![]() And Vienna, the capital of Austria, has a monthly tax Airbnb hosts have to pay if they make money from short-term rentals. Florence, one of Italy's most popular tourist destinations, recently banned new short-term rentals on platforms like Airbnb so that it could free up more homes for locals. They want these Airbnbs to register and since most of them don’t meet this requirement, over 15,000 properties have disappeared from the platform. New York is doubling down on a rule which says that if a homeowner rents out their space for less than 30 days, they have to be living on the premises too. It was a double-whammy - rising real estate prices and rising rentals.Īnd cities are taking notice of this menace. This forced rental costs up for people who didn’t own homes too. But it wasn’t just that, the Airbnb phenomenon also meant that the number of homes in the market available for long-term rentals dwindled. A study also found that if the number of Airbnbs in the vicinity were doubled, the sale price of New York City homes would go up by 6-9%. By December 2022 only 10% of new homes cost less than $300,000 as against about 40% in December 2019. But as they started snapping up properties, it led to massive surges in real estate prices across the US. Maybe they were drawn by all those YouTube videos touting “Make $100,000 from your Airbnb”, we don’t know. Or rather “the short-term rental speculator.” These people believed that no price was too much to pay for owning a home that could be listed on Airbnb. Ones that just wanted quick rental income. You see, its success actually created a whole new breed of homebuyers. Well, the thing is Airbnb has some dark clouds looming overhead right now. But travel shifted back towards city getaways and those Airbnbs started seeing higher occupancy levels instead.Īlright, now that we’ve cleared that bit up, you will be wondering - why on earth is Brian Chesky speaking about a broken model? And naturally, some properties fell behind.Īlso, as per some analysts, many of those properties that showed a dip in occupancy were in rural areas and beach towns - places that were hugely popular in the midst of a pandemic when people wanted to get away from the crowds. They had more properties to compare and make a decision. Suddenly, the number of listings shot up and there seemed to be a massive drop in overall demand for some hosts.īut the truth of the matter was that users were now spoilt for choice. That’s 23% higher than the same period a year ago. For instance, the number of short-term rental listings in the US skyrocketed to 1.38 million in September 2022. So people thought there was an opportunity to snap up a home and list it on Airbnb. Interest rates were at decadal lows and loans came easy. You see, during the pandemic, a lot of people bought a second home. Well, it was a simple oversupply problem. Hosts who let out their apartments were over the moon with the extra money they were making.īut this massive love - especially from the hosts - is also what eventually led to the “Airbnbbust” rumour. And the guest would get to maybe spend time with a local who’d give some handy tips for the city. If you had a spare room in your house in the city, you could rent it out. So they simply decided to rent out air mattresses in their apartment and called it “Air Bed and Breakfast.”Īnd that was the original premise or the foundation of the platform. Attendees were struggling to find a place to crash. That’s when they noticed that there was a design conference in town and all the hotels were booked solid. In 2007, Brian Chesky and Joe Gebbia were two broke kids who were struggling to pay rent for their apartment in San Fransico. Because a couple of days ago Airbnb’s CEO Brian Chesky acknowledged that it’s a fundamentally broken business. That no one wanted to stay in an Airbnb anymore.īut a year later, its shares are up 14%. And the rumour was that the occupancy rates on the short-term housing rental platform had dropped like a rock. Reddit forums and Twitter were calling it the “ Airbnbust”. If you’re already a subscriber or you’re reading this on the app, you can just go ahead and read the story.Ī year ago, many people were predicting the imminent collapse of Airbnb. ![]() We strip stories off the jargon and deliver crisp financial insights straight to your inbox. In today’s Finshots, we see why Airbnb’s founder thinks the company’s foundations might be broken.īefore we begin, if you're someone who loves to keep tabs on what's happening in the world of business and finance, then hit subscribe if you haven't already.
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