But will they get back into the one bedroom apartments in London or New York? Probably not.” “There will still be people chasing yield. “There’s a possibility that this business model – of master leasing properties, furnishing them and relisting them on Airbnb – is not going to be attractive for people now they understand how volatile this environment can be,” says Scott Shatford, CEO of AirDNA. And that leaves Airbnb entrepreneurs open to huge financial liabilities. The only problem? With no guests, there’s nobody to pay the rent. In YouTube videos and at expensively-priced private events, Airbnb entrepreneurs extol the virtues of this get-rich-quick scheme. The business model has created a rental arbitrage boom, especially in cities popular with tourists such as London, Paris and Barcelona. Many of those listings are also rent-to-rent properties, run by companies or individuals who take out loans to secure a number of properties on a long term basis knowing that they can get substantially higher rates by subletting them through Airbnb, and other online platforms. Both are key indicators of properties that are more akin to hotel rooms than sharing economy holiday rentals. Around 600,000 of those 1.1 million listings are also available for more than six months of the year.
Other cities may soon follow suit.ĭata from AirDNA shows that of the 1.1 million Airbnb listings in the US, some 600,000 are from hosts that have at least two other listings. In Prague, officials are using the pandemic to try and regain control over the burgeoning short-term rental market that has decimated the supply of housing available to local residents. For some, Airbnb’s folly is a potential fortune. With much of the world still on lockdown, those numbers are unlikely to pick up anytime soon. Revenue generated by Airbnb’s platform in March was down 25 per cent year-on-year, wiping out $1 billion in bookings. According to AirDNA, an online rental analytics firm, new bookings on Airbnb are down 85 per cent cancellation rates are close to 90 per cent. But as hosts rage and debt piles up, the huge weight of the coronavirus pandemic might be too much for Chesky to bear.
The 38-year-old former bodybuilder and Airbnb CEO has, in the space of 11 years, hauled his property rental dream from a single air mattress to a multi-billion dollar startup success story. Brian Chesky is no stranger to big lifts.