17 Apr 2020
Posted in Travel & Tourism
Airbnb could lose significant portion of host community to long-term rental sites
Airbnb hosts around the world have been losing the vast majority of their bookings in recent months, many of them need a reliable form of income sooner rather than later. A growing number of hosts have deleted their Airbnb listings to make way for month-to-month leasing says GlobalData, a leading data and analytics company.
Ralph Hollister, Travel & Tourism Analyst at GlobalData, comments: “Former Airbnb hosts are now listing their properties on longer term rental platforms. In the US, hosts are using listing services like San Francisco-based month-to-month rental service Kopa and Austin-based full-home medium-term rental platform Homads. The worry for Airbnb is that hosts may not return to the company when the impact of COVID-19 lessens”.
Jack Forbes – CEO of Kopa, stated that rental sites such as Airbnb have an average annual occupancy rate of under 50%, whereas sites like Kopa aim for an occupancy rate of 95%. This may explain the growing allure of long-term rental sites, as they offer higher levels of reliability and security.
Hollister continues: “According to GlobalData’s survey, 51% of Americans are extremely concerned about the COVID-19 outbreak, and 77% are expecting the situation to worsen in the next month. This may explain why hosts in the US have been so quick to state their loyalty elsewhere in order to boost their income.”
Usually, when a guest cancels on Airbnb, hosts receive some compensation, but Airbnb created a policy whereby hosts are forced to give refunds to guests cancelling due to the pandemic, leaving many hosts feeling betrayed by Airbnb as the company left them to fend for themselves.
Hollister concludes: “Due to a significant amount of financial loss mainly due to COVID-19, Airbnb received a US$1bn vote of confidence from major Silicon Valley investors. The new funds included US$5m towards special relief grants to head off growing dismay among hosts. However, this dismay may have already tipped many hosts over the edge, resulting in a permanent loss of loyal users for the company.”