How might the pandemic change the home-sharing landscape? This question hits a little too close to home for my liking, as I’ve spent much of my quarantine begrudgingly living in the cheapest short-term rentals I could find. It’s given me a not-so-luxurious vantage to watch the market leader, Airbnb, stumble through issues ranging from optional cleaning protocols to angering many of its 700,000 hosts over changes to its refund policies.

Making Airbnbs my full-time residence was, of course, not what I’d envisioned for 2020. Months before such phrases as “social distancing” and “flatten the curve” were lodged in my lexicon, my partner and I had sunk much of our savings into our move to Berlin. We’d sold most of our furniture, stowing a few antiques and keepsakes in a small storage unit. Then a mere four days before we were to turn over the keys of our Portland, Ore., apartment, the European Union announced the closure of its borders to nonresidents, instantly canceling our plans and leaving us without a place to live.

We decided to float for several months on our credit cards, hopping between a few Airbnb rentals that had become more affordable as demand dried up. In that time, I’ve seen the platform built on connections with locals pivot to close-to-home isolation — a shift from its “belong anywhere” messaging to “get away, without going far,” as a recent Airbnb app notification read.

While the tech company, which received a $1 billion cash infusion in April, can quickly refocus its operations, many of the hosts who helped drive Airbnb’s growth don’t have an easy Plan B. With mortgages to pay and properties sitting vacant, they’re now struggling to survive.

Airbnb pivots toward a few bright spots

At the outset of the pandemic, the numbers looked bleak across the board. In March, European short-term rental reservations had dropped by as much as 80 percent, and revenue was down by more than 50 percent in American urban destinations like New York City, San Francisco and Seattle, according to data from analysts at AirDNA. By April, Airbnb’s valuation had taken a nosedive to $18 billion, nearly half of its previous high of $31 billion. And in May, chief executive Brian Chesky announced the company was laying off 25 percent of its workforce.

Major news outlets were quick to question whether Airbnb and competitors like Austin-based Vrbo and Portland start-up Vacasa could weather the storm. But researchers think the concern may be overblown for Airbnb, which has cash reserves and a near-monopoly on the U.S. vacation rental market. “I think it makes for a good headline, but when you look at their fundamental business model, there’s still a demand for the product,” says Makarand Mody, assistant professor at Boston University’s School of Hospitality Administration. Recently, Mody has been researching the key decisions that might make a traveler choose to stay at an Airbnb over a hotel. He believes the platform may have a leg up on the lodging competition.

Cleanliness is the obvious concern for travelers, with both hotels and rental companies emphasizing their new rigorous cleaning standards. In my searches, I’ve seen hosts getting clever, too, advertising their sanitation routines and offering hand sanitizer to guests. Some health experts are giving short-term rentals an edge since you can more easily avoid crowded indoor spaces. “In a hotel, it’s inevitable that you’ll have more interactions than at an Airbnb,” Thomas Russo, chief of the infectious-disease division at the University at Buffalo, recently told MarketWatch.

The sheer diversity of the short-term rental market, in terms of rental type and location, is proving to be its competitive advantage during the pandemic, Mody says. “Geographically, Airbnbs are so much more spread out [than hotels],” he tells me. “It allows you more control over the environment you’re in.”

The principle of Airbnb’s “Go Near” campaign seems to be resonating with cooped-up road-trippers. In March, AirDNA reported that the coronavirus was causing a boom for remote Airbnb properties, despite dismal performance in more urban areas. Bookings had rebounded by late May, seeing a 20 percent year-over-year increase. While new bookings across rental companies have again trended downward from a mid-June peak, driving-distance getaways remain a hot commodity. Of the one million nights that Airbnb guests booked on July 8, more than two-thirds were for destinations outside of cities, according to the company’s own data.

