“I was booked solid until the end of July. Suddenly, everyone cancelled.”
Jennifer, a frequent Airbnb host in Clinton Hill, Brooklyn, NY tells a now-familiar story. As a professor at New York University, she planned to use her additional income to fund a summer trip to Sweden. For many other hosts, the consequences of the COVID-19 shutdown have been more dire.
The tourism industry — including hotels, airlines and short-term rentals — has been blindsided with the swiftness of the coronavirus-induced economic collapse. According to AirDNA, Airbnb lost 43,000 properties from their site from January to March. Though the loss of income has been painful, many hosts have not chosen to pivot to conventional long-term leases. “It’s not possible if you were just renting a room and don’t have kitchen,” says Mark, an Airbnb Super Host, who owns a brownstone in Crown Heights, Brooklyn, and saw thousands of dollars disappear overnight. “Also, people are losing their jobs. It’s not like there’s a great tenant pool out there. Frankly, with the spread of the virus, I don’t want strangers coming into my home.” Airbnb’s own data in Nashville, New Orleans, Honolulu and Savannah backs up Mark’s statements, with only 2.8 percent of short-term rentals taken off their site and reappearing on the long-term rental market in those cities as of March 27th.
Another factor is the unpredictability of the crisis. If it ends quickly, Airbnb landlords would prefer to get back to hosting, where they can earn 3-5 times as much money as with a conventional lease, without being beholden to a long-term tenant. Austin Mao, an Airbnb host with 2,000 guests a month in his network of Las Vegas mansions, told the New York Times that he has steadily been forced to cut prices as visitors dwindle. At their peak, each of his homes had been bringing in $10,000 a month, with overheads running at $3,500. The profitable business allowed Moa to expand quickly, starting a construction firm to renovate future rentals. Like similar companies, that firm is now shut down. “I believe this is a harbinger of the next great recession, so I think it’s risky to expand,” he said.
One area that is seeing a boom in Airbnb rentals are smaller rural towns within drivable distances from urban hubs, particularly New York City. Alix Umen and Adriana Farmiga own the Starlite Motel, a recently restored vintage motel in Kerhonkson, N.Y., that had been attracting a steady stream of visitors from New York City, about two hours away. They were recently forced to temporarily close the motel due to COVID-19. However, they have seen a spike in traffic in New Yorkers waiting out the virus in nearby Airbnbs. “It’s easy to spot the New Yorkers in a place like this,” says Farmiga. “They have nice cars, they’re out jogging and walking. But it can really overwhelm a small town.”
To illustrate, Umen expounds. “There’s a local butcher who serves grass fed meat. Within a day or two, people had come in and totally bought him out because they are hoarding the food, which of course means locals won’t be able to buy from him. We understand that it’s good business for people who are renting their homes and apartments but I’m not sure it would be the most conscientious thing for us to do,” she says.
It’s a sentiment shared by many hotel owners around the country who have shuttered their doors while surrounding Airbnb’s have looked to profit from fleeing urban dwellers. “I think it is reprehensible,” says Jeff Bridges in Guerneville, Sonoma County, Calif., who spent a million dollars renovating his R3 hotel after flooding last winter. Now he is seeing Airbnb hosts marketing their rooms with “pandemic discounts” and as “quarantine-ready accommodations,” catering to the exodus of residents from San Francisco, about 1.5-hours to the south. “That is irresponsible if you are coming from an epicenter. That makes a lot of residents uncomfortable,” he told ABC News.
Fortunately for Bridges, the authorities in Sonoma County agree with him and are enforcing a shut-down of all Airbnb’s in the area, though it remains to be seen if that will happen elsewhere.