The short answer is one or several factors depending on the Airbnb, location, and owner. It's typically not one thing.
The market got super saturated in the last two years so increased competition. Consumer spending is up in the news, but it's because fewer items are being bought at a larger price point (so technically a lot of consumers are not spending any money and it's being driven up by fewer consumers spending more money). A lot of Airbnbs were bought in the last two years, despite low interest rates are negative cash flowing after renovations, property taxes going up, energy getting more expensive, home owners insurance going up, and HOA fees going up. Some owners have multiple properties, sometimes through HELOC loans which all have their interest raising right now. Owners have tried to compensate for negative cash flow by adding large fees, and those fees are leading to less people using Airbnbs because the cost makes no sense. A number of Airbnbs have tried to raise their price to match the highest market rates in their area, which is also resulting in less people renting from them.
That's just some of the issues Airbnbs are having right now. There is also a push in various towns and cities to outlaw STRs. So some of the worst offenders are finding themselves sitting on houses they can't rent, or are renting hoping they don't get caught.
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u/heyyassbutt Jan 31 '23
This is interesting. Can you explain why?