pay. Just being honest. I hate to be the bearer of bad news.”
Sonder is expanding its presence in Florida. With the addition of four new properties, Sonder will now offer a total of 930 live units across various accommodation types, catering it says to a diverse range of travelers including leisure, business, and conference guests.
Earlier this year, Sonder opened two new properties in Florida: A 76-key hotel close to the Miami Beach Convention Center, and a 149-key hotel located near the Walt Disney World Resort in Kissimmee. Upcoming openings include a 180-key resort hotel in the heart of Miami’s South Beach and a conversion of an office building into 95 serviced apartment units situated in Miami’s financial district. These four properties will more than double Sonder’s live units in Florida.
While speaking at Skift’s STR Summit last month, Sonder CEO Francis Davidson said, “We have boutique hotels, and we have a few resorts. But we are primarily operating in urban markets,” he said “And so we realize that there’s a significant opportunity in purely leisure markets. Form factors like glamping or villas, and cottages are really interesting to us.”
The short-term rental group on Nantucket Island agreed to put forward a series of bylaws for voters to consider at a special town meeting in November.
Some of these proposed bylaws include: Short-term rentals operators would be restricted to renting only one property. However, they would be allowed to rent multiple dwellings on that property, as long as they are rented to the same party under a single contract.
The bylaws would also prohibit corporate ownership of STRs unless every shareholder or partner is an individual person, rather than a corporate entity. Additionally, the regulations would grant the right to operate STRs across the entire island, while prohibiting them in units that are designated for affordable or attainable housing. The bylaws would also set a maximum limit of four weeks for rentals in apartments — existing rentals would be exempt from these bylaws.
Riverside County in California, which includes towns like Palm Springs and La Quinta, has included $1.8 million to strengthen enforcement of the county’s short-term rental ordinance in its newly adopted budget, which took effect July 1. The budget allocates $825,000 to code enforcement for the purpose of establishing a dedicated team consisting of 10 members to enforce regulations related to short-term rentals. In addition, Supervisor V. Manuel Perez will designate $350,000 to support the staffing needs of the department.
Elsewhere on Skift
The Ozarks, specifically the city of Branson, Missouri, has been associated with a dated and kitschy image due to its past development with large hotel chains and tourist attractions. But the team behind The Ozarker Lodge in Branson aims to challenge this perception.
The boutique hotel, opened on June 30, is designed by Longitude Design, a consultancy based in Springfield, Missouri. The team believes that the Ozarks is not solely defined by stereotypes and aims to bring fresh ideas to the area. Jeremy Wells and Dustin Myers, partners at Longitude, decided to venture into hotel ownership to showcase a different side of the region.
“These Missouri hotel innovators asked themselves: What should thoughtful, modern hospitality look like in the Ozarks? The verdict is still out on their just-opened boutique hotel. But their approach offers a peek into current trends in design thinking.” writes Leslie Barrie of Skift.
The Boutique Hotel Trend Arrives in Branson, Missouri
Skift Short-Term Rental Reporter Srividya Kalyanaraman writes the Skift Short-Term Rental Report. Send news tips to [emailprotected].