“Single home rentals are generally perceived as a safer option for avoiding airborne viruses,” Tom Caton, co-founder of AirDNA, wrote in an email. Caton’s team has found that beachside destinations, mountain towns and lakeside getaways have led the national rebound, with states such as West Virginia, South Dakota, Oklahoma, Arkansas, Wyoming and Delaware seeing the biggest boost.

“Airbnb is much quicker to understand what’s happening with customers, what’s happening with the environment and pivot toward these opportunities [than hotel companies are],” Mody says. “Essentially. Airbnb is a tech company and they use data so much better. They’re extremely nimble and that’s been one of their strengths all along.”

Cash-strapped hosts get hit hardest

Born in the Great Recession, Airbnb was once dominated by micro-entrepreneurs renting rooms as side gigs. But the scene has become significantly more professional in the past few years, with a notable rise in multiunit hosts prompting some hospitality academics to ask whether the platform even fits the “sharing economy” label anymore.

Today, more than 60 percent of Airbnb hosts have two or more listings, according to a November paper co-written by Mody and published in the Tourism Management journal. These pro hosts, who often purchase residential property to convert into vacation rentals, have been responsible for much of the sector’s growth in recent years.

As Airbnb refocuses its messaging to support subsects of its marketplace, it seems to be creating islands of demand, potentially leaving hosts in the pandemic’s less-desirable locales to fend for themselves. To aid struggling hosts, Airbnb awarded nearly $17 million in relief grants, though the program’s criteria excluded most professionals, as only hosts with two or fewer listings were eligible to apply. In April, hosts criticized Airbnb’s $250 million reservation refund program as little more than a publicity stunt, as it only paid hosts 25 percent of what they’d normally receive. And Airbnb’s latest campaign encouraging travelers to donate to hosts has only sparked further backlash, with many users taking to Twitter to call out the company’s tone-deafness in asking travelers to financially support their vacation landlords.

These pro hosts face the same challenge as independent hoteliers: What do you do with your expensive-to-maintain properties when revenue slows to a trickle? Slashing prices and moving away from the short-term marketplace seems to be the trend, with AirDNA reporting an uptick in mid- and long-term stays across the industry, though it may not be sustainable for long.

In March, when I first searched through hundreds of Portland rentals, I noticed multiunit hosts were offering eye-popping discounts for long-term stays, as high as 50 percent or more off the nightly rate for month-long reservations. In fact, our quarantine rentals on Airbnb often ended up being slightly cheaper than the monthly rent of our previous apartment. When the checkout dates neared at two of our rentals, I got similarly desperate-sounding calls from both hosts asking if we’d like to “take things off Airbnb” and stay for another month.

“These hosts still have mortgages to pay on those homes, but they’re not making the revenue they otherwise would have through Airbnb,” Mody says. “Airbnb has definitely been worried about hosts leaving the platform.”

So far, the short-term rental supply has remained mostly stable, though some analysts predict forbearance woes and uneven demand might push some indebted hosts to give up — especially if the fall brings a big wave of coronavirus cases. “This lack of travel and tourism is already causing Airbnb hosts to slash their prices by more than 80% in some cities. If this goes on for much longer, a lot of these cash-strapped hosts will be forced to sell their properties,” financial analyst Austin Hankwitz told Money magazine in May.

And historically high rates of unemployment and soon-to-expire federal stimulus may further exacerbate the troubles pro hosts face — driving many Americans onto marketplaces like Airbnb to try to make extra income, repeating a trend from the last economic downturn. “We expect that listings will grow as more people look for extra income … and [we] think that demand won’t catch up,” Caton of AirDNA wrote. “As such, we should see cheaper prices and bigger discounts on monthly rentals.”

That’s good news if you are also forced to move into an Airbnb for a few months — not if you’re a host nearing a fiscal cliff. In this way, the pandemic reveals the harsher realities of the home-sharing marketplace: The venture-backed tech behemoth has cash reserves and little bricks-and-mortar skin in the game, so they seem sure to endure the pandemic. As for the little guys, they have all of the rent to pay.

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