Airbnb and other short-term rental property owners have felt the first-hand effects of Americans and other foreign travelers putting their summer travel plans on hold this year because of Covid-19. On top of travelers deciding not to travel, my states have added restrictions on what’s allowed with short-term rentals during Covid-19.
In order to gain insight into how Covid-19 has affected short-term rentals, IPX 1031 surveyed both part-time and full-time Airbnb hosts as well as guests who have used the platform. The study found that the average revenue loss for a host during Covid-19 was $4,036. The average host on average makes $22,822 and the hosts polled in this survey said they expected this year’s revenue to be down by over $4,000.
The survey found that Airbnb hosts have taken measures to try and get people to rent with them. Hosts reported decreasing their daily rates by over $90 to try and get more renters this summer. Hosts said they expect to see a 44% decrease in revenue this summer (June-August) because of the Covid-19 pandemic. When asked about summer revenue expectations pre-pandemic, hosts said they planned on making nearly $12,000 this summer. They now expect to make just a little over half of that amount at $6,761 dollars. Hosts are fearful that many people will simply refuse to travel this summer because of the fears surrounding Covid-19.
47% of hosts said they don’t feel safe renting out properties to guests until the pandemic passes. 70% of guests said they are currently fearful to rent or stay at an Airbnb because of the pandemic.
When hosts believe bookings will return to normal:
In order to gain insight into how Covid-19 has affected short-term rentals, IPX 1031 surveyed both part-time and full-time Airbnb hosts as well as guests who have used the platform. The study found that the average revenue loss for a host during Covid-19 was $4,036. The average host on average makes $22,822 and the hosts polled in this survey said they expected this year’s revenue to be down by over $4,000.
47% of hosts said they don’t feel safe renting out properties to guests until the pandemic passes. 70% of guests said they are currently fearful to rent or stay at an Airbnb because of the pandemic.
When hosts believe bookings will return to normal:
- This Fall (37%)
- When a vaccine becomes available to the general public (29%)
- Spring 2021 (16%)
- This summer (8%)
- Summer 2021 (5%)
- This winter (3%)
- It will never fully return to what it was (3%)
- This summer (26%)
- When social distancing ends (15%)
- When a vaccine becomes available to the general public (15%)
- This fall (12%)
- Summer 2021 (10%)
- This winter (9%)
- Spring 2021 (9%)
Revenue alternatives for hosts
Because Airbnb hosts have and expect to loss revenue this year, many hosts are looking for alternative ways to get the revenue out of their rental property. 21% of hosts said they are listing their short-term rental on a long-term rental market to try and make some money. 21% said they have not don’t that yet but are considering it. 47% of Airbnb hosts said they are offering month-long stay options to renters as a way to try and make some money back on their investment property. The other unfortunate alternative for hosts is to list their rental property on the market to sell. 10% of Airbnb hosts have already listed their property on the market to sell and another 16% are considering listing their rental home on the market to sell.
Another way Airbnb hosts are supplementing lost revenue is with another job. 42% of Airbnb hosts that were surveyed said they have already taken another job because of the money they lost on their short- term rental this year. Only 26% of Airbnb hosts have been compensated for their lost revenue by Airbnb or another form of bailout for hosts. 16% reported that they have already missed a mortgage payment on their short-term rental and worry about missing more in the future. An alarming number of hosts (45%) said they would be unable to sustain the operating costs of their short-term rental business if the pandemic lasts another 6 months. Many are worried they may never be able to offer short-term rentals again.
Airbnb cancellations
On top of lost revenue, many Airbnb and other short-term rental hosts have had to deal with a growing number of renters canceling their rental reservations for the year 2020 and beyond. Of the Airbnb guests that were surveyed by IPX 1031, 64% said they have canceled or will have to cancel a reservation this year because of the Covid-19 pandemic. 43% of guests said that it was difficult to receive a refund from the host they are planned to rent with. Listed below is a monthly breakdown of when bookings were scheduled before travelers canceled their summer travel plans because of the Covid-19 pandemic.
February 2020 – 12% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
March 2020 – 14% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
April 2020 – 17% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
May 2020 – 18% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
June 2020 – 11% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
July 2020 - 8% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
August 2020 – 5% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
September 2020 – 4% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
October 2020 – 3% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
November 2020 – 3% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
December 2020 – 3% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
2021 – 2% of Airbnb guests canceled their bookings with Airbnb because of the Covid-19 pandemic.
This breaks down to 49% of guests canceling the spring, 24% of guests canceling in the summer, 10% of guests canceling in the fall, and 5% canceling in the winter. 21% of guests said they aren’t sure they will re-book on Airbnb after Covid-19.
The full results from the survey can be seen in the graphic below from IPX 1031.
