The short-term rental industry has turned a corner, perhaps just in time.
Airbnb occupancy rates in the U.S. are up 17.1% in May compared to a month ago, but down 15.6% year-over-year, according to new data by AllTheRooms Analytics, a New York-based short-term rental analytics company.
“People are still very optimistic about their ability to travel,” said Omer Rabin, managing director at America at Guesty, a California-based short-term property management platform. “Immediate bookings are really jumping, so we are on the way to recovery, especially as beach towns and other locations open.”
From now until mid-August, bookings are at an average 41.3% occupancy, up 18.3% compared to a month ago, but down more than 20 percentage points from this time last year. There were 592,000 bookings in the U.S. the week of May 11, compared to only 254,000 bookings the week of April 6, according to AirDNA, a short-term rental data and analytics company based in Denver, Colo. Even though bookings are down from last year, it was the fifth consecutive week of year-over-year improvement, according to AllTheRooms Analytics.
In the U.S., the markets seeing the fastest recovery post-lockdown are small-town, drive-to tourist destinations in states pushing for lifted restrictions. In Georgia, Texas and Arizona, which were among the first to lift lockdown restrictions in early May, occupancy has increased between 22% and 30% in the past 30 days, higher than the 17.1% national average, according to AllTheRooms Analytics.
Over the past month, bookings in the Catskills, the Hamptons, the Hudson Valley in New York, Napa Valley and Sonoma Valley have done particularly well, with renters hiding out for an average of two to four weeks, compared to the average of one to two week bookings in those locations, according to Guesty.
Big Bear Lake in California had a 2,266% increase in bookings the week of May 18, compared to when the rental market hit rock bottom the week of April 6. South Padre Island has had a 1,241% increase in bookings, and Carolina Beach, Ocean City, Myrtle Beach, Galveston, New Braunfels, Lake Havasu City, Corpus Christi and the Gulf Shores all ranked between 500% and 1,000% growth, according to AirDNA.
“People trust [the experience of] getting into the car driving three hours or so, getting into a beautiful, spacious house with a garden and a pool. They don’t trust airplanes so much,” said Rabin.
Meanwhile, cities like Dallas, New York, San Francisco, Chicago, Boston, Columbus and Philadelphia averaged 44% growth, according to AirDNA. Hawaii occupancy is still declining, down 0.7% over the last 30 days, according to AllTheRooms Analytics.
Meanwhile, Airbnb’s bread-and-butter states — New York, Florida and California — representing 36% of Airbnb listings, are recovering slower. New York occupancy is up 15.7% in the last 30 days, and in Florida, which only recently lifted its ban on short-term rentals, occupancy is up 13.7% in the last 30 days. And in California, where a lockdown is still in place, occupancy is up only 10.6%, according to AllTheRooms Analytics.
“Urban areas are performing less well. Again, that is not shocking. People are much more likely to go and rent a big vacation home on the shore than take their family to Chicago, Austin or a big city. Big homes with four bedrooms and a swimming pool are isolation-friendly and can be more appealing right now,” said Rabin.
Recovery might be too late
The 2020 holiday season is predicted to be robust, barring a second wave of the novel coronavirus. There are about 40% more reservations for November and December compared to this time last year, according to Guesty.
“That means people leverage the unused vacation days and flexible terms for booking out there, and want to see their family that they haven’t seen in a while,” said Rabin. “It might actually be a stronger season than last year, allowing vendors to cover some losses from this period of time.”
But for at least 74,000 Airbnb hosts in the U.S., a recovery may be too late — they have already taken their properties off the short-term rental-listing website, according to AirDNA.
During the coronavirus lockdown, Airbnb hosts were among the hardest hit in the hospitality industry. Some 16% report they missed or delayed mortgage payments, and hosts have lost an average of $4,036 since Covid-19 began to spread in the U.S. Some 45% of hosts say they won’t be able to sustain operating costs if the pandemic lasts another six months, according to a survey taken May 1-13 of 500 guests and 100 hosts by IPX1031, a qualified intermediary service and subsidiary of Jacksonville, Fla.-based Fortune 500 company, Fidelity National Financial.
Both hosts and guests are still uneasy. Almost half of hosts don’t feel safe renting to guests while 70% of guests are fearful to stay at an Airbnb right now. And 64% of guests either have canceled or plan to cancel an Airbnb booking since the pandemic started, according to the IPX1031 survey.
Meanwhile, Airbnb, itself, has been suffering. The company laid off 25% of employees earlier this month, and though they offered 7.4 million in relief to Airbnb superhosts, many hosts were excluded from the funds and complained of the company’s COVID-19 cancellation policy that gave guests full refunds.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
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