Will an ‘Airbnb bust’ reach Australia?

Short-term rental hosts in the US are reporting significant losses amid fears of an “Airbnb bust” due to an oversaturation of accommodation in the market.

But here in Australia, a leading Airbnb property manager says some bookings are down but there’s no fear the industry will significantly falter.

According to Insider, Airbnb hosts in the US have started reporting large losses.

Shelby Church says she lost almost $10,000 between June and September, despite having netted more than $12,000 in March alone this year.

Amy Nixon, a Texas resident and a stay-at-home mum with an economics degree, who has worked in journalism, took screenshots of social media comments from Airbnb hosts asking if others were experiencing a bookings slump.

She tweeted the posts with the caption “The Airbnbust is upon us” and it has gathered more than 50,000 likes on Twitter.

Ms Nixon told Insider she started noticing changing attitudes in posts in an Airbnb Superhosts Facebook group, with 196,000 members, a few months ago.

“There was a shift probably…right around the time the housing market in general started to tip,” she said.

She believes an oversaturation of short-term holiday rentals and “loose monetary policy” over the past couple of years is behind the problem.

“Anybody that bought a property – whether they were doing a good job running it or not, whether they researched the area, picked a good location, did a good job cleaning and presenting the property – just by owning the home, they could make money in the equity increase,” Ms Nixon said.

But Airbnb isn’t reporting a bust. In fact, the $60 billion company posted a record $2.88 billion in revenue and $1.2 billion in profit in its third-quarter earnings recently.

Here in Australia, specialist Airbnb property manager Hayley Mitchell said in some areas bookings had slowed but in others they have never been busier.

Ms Mitchell, who started Bnb Property Managers back in April and is a member of numerous Facebook groups for hosts, both here and overseas.

“I am seeing people from America and overseas talking about how they’re not making the money they used to,” Ms Mitchell said.

“Here in Australia, I have noticed recently that a lot of people are commenting saying that their bookings have decreased, particularly in areas that are holiday spots.

“The Bellarine and Mornington peninsulas have popped up a few times but I don’t think it’s so much of an Airbnb bust as it’s the economy.

“I think it’s more that interest rates are going up and the cost of living is going up and the one thing people always let go of is holidays.”

Ms Mitchell said her business had grown organically, by word of mouth and she now managed about 15 short-term rental properties. 

Some are her own and others she manages for other people.

She said unlike the holiday properties, her properties in Melbourne were in hot demand.

“My Melbourne properties are flying,” she said.

“They’re completely booked. Meaning, if I do have a guest check out and another check in, it’s on the same day. 

“I’m not even losing a day.”

Ms Mitchell said the clients booking the Melbourne properties were a mixture of people taking holidays, travelling for work and those moving to the city who were struggling to find a long-term rental.

“The rental market is so tight,” she said.

“They used to rent an Airbnb for a week until they could find a property, but now they’re renting it for a month to two months.”

As well as managing the rental side of the business on behalf of other owners, Bnb Property Managers can also help owners buy furniture, style and set up their Airbnb property.

Ms Mitchell also has some tips if hosts are finding their bookings are slowing down or they’re not making what they would like to.

She suggests using custom pricing instead of Airbnb’s smart pricing, and setting your own rental rates according to the season, long weekends, holidays and events in the area.

Also make sure the property is immaculately clean and includes basics such as tea and coffee, sugar, oil, tissues and toilet paper.

Ensure you answer any inquiries promptly and accurately and have excellent photos of the property.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.

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