I came across the term ‘Airbnbust’ and the discussion of the future of short term rentals when reading about host troubles online. It only takes a quick search to find endless social media posts sharing poor experiences. Lots of them involve the Short term rental market in general coupled with the #airbnbust hashtag.
It’s a term used by both hosts themselves as well as guests using short term let platforms to share their frustration at what the market has now become.
Airbnb is synonymous with greater adventure, allowing travelers to truly experience the world outside of a hotel room. The brand itself operates in over 190 countries worldwide with over 7 million reported properties on it’s platform alone.
A meteoric rise
With the meteoric rise in Airbnb’s success in popularity and influence over the Short term rental market, it’s no wonder that critics all over the world are seeing this and expecting the bubble to burst.
The same thing happened with the dot com and Bitcoin booms for example, why should Airbnb be any different?
With an estimated value of $113 billion dollars and a name familiar to most, it’s grapple on the industry and us as consumers is clear. It’s hard to see this collapse happening anytime soon.
But as with any new groundbreaking company or technology, flaws and necessary laws only become apparent once the growth is brought to the masses and the issues become apparent.
It’s hard to deny the visible influence Airbnb has had over the travel and tourism industry. It’s proven itself as a threat to hospitality as a direct competitor to hotels. Airbnb has given travelers more choice, experience, privacy and greater convenience than ever before.
Now, guests can rent properties in the heart of communities. These unique stays can be off the beaten track to fully immerse travelers in their destination as authentically as possible – by living in the home of someone who lives there themselves. No longer is a traveler governed by purpose built commercial accommodation in set locations, such as hotels.
This appeal and charm has largely been part of it’s success. As well as being coupled with a technology based generation’s desire for uniqueness and standing out.
How often have you heard someone suggesting ‘getting an Airbnb’ for a trip? ‘Airbnb’ now refers to any short term rental property, even if it’s not from that particular platform.
The brand has given us more choice than ever before and changed the way we travel.
A changing platform and industry
As a host this is actually a topic I’ve wanted to discuss for a while. When making the decision to host my property, I did wonder if I’d missed the boat entirely. I wondered if I could make a profit or even be able to make any success of this.
In the short years I’ve been hosting, I myself have noticed a big change on the platform. Mainly due to a huge increase in competition as hosts either get favoured or dropped within the algorithms.
Airbnb seems to favour reliable superhosts (as I think it should). And even then, I had noticed quieter periods where I may have fallen down results from the first page on occasion.
Despite this, I would consider the time I have spent hosting very successful, and I will continue to do this for as long as I can.
So what does the future hold for Airbnb and short term lets in particular?
Before I became a host myself, the concept of sharing my home with a complete stranger was incredibly alien. The idea made me almost grimace with discomfort. In part from a safety point of view, but also because of a cleanliness concern.
I wouldn’t want to stay in a strangers home not knowing how clean or comfortable it would be. The ‘gig’ economy has relied on a feedback based system to weed out bad contributors to whatever industry it’s applied to. The same goes for Airbnb which relies on reviews of both hosts and guests equally.
In it’s early days way before I joined, Airbnb was largely focused on the community aspect of the platform. It’s appeal was the social aspect of travelling and staying in the home of a host, with them.
In its infancy hosts could lay out a blow up mattress in the living room or make up a bed for you. This in effect was truly be the definition of a good host. The emphasis was more on socialising and community.
These kind of hosts still exist on the platform today and they make up a large part of the community. However the influx of full unit rentals has really grown the platform into what it is today.
Now you can rent whole properties from studio flats to multi million dollar properties. The transactional aspect of the site and app has become faceless. Today Airbnb is essentially two different models. One is staying within a host and the second and larger part of the business is short term rentals.
The rise of horror stories – Bad hosts, dirty properties and spying.
We’ve all heard the Airbnb horror stories that circulate online. Most include guests being inundated with chores and cleaning expectations by hosts. Or the issues of hidden recording devices implemented by hosts and invading guests privacy.
I don’t doubt that instances of recording have occurred and been reported but a large part of me personally wonders if this is largely more of an urban myth that’s snowballed from isolated cases because it’s a fear than many people would share. I could be wrong, but I hope that’s not the case. According to MSN though, its a big problem.
We’ve also all seen the nightmare Airbnb stays in dirty or misleading accommodation.
My bad experiences
I myself have stayed in a property with good reviews only to let myself in and experience the very definition of a slum property.
What was advertised as a 1 bedroom apartment was essentially a room converted into a studio flat. This studio flat itself was within a 2 bedroom property.
It was evident that it hadn’t had a proper clean in months. I also realised that the other guest renting the other “studio flat” within our shared apartment was using it to work from. The noise from the men entering and leaving the property and doors slamming kept me awake all night with no regard for noise.
The property was full of broken item as well as poor amenities. By the end, the whole experience left me feeling ripped off and let down by the platform. Needless to say, I checked out early.
On the flip side, some of the best trips I’ve ever had, have been through using the Airbnb platform. Being able to stay in properties and locations I never could have dreamed of. Out of the numerous bookings I’ve made, it’s only that one that I ever had a problem with. That one (described above) was spectacularly bad.
If it was my first time using Airbnb, it would have put me off for life. I did wonder if the host had faked some of their reviews in order to stay on the platform.
I usually find, that bad hosts don’t last long. A few months after going back to check the hosts profile, the listing had been taken down.
Overpriced listings
Airbnb used to be cheaper than hotels which was part of it’s appeal. Staying on an air mattress would inevitably save travelers a fortune.
Today, with nightly charges and cleaning fees a hotel is often the cheaper option than some Airbnbs and good deals can be harder to come by.
There have been many screenshots posted online of extortionately high total prices. These include huge cleaning fees as well as ridicule by those looking to book.
Online, most of the Airbnbust posts chalk it up to host greed. However I actually think it’s a mix of balancing greed and offsetting risk. When you rent your property out there is undoubtedly a considerable risk to yourself, your possessions and your property.
Damages in a short term rental seem to occur more than from longer renting tenants which I think is to the high volume of traffic with less regard for their responsibilities as good guests.
It’s no wonder that hosts want to make sure it’s worth hosting and not costing them more in repairs or property wear and tear.
Whilst I can’t defend greedy hosts, guests can always vote with their feet and choose not to vote. Overly expensive properties will eventually drop their prices if they don’t get booked.
If a host is getting bookings and it’s working for them, why would they drop their prices?
Over-saturation: a competitive market
When I first started hosting, there was a reasonable handful of properties in my town. This invluded both for single bedroom bookings with a live-in host and full property bookings.
When I listed my property, there was nothing like mine available. I might sound biased but I had my listing and property vastly more professional than my neighbouring competition in town. Both my hosting style, amenities and decor was considerably more professional. And because of this, I got bookings very quickly.
Keeping up with high competition
It wasn’t long before I became a superhost and got into the swing of hosting. I got so into hosting without issue that I probably got a little too complacent and expected these bookings to continue.
About 2 years in I noticed quieter periods (which I put down to economic issues during the COVID-19 Pandemic). After checking, I had noticed that I’d drifted onto the second page of searches and that there was a huge influx of new properties, with some that gave mine a run for it’s money.
The majority however still weren’t as good as mine, I was just getting a bit lost in the search. Coupled with worldwide economic issues I think both had led to my dip in bookings.
I adjusted parts of my listing and took advice from other hosts regarding techniques for staying on top. An after that I shortly found my way back to the top of search results again.
I would say, if you planned on hosting now you either need to drop your price to get booked and accept a lesser offer or increase the appeal of your property so that you out compete the other properties on there.
As I’ve said before, good properties and good hosts will always out-live the casual Airbnb hosts that aren’t as professional or aren’t as invested in running a business via the platform. It’s this sheer amount of filler on the site that can cause hosts like myself to miss out.
Degradation of community – nuisance behaviour and lack of housing.
Airbnb boasts over 7 Million properties world wide. Just seeing all of the properties available at a given time in London alone shows how huge the platform is.
Property owners looking to maximise their investments are realising that more money can be made right now renting with a short term let model rather than longer tenant lets.
In my area, I can easily rent for £800 a month with long term rents or over £120 a night for short term lets. That in itself is a no-brainer. It’s no wonder that so many owners are joining the platform.
Loss of community
But what happens when a huge number of properties in prime locations suddenly spring up as short term lets? There have been a number of coastal communities which have turned into ghost towns from the sheer number of short term lets.
Local businesses owners have struggled to survive outside of seasonal peaks. This is caused by the steady stream of local residents leaving and being replaced by short term lets. In term this has changed to an influx of seasonal tourists only to die away during the rest of the year.
The sense of communities and neighbours has been lost to strangers staying for just a few days before new strangers move in. With no long term homes, the short visits mean that guests and tourists generally don’t have a sense of responsibility to the communities they visit.
As such, they aren’t going to care about the upkeep of the locations they are visiting. Partly due to the fact that they won’t be staying for long. This leaves local residents affected by litter and noise disruption in particular.
Secondly, because the short term model has been so profitable and with such little restriction to prevent it, savvy business owners have been buying up potential homes and turning them into holiday lets.
This has further exasperated the housing crisis in a given location, particularly here in London.
The prospect of regulation
I honestly don’t know how I feel about the desire for regulation and restrictions when it comes to short term rentals. I know they already exist in most cities to curb the housing shortage problems.
Cities have imposed rental limits on properties. For example Airbnb have imposed responsible hosting restrictions on London properties. This means properties in London can only rent for just ninety calendar days per year.
I’m not sure how a property owner would be able to generate much of a profit on a 3 month renting window for the entire year.
It’s no wonder such restrictions have been put in place. In 2020 & 2021 London was ranked the #1 city with most Airbnb listing, surpassing both Paris and New York. In those same two years it was also the most popular city to visit on Airbnb by demand.
Before this, the lack of restrictions has allowed the market for short term let to grow at such a huge rate. Airbnb has been described as very much a ‘wild west’. With it’s inception it was a new territory of rental style and practice for the masses.
This free reign has allowed Airbnb to influence and shape the short term let market. In turn it has made the STL market what it is today – for better and worse.
Summary
Do I think that the ‘Airbnb bubble’ will burst anytime soon? No, far from it.
This may read as a damning article criticizing Airbnb and the short term rental boom we’ve experienced, but I fully believe that in the long term, the market will right itself. This includes eventually fixing its affects on communities and the housing crises.
If business owners buying up properties can no longer make a profit due to over-saturation, the business model isn’t very attractive anymore. This itself is not the fault or Airbnb.
The same goes for expensively priced properties. No bookings for hosts, means no money. Eventually they’ll have to drop their prices or give up hosting, reducing the number of properties on the platform.
As well as this, we as hosts have a joint responsibility with the platforms we list on. We all must ensure that our short term let isn’t affecting our neighbours, by properly vetting our guests. I’m tired of bad hosts not doing this and have been on the receiving end as a neighbour to another Airbnb rental.
Looking to the future
Airbnb has become a default option worldwide as an alternative to traditional tenant renting. It is so popular now that it’s definitely a very crowded marketplace to join. However, you still can make a success of it.
As I’ve said earlier – good hosts will out last poor hosts. But success on Airbnb requires two things. You need to be a stellar host and you need a good property offering to match. That to me is what makes a successful host that will be able to survive any eventual ‘Airbnbust’.
Despite the several bad experiences I’ve had as both a host and a guest on the platform, these have been virtually insignificant when compared to the positive experiences I’ve had, the money I’ve been able to make to support myself, the people I’ve met and the great experiences I’ve had in locations around the world. For that, I owe Airbnb a lot.
I don’t doubt the industry has a long way left to go, whether regulations are introduced or not. And I personally hope Airbnb and the short term let industry is around for a long time.