Before they became Exhibit A of a supposed “Airbnbust,” Carrie Ann Rink and her family were living a host’s dream in Southern California. They had an attractive property in a desirable area near Palm Springs with five-star reviews. Business was brisk amid the “revenge travel” wave of guests shaking off covid concerns.
Then May arrived, and bookings at the Desert Hot Springs home kept dropping off, despite the family’s best efforts: lowering prices, adjusting booking requirements and tweaking photos.
“It picked up a tiny bit in June, and it just stopped,” Rink said. “I think we went from 80 percent to zero.” In a Facebook forum for Airbnb Superhosts, her husband, Jim Ewing, posted a question that helped launch a viral tweet and a cycle of headlines.
“Has anyone seen a huge decrease in bookings over the last 3 to 4 months?” he asked in early October. Combining Ewing’s query with someone else’s lament, a Twitter user wrote: “The Airbnbust is upon us,” setting off an extended airing of grievances across social media.
Travelers piled on, too, sharing their own reasons for abandoning Airbnb: high prices, steep cleaning fees and a lack of service that stands in stark contrast to hotels.
Travel agent Cierra Chesir is among the disenchanted. The Milwaukee resident frequently turned to Airbnb in the days before the pandemic when looking to book her own solo adventures. But over the past two years, the onset of soaring cleaning fees and inconsistent standards for rentals has caused her to reconsider.
“I would say it’s a last-case [choice] for me now, when before it used to be like one of my go-tos,” Chesir said.
Industry observers say some hosts are seeing a booking slowdown, especially in markets that have become overwhelmed by short-term rentals. But despite the host and traveler complaints, overall bookings continue to grow as the company enjoys a banner year.
Fed up with fees
After the chorus of complaints peaked on social media, headlines like this one from BuzzFeed became routine: “Couple Says An Airbnb Host Expected Them To Strip The Beds, Vacuum, And Do Chores, Plus More Stories From People Who No Longer Use The Service.”
If some hosts’ bookings were down, was a fed-up customer base to blame? Some former fans couldn’t contain their glee over the misfortune of investors whose real estate gambles stopped paying off. “Why would I pay $73 a night to rent a BUS and then pay [a] $40 cleaning fee and a service fee,” one Twitter user wrote. “I cannot wait til they tank tbh.”
How airbnb still not learned its lesson? Why would I pay $73 a night to rent a BUS and then pay at $40 cleaning fee and a service fee. I cannot wait til they tank tbh.— “Rose” (@rosesburner) November 8, 2022
When Airbnb officially launched amid the 2008 recession, it was positioned as an affordable alternative to hotels, a way for a community of travelers to bond with locals. As hosts expanded their investment properties and the company’s power grew, the public had to consider whether Airbnb was contributing to a housing crisis.
According to Makarand Mody, an associate professor of hospitality marketing at Boston University who studies Airbnb, complaints about pricing have bubbled up over the years. But the fee outcry reached a fever pitch in spring 2021, prompting the company to vow a review.
Even as the public complaints have swelled, the 14-year-old company reports that it’s making more money than ever. In the third quarter of 2022, revenue swelled to $2.9 billion, and profits soared 46 percent, to $1.2 billion. The number of booked nights and experiences — activities hosted by a local — jumped to 99.7 million, the company said, the highest for a third quarter. Guest arrivals hit a record, surpassing 90 million across the globe.
“It’s ironic the [Airbnbust] hashtag is going around, given they had their best quarter ever in the company’s history,” Mody said. “It’s a little hard to reconcile the two.”
Airbnb is not oblivious to public sentiment. Saying he had heard users “loud and clear,” CEO Brian Chesky announced last week that Airbnb would improve transparency by allowing users to see price totals with fees baked in up front, not just lower nightly rates. And he said the company was telling hosts to avoid “unreasonable” requests, such as doing laundry when they check out.
The complaints didn’t go away; many social media users responded to the CEO’s tweets to tell him that the price total should also include taxes. And although Mody said the increased transparency was a good thing, “they did not solve the underlying problem, which is exorbitant fees in the first place.”
Airbnb has long said that the company advises hosts to keep the cleaning fee “reasonable” or to not charge it at all. According to Airbnb, 45 percent of listings globally do not charge a cleaning fee, and of those that do, the fee is on average less than 10 percent of the total reservation cost.
Spokeswoman Liz DeBold Fusco said in an email that hosts have adopted “more stringent” cleaning protocols since the pandemic, including hiring professional cleaners.
“It’s important that we provide Hosts with the tools to cover these baseline costs for hosting a guest,” she wrote. “However, we know that guests expect that the price they pay includes a clean home and so we are now including all Host charges in the total price for guests so that guests know exactly what they are paying upfront.”
Too many listings
Susan Norton, who has listed a two-bedroom cabin on her horse farm in Covington, Ga., since 2018, is feeling the hit of lower occupancy. She said in an email that bookings are down “considerably” on both Airbnb and Vrbo, despite improvements to the property, redecorating and good reviews. Norton said she believes several factors could be at play, including pricing, travel patterns and algorithms.
“However, I think the single worst contributor to my issue is market saturation,” she said.
AirDNA, which tracks the performance of properties on Airbnb and Vrbo, provided The Washington Post with Airbnb data that backs up complaints of hosts such as Rink, in Southern California. Compared with September 2021, the number of available U.S. listings on Airbnb increased by 29 percent, although occupancy rates ticked up less than a percentage point from a year earlier. Relative to the same time in 2021, occupancy rates were down 5.3 percentage points in May, 7.8 percentage points in June and six percentage points in July.
But in those three months, listings were up at least 27 percent from the same time a year earlier, booked nights were up by at least 21 percent, and prices rose 5 or 6 percent, according to AirDNA.
Jamie Lane, AirDNA’s vice president of research, said the forecast is for occupancy to continue to decline into next year.
“There’s more listings and more demand, but less demand per listing,” Lane said. “Even though overall demand is up, everyone feels a little bit worse off, because those bookings are getting spread out over more listings.”
A new change from Airbnb could make host concerns worse by adding to the already-flooded market of listings. On Wednesday, the company unveiled an “all-new, super easy way” for people to turn their homes into Airbnbs. New hosts will get guidance from experienced ones, called “superhosts,” and receive special support from the company.
“We generally see a slowing economy as a moment when more and more people are going to be presumably turning to Airbnb for hosting,” Chesky said earlier this month in an earnings call.
Asked about reports of some hosts facing a booking slump, Chesky said the big-picture story was positive.
“There are anecdotal descriptions of some host bookings are down, some host bookings are up, and there’s many possible explanations for this,” he said. “It’s just that travel is continuing to change.”
He said that, because the algorithm that determines search ranking was prioritizing all-in pricing and the best value, that could be a reason some hosts are seeing a dip.
“Not everybody is a great guest, not everybody will respect your home. ... Honestly, I thought [being a host] was going to be more fun and more profitable than it actually was.”— Airbnb host Carrie Ann Rink
“It’s primarily what we’ve seen as anecdotal, and it really depends,” he said. “You really have to take it on a case-by-case basis but overall, obviously bookings are up.”
He said value would continue to be important for the upcoming travel season — which could be good news for guests if more hosts need to compete for travelers.
“We need to make sure we have really competitive prices,” Chesky said, “and that means that we need to give more tools for [hosts] to be able to better price their listing.”
Competition favors guests
Ryan Danz, CEO of hospitality management company Air Concierge and a host himself, said his company is seeing more bookings than last year, but people are not staying as long — which results in a lower number of booked nights. Because rates are up, clients stand to make about 8 percent more than they did last year. The company manages a few hundred active listings.
“Is ‘Airbnb bust’ a thing?” he asked. “No, for us it’s not a thing.”
Still, he said, making money off an Airbnb is no easy task: There are 24-hour needs, messages to return, cleaners to organize and listings to update. He said his company updates descriptions regularly, adds new photos, responds to messages almost immediately and uses a revenue manager as well as smart-pricing tools.
“This is a high touchpoint business, and if you’re just an investor putting it on Airbnb, that’s not enough,” he said.
Last month, he tweeted that cleaning fees would be removed from all Air Concierge properties; the company does not require people to go through a checklist of chores before they leave.
Its official; @airconciergeinc has removed all cleaning fees from its 600+ @airbnb listings— Ryan Danz (@RyanDanz) October 12, 2022
While we cant & dont control what travelers see when first discovering a home on Airbnb vs what they see at checkout-we believe showing the total amount creates trust w/ us and our brand;
Danz said that the nightly rates would have to increase to cover the cleaning costs, and he’s not sure if that will hurt the listings.
“I just think it’s a better booking experience,” he said.
Lane, of AirDNA, said that as occupancies dip, hosts will probably have to compete more for guests.
“If someone has a long chores list and another one doesn’t, they’re going to choose the properties that don’t,” he said. “People are going to start advertising, ‘We don’t have chores, we take care of everything for you.’ ”
The people quitting Airbnb
Despite the recent changes, Airbnb may have lost some users for good.
Matthew Kepnes, founder of the Nomadic Matt travel blog, says he feels as if Airbnb downplays the damage to local housing markets that is caused by large-scale hosts who buy up multiple properties just to rent them out. Although he has consulted for Airbnb in the past, he also complained of “onerous” fees, cleaning rules, lack of a good value and the general “hassle” of renting one of the properties.
“A lot of travelers are turning away from the service and just moving back to a hotel, because it’s more convenient, and it’s often cheaper,” he said.
When Katie Borek, 38, travels from her home in Edmonton, Alberta, once or twice a month, Airbnb is no longer on her list of accommodation options. Instead, Borek finds hotel rooms at a significant discount through budget travel websites.
Borek appreciated the level of service she found at hotels after she switched from booking Airbnbs during the pandemic. Once, while checking out, she mentioned to hotel staff that one of the jets in her tub was broken, and, to her surprise, the hotel gave her a 10 percent discount on her stay.
For her, the price of a hotel is worth the peace of mind.
“I knew that I wasn’t going to be stuck with fees or anything that I was unprepared for,” she said.
Rink, whose Airbnb in California has seen a slump in bookings, actually likes the platform as a guest. She has rented a couple of properties in Italy for an upcoming trip.
But for her family, the great Airbnb experiment has turned into more of a flop. The family — who bought the home with Rink’s mother with the plan for her mother to live there eventually — is looking to rent it long term.
“I think the idea of it is actually more fun than actually doing it,” she said, “because it gets tiring, and not everybody is a great guest, not everybody will respect your home. When you’re small-scale like this, you take it more personally. Honestly, I thought it was going to be more fun and more profitable than it actually was.”
One thing that has surprised her family: the level of attention Ewing’s Facebook question got.
“I’m like, ‘Babe, you’re famous,’ ” Rink said. Her husband’s reply? “I wish I were famous for making money instead of losing it.”
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