Sleeping in Someone Else’s Bed
Airbnb sees increase in demand both nationally and locally
Jennifer Gibson Schecter was once a tourist in New Orleans herself and is now proud to call NOLA home. She also writes the Wednesday Tourism Blog on BizNewOrleans.com.
Things are looking up for summer travel — though they look a little different than last year. After months of stagnant booking rates during COVID-19 travel restrictions and stay-at-home orders, Airbnb reported it had more nights booked at its U.S. listings between May 17 and June 3 than the same time in 2019, with a concentration in drivable markets.
In an interview with Bloomberg, Airbnb CEO Brian Chesky said travel is shifting from far-off destinations to locations that are easily reachable by car. Since February, the percentage of Airbnb bookings within 200 miles of the travelers’ residence has grown from a third to more than 50% in May.
Chesky also said customers are booking longer stays of a week or more, pointing out, “Work from home is becoming working from any home.”
The increase in bookings for Airbnb came a month after it had to lay off 25% of its employees, or roughly 1,900 people.
In a letter to employees, Chesky spoke to the future of travel and a return to Airbnb’s origins in response.
“Travel in this new world will look different, and we need to evolve Airbnb accordingly,” said Chesky. “People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection. When we started Airbnb, it was about belonging and connection. This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences.”
According to Inside Airbnb, an open-source data tool, there are currently 6,508 Airbnb properties in New Orleans. The data also show 61.4% of local hosts have multiple properties listed, a potential indicator the host is running their Airbnb like a business and doesn’t occupy the property, a violation of the city’s short-term rental rules. It also reflects a growing number of specialized hosts who manage properties for the owners for a percentage of the profits.
One local expert is Joshua Aranguiz, real estate asset manager at Rêve Realtors and Airbnb Superhost, a designation Airbnb bestows on experienced hosts with the highest ratings, lowest cancelation rates and quick response times to guests. Aranguiz has built a niche practice that includes helping buyers find properties that are likely to be the most successful as short-term rentals through the actual management of them as rental properties.
“I help people consult and do analytics. I use [data program] AirDNA and look at all the actual numbers and then diagnose the market,” said Aranguiz. “I help my clients with everything from locating the house to buying the house, getting the house ready, and managing the house. I have a cleaning team and construction people I’ve worked with too.”
Aranguiz currently manages 12 local properties and expects that to increase to 16 by the end of the month. He has found success by listing the properties across multiple short-term rental platforms. Using a program called Hostfully, he can manage all of his properties and post them to seven different rental platforms.
Aranguiz said he is optimistic about the short-term rental market after having felt the harsh realities of COVID-19 on the industry. When I asked him how the pandemic had impacted business, he laughed incredulously.
“In 2019, I sold over $100,000 in vacation rental sales,” he said. “In January and February of 2020, I was at $71,000 in rental sales. I was on pace for something like $300,000 this year. I’m still at 71,000 [dollars]. I was on pace to triple my last year’s revenue.”
Aranguiz said he is still poised for growth, however, and has reservations picking up through the summer into the fall. He has also seen the shift in guests coming from closer to New Orleans, calling the city a domestic travel hub and “a high attraction zone.”
Beyond short-term rentals, the localized overnight stay is also trending for hotels. Hotel data from international hospitality data benchmarking and analytics firm STR demonstrate a slow rebound in hotel bookings nationwide. Considering locations like the Florida Panhandle, STR analysts said the data clearly show weekend leisure travel is back, pointing out that drive-to leisure markets saw the highest occupancies at the end of May.
Overall, U.S. hotel revenue from April 2020 compared to April 2019 saw a sharp decrease in hotel room revenue that coincided with a sharp decrease in expenses, but it was not enough to drive profitability.