Real EstateJun 28, 2023
The Aftermath of the Pandemic Short-Term Rental Boom: Too Much Supply and Collapsing Rental Revenue
Hospitality Correction
Victor Lei
Discover
The post-pandemic bust is claiming another victim: Airbnb hosts.
Short-term rentals boomed during COVID — driven by lockdowns and a surge in remote work. But oversupply has led to what some have deemed the “Airbnbust.”
Since the end of last year, several hosts began seeing bookings drop significantly — with many operators seeing revenue falling as much as 50%.
But cities with strict short-term rental rules that limit supply have held up stronger.
The downside: As losses build up for property owners, Reventure Consulting’s Founder Nick Gerli expects the slowdown to lead to a spike in short-term rental properties being put up for sale.
The upside: For others, a surge in sellers might not be so bad — helping lower rental prices while adding more supply to a tight housing market.
Short-term rentals in the US reached a record high in 2022 — along with a monumental year for Airbnb — whose 2022 revenue was 75% higher than 2019 levels and reported its first profitable year.
But even Airbnb is starting to feel the impact — warning that bookings would be lower in the second quarter compared to last year — with pressure on average daily rates.
Per Destination Big Bear’s president, homebuyers in recent years paid 30-40% more while expecting the same increase in short-term rental revenue — “and that’s just not happening” (Insider).
