Airbnb Inc. said demand for short-term rentals is strong, rejecting data presented in a viral tweet that suggested revenue for property owners in some US cities was down nearly 50%.
(Bloomberg) — Airbnb Inc. said demand for short-term rentals is strong, rejecting data presented in a viral tweet that suggested revenue for property owners in some US cities was down nearly 50%.
“The data is not consistent with our own data,” said Sam Randall, an Airbnb spokesperson, in response to a Twitter thread that contained data the author said was from short-term rental analytics site AllTheRooms. “As we said during our first-quarter earnings, more guests are traveling on Airbnb than ever before, with nights and experiences booked growing 19% in the first quarter of 2023 compared to a year ago.”
According to the tweet, Sevierville, Tennessee, Phoenix and Austin topped the list of US cities with the biggest declines, with revenue per available listing, or RevPAL, shrinking as much as 48% in May over a three-month average compared with a year earlier. Nick Gerli, the author of the tweet who runs a consulting business and YouTube channel advising home buyers and real estate investors, attributed the slump to a decline in demand and increase in supply.
AllTheRooms, which aggregates property listings from Airbnb and Expedia Group Inc.’s Vrbo on a daily basis, didn’t respond to a request for comment on the veracity of the data and Gerli’s analysis.
Data from another provider, AirDNA, which has been collecting listing data on short-term rentals since 2014, show a more muted decline in the single digits in the same markets, according to a tweet by Chief Economist Jamie Lane.
Airbnb has benefited over the past few years from shifts in work and lifestyle due to the pandemic. It saw a rush of people become hosts to meet a surge in demand for longer stays in rural towns or near popular outdoor tourist destinations like national parks. The platform has seen an acceleration in the year-over-year growth of total active listings, excluding China, in every quarter over the last two years, it said in its first-quarter earnings report. Total active listings grew 18% in the three months ending in March compared with a year earlier, up from 16% in the prior three-month period.
But as more companies call workers back to the office, some pandemic boomtowns have seen dramatic declines in housing prices. And a glut of properties that were listed during the pandemic-fueled boom suddenly caught up with and even overtook demand growth.
Airbnb said the number of nights and experiences booked in the current period will look unfavorable compared with a year ago, when there was a surge in demand following the outbreak of the Covid-19 Omicron variant. As a result, the company expects year-over-year growth in nights and experiences booked to increase at a slower pace in the second quarter than revenue.
Lane said he expects revenue per available room, or RevPAR, to be down about 1% in the first half of this year. “We expect something similar in the back half, about 1%-2%, driven primarily by a decline in occupancy and slightly offset by higher rates.” The decline in occupancy is due to supply growth outpacing demand, he added. Lane declined to comment on the discrepancy between AirDNA’s data and AllTheRooms.
RevPAR is a metric that Airbnb hosts use to measure how much their listings make. It’s the same standard the hotel industry uses to assess performance of its properties. In the context of Airbnb listings, RevPAR takes into account the rental price plus cleaning fees set by hosts, multiplied by the occupancy rate.
It offers a more accurate assessment than RevPAL because it excludes the dates on which the listing is not available for booking, Lane said. A full-year comparison would offer a fairer view than just a three-month period, as Gerli reported, due to seasonality in each market, Lane said.
While Lane said he expects RevPAR growth to continue to be flat in 2024, overall demand will still be strong for short-term rentals. It “will be much more than hotels and we expect short-term rentals to be gaining share over hotels in terms of total accommodations,” he said.
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