Airbnbust? Short-term rental prices plummet in Palm Springs

https://www.msn.com/en-us/money/realestate/airbnbust-short-term-rental-prices-plummet-in-palm-springs-and-some-owners-are-worried/ar-AA1e0CGc

by lxm • 3 years ago

39 66 3 years ago

msn.com

fxtentacle• 3 years ago

Cannot read without bloated app.

chdefrene• 3 years ago

Try this: https://archive.is/HdHaU

SomewhatLikely• 3 years ago

I clicked to open in the app then immediately clicked back and it showed me the whole article. EDIT: schedule I see there's an expand article option right under the button to open in app.

ohazi• 3 years ago

It's the hottest summer on record, who the fuck still wants to go to Palm Springs?

pengaru2• 3 years ago

I'm just north of Palm Springs by JTNP and the airbnb next door has been booked pretty often despite frequent highs >110F.

It doesn't make sense to me either, but tourists still come here in the summer.

wnc3141• 3 years ago

My guess is those vacations were booked long before checking the weather. Sure maybe a sunk cost thing but the commitment and scarcity of time off is pretty understandable

1letterunixname3• 3 years ago

Indoor golfing, bingo tournaments, and the last remaining shopping malls? ;-P

apengwin• 3 years ago

Palm Springs is awesome in the winter. It's a mecca of modern architecture!

kylehotchkiss• 3 years ago

For real! I had such a blast there last February. Sometimes you can get a good deal on the golf resorts outside of town which are pretty nice places for a weekend retreat

1letterunixname3• 3 years ago

Everyone in Phoenix. ;-)

You know the weather and climate are fucked when it's hotter than Kuwait City.

exclusiv• 3 years ago

Evenings in the desert are awesome in the summer.

alfalfasprout• 3 years ago

The data doesn't support an Airbnb bust and it never has. Bottom line is markets were there were suddenly distorted pricing effects due to high demand and low supply are now experiencing pricing equilibrium as supply has increased and they can no longer command $1k+/night.

Also, with most consumers feeling a squeeze from prices, higher interest rates, etc. it's expected that these sky high prices have to come down.

adamredwoods• 3 years ago

Funny, the article is full of anecdotes, all with different opinions on why the market is slumping.

The takeaway is that the market CHANGES, which means anyone in the Airbnb business needs to have the same values as any business. It's not easy money for the wealthy, to solely buy a property and let it crank out cash. There was a quote in the article that reflects this "easy money" mentality.

miguelazo• 3 years ago

vacation rental tax revenue for the city government was down about 11% so far in the 2022-2023 fiscal year compared to the prior one
The tax receipts since then, however, have not supported that optimistic outlook: May revenues were down by about 18% from May 2022

Those are not anecdotes, and appear very early on in the article.

skyzyx• 3 years ago

Airbnbs in the desert, during the hottest summer on record, can’t find renters?

robotburrito• 3 years ago

Hopefully it continues and these homes come back on the market as long term rentals or actual homes real people can buy to live in with their families.

paulgb3• 3 years ago

Even as Palm Springs' tax revenue from home bookings has dropped by about 13% over the past year, hotel tax revenues are up by about 1.5%. Combined revenue from the two types of stays — known as transit occupancy tax — is down by about 3%.

This backs up anecdotes I’ve been hearing about people going back from AirBnB