Is the short term rental market decimated.

[Robin4]

Here in Australia we are seeing an immediate effect to the direction Airbnb have taken in dealing with the COVID-19 pandemic.

The rental price of long term rentals is plummeting as masses of STR properties are coming onto the LTR rental market. 

I don't know if overseas searches can open this link but, it gives an indication of what is happening here in Oz.

https://www.domain.com.au/news/australias-rising-rental-market-short-lived-as-coronavirus-affects-pr...

Domain specifically mentions, the collapse of the Airbnb market is driving properties into the LTR  rental market leading to a significant fall in rental asking rates.

Airbnb are on a particularly slippery slope here! Their attitude to short term gain is going to lead them to long term pain as masses of their hosts desert them for a more stable source of income.

I would hope it is not too late for Airbnb, but I fear it is, you can only bite the hand that feeds you for so long.

Cheers......Rob   

[Anonymous]

@Robin4  Do you think we'd be looking at a different phenomenon if Airbnb had handled this crisis better?  

Globally speaking, most sectors of the travel industry have suffered severe losses if not outright collapsed. I don't know what's going to happen to big hotels, as they can't be easily repurposed for local residents in a diminished tourism market. But more affordable home prices is an adjustment that's been desperately needed in every city where the rise in rents has outpaced wages or become altogether decoupled from them. 

At this point I think Airbnb's survival will depend on whether it can shrink itself down to the size of the market. From the outside, though, it often looks like they've foregone any antifragility measures and instead pumped more and more hot air in their balloon to make it bigger and bigger and bigger....

[Robin4]

@Anonymous 

Actually I do Andrew,  hosting sentiment is not having the effect on other platforms that it is having on Airbnb. Of course the entire travel industry is suffering, as you say severe losses, but I do think the prudent operators consolidated themselves as they went along.

It's one thing embarking on an all out recruitment drive with tentacles of enticers to build business, it's another to sustain the results of that concerted drive. Airbnb spent in excess of $100 M in advertising last year! That is 6 times as much as they have offered in their Superhost assistance package.

Airbnb have behaved as the petulant brash teenager in the STR industry rather than the mature experienced college graduate. 

Hotels are hotels, their bricks and mortar are designed for one thing only....they have to stick it out!

I remember on a trip to Hawaii in August 2009, just after the financial melt-down of 2008 when nobody was travelling. Andrew, we stayed in an resort in Hilo on the Big Island called the Naniloa. The resort has 397 rooms  of which 25 were occupied at the time we were there. I said to one of the chiefs...."How can you possibly stay open in conditions like this"?  He said, "We are giving it 18 months, we have enough capital to keep our heads above water for that amount of time"!

Prudent managers prepare for the worst and protect their asset.

So Andrew, I do think Airbnb could have handled this a lot better. What they have done is prove to their hosts that they are on their own.....and as the rental market is showing here, a very high percentage of hosts feel that is not acceptable and they are moving on! 

Cheers......Rob

[Dimitar27]

In investing, lowering the price by 10% is called "correction".

It's not a disaster, catastrophe, cataclysm or calamity. It's a regular process. 10-20% lower this year, 5% rise next year, 10% after 5 years...

Many people will see a shelter in the LTR market. But after 1 or 2 years, they will go back to the STR.

[Melodie-And-John0]

@Robin4 , Rob, usually I tend to agree with the things your saying and thinking here but I think on this one, @Dimitar27  has the right idea.  Fear will drive and flex the market today but profit potential from the second oldest industry, Inn Keeping and its derivatives will once again propel it to new heights when we have beat down the virus and folks fear factors get closer to min than max.  I hope Dimitar is correct Robin, we all need that to be the case, stay well, JR

[Robin4]

@Melodie-And-John0 

John it may be that @Dimitar27 is correct but, we need to send all the ammunition we can back to the halls of power to make them understand, we as hosts are not simply cannon fodder.

I am trying to get in place a better Airbnb, the company have been great to me, I have been like a fish out of water this past month without a steady stream of new faces to bullsh*t to!

I hate being patronised and that is what Airbnb are doing , they are patronising us.

The more we can illustrate to them that their business is in jeopardy, the more they might be prepared to show a conciliatory face, and actually listen! 

Airbnb may spring back, but I don't want to see them spring back the way they are, we deserve a bit better than this!

Cheers......Rob 

[Helen427]

@Robin4 @Anonymous @Dimitar27 @Melodie-And-John0 

We have had similar types of articles appear here in New Zealand in our media.

On talk back radio they were talking about it tonight as well.

To be honest I think you will find borders will reopen soon as no country can survive on it's on.

Some European countries are already allowing greater travel.

You may also find that challenges as to the legality of the lockdowns world wide in Courts of Law will have an impact on things as and when those cases are heard.

European Union Courts of Law gave a directive to ensure Europe adhere with the law & address matters in accordance with the law & expeditiously. In other words no mucking around & stuffing up the economy or the health of all people.

The longer the lock down the greater the fallout...

I understand Norway had not planned or intended on closing borders and it was not in it's pandemic plans from last year.

One of there representatives was interviewed on BBC today about the situation in Norway & wider world and  mentioned the economic impacts which most unfortunately some people failed to factor into account.

There's an airline operator in the UK  challenging the validity of it of the lawfulness of various matters which is worth while looking up & following.

Airlines have been seriously impacted on and are our friends... They transport our guests..

Do remember Australia is a Commonwealth country as are 52 other countries who have the Queen as our Head of State.

Since when have we had no laws???

Keep smiling folks all will be back up & running with STR & LTR as we have known it.

Ask any young person who had planned to travel internationally how they feel about closed borders...Thank goodness we are in election year.

[Robin4]

@Helen427 

Hey Warriors, Tamworth here we come!!!!

It's started already Helen.

https://www.abc.net.au/news/2020-05-02/coronavirus-new-zealand-warriors-nrl-australia-travel-permiss...

I went down to the city today and it looks very much like business as usual, all the shops except cafes open. Did not see one person wearing a face mask.....God knows what the state government is going to do with that 60 million masks they bought two weeks ago! We are down to 6 active cases in the state tonight and 3 of those are in hospital and the remaining 3 in isolation. We have had 12 days with no new cases....until the borders open, it's a memory here!

I have opened my cottage up again as of Wed....but only for local from our state. 

You are right Helen, it won't be long before we are up and running again.

Cheers......Rob

[Helen427]

@Robin4They left Auckland on Sunday, only a couple of hours away from Tamworth NSW.

Our local main newspaper, The NZ Herald, editoris a lad from Tamworth, Murray Kirkness

He wed a local lady from the South Island.

Likes his sports & Horse & Greyhound racing.

Current charge of our beloved Warriors Rugby league team is from Tamworth to...

Small world, maybe they could build an underwater motorway between New Zealand & Australia to get our economies up & running...Those from the USA can take comfort then we are part of the same country...well except for those  here in CC who know different.

All the best,  guests be back in our nests.

[Melodie-And-John0]

@Helen427 , the ramifications of  the borderline or over the edge violations of rights and laws FOOG (For Our Own Good) is very concerning to me.  I never thought I would see the day heavy handed marshall law types of pressures and police state threats would be happening in my Nation and State, they are and thats disturbing.  This Lockdown situation has too much of an Orwellian aroma about it and scares me more than contracting the virus itself (which statistics are proving is really not a heck of allot more deadly than the flue, just more infectious),  Nanny state needs to go away with the virus and fast before they get too comfortable puppeteering all things on two legs! 

Back to the threads ask, Those of us that do this based on the original concept of renting extra space in our home have the best chance of living to fight another day (I mean rent).  Folks that grew big without protecting their investments against the worse case scenario may not be STH or even renting if they cant stave off bankruptcy.   I feel host survivors with Airbnb will be recognized for keeping the boat from sinking by the mothership and many will thrive in spite if not directly because Airbnb did the unthinkable, gave the money back to the customer for services that were not rendered.  Hope springs eternal, this might be overly optimistic and a bit naive but I think they will return to the places and service providers they perceive treated them like #1 instead of #2.  Stay well, JR

[Fred13]

Suppliers always move to fill 'empty' places if they are allowed to,  they are now running to where the perceived action is right now and probably worrying more on survival (just paying the mortgage) at this point than expecting a profit (a luxury right now). 

As people start traveling again, only then the STR side will experience 'demand-pull' again (demand exceeds supply) and that is when the STR side will return back to 'normal' (aka the way it just was).  Those STRs that stay put (and can last till then) will be sitting well because many of those host that went to the LTR magic kingdom are now stuck with long-term low-paying clients. This advantage will last for 6-8 months, and then the returning horde of ex-STRs will be back en masse, they just miss the high STR money too much.  

Supply & demand, always in a state of flux; Airbnb has very little to do with it really, they are just the enthusiastic advertising agency championing the cause of the latest 'hot' sellers. 

Airbnb will do just fine since it can afford to loose 1/3 of its STR hosts that can more than accommodate the temporary 2/3 of STR demand, which will last the rest of this year. In the meantime Airbnb should clean their own house: remove nerdy administrative thinkers that have no clue on the real world, drop the Host Guarantee hoax, drop deadbeat hosts that border on the absurd, and whip their much-too-chaotic CS department by turning it into a new Instant-Response email system, run by knowledgeable quick thinkers that can write and express themselves well, and answer any e-mail within 5 minutes, no excuses.   

[Helen427]

careful @Fred13  with those instant reply emails, they need to make sure they are not text book, or copy & paste the same one blanket fits all answers..

Great comments once more from the host in wee island...from another on a larger island 🏝..

Hope it's not too quiet for you there as it's a huge adjustment not having people coming & going when it's one's livelihood.

[Fred13]

Love the island icon, I am always looking for cool things like that, but never find them.

I know, my Instant Reply  suggestion is highly dependent to indeed on a new competent and honest CS  personnel. The incessant high-maintenance phone situation that is now present is really absurd. People need quick and helpful communication. 

[Melodie-And-John0]

"People need quick and helpful communication", words to live by @Fred13, That might be my biggest gripe with Airbnb, the communications could and should be better for both hosts and guests.  Not saying I need 200 more automated emails, just saying every communication is both important and timely when your hosting guests or traveling as one. Comprehension due to mastering of the language of the person your speaking with is paramount and not always consistent, its a tough challenge for global coverage but necessary especially in this business.  I have never personally been put off or treated poorly  by the Airbnb CS/HS system but have heard some horror stories here.  Hopefully they will continue to build on and make better the offerings that have been their benchmarks and maybe back off a bit on the new shiny objects they are launching that are much less cross platform concerns.  

[Fred13]

Imagine a quick, informative, honest email response system on any situation and the department run by bright, quick-minded talent not some phone-answering slugs that are there to 'field' calls, nothing more. This will also create an instant paper trail to all situation. No opinions, venting, or having to deal with  peripheral emotions. 

If the issue needs to move to a phone conversation, the handler will call the host; but having hosts wait 30+ plus minutes and having to call 10x to resolve an issue, hosts & CS personnel getting pissy with each other, etc etc  - the whole scene is nuts. No form letters allowed to be used by the CS personnel, it must be an original response and that will force them to actually address the specific question or issue. 

Personally, I never, ever call a guest, nor even answer calls; I instruct them to email. On the other hand  I answer all inquiries fast and decisively, if there a decision to be made, it will be done in 2 nano-seconds.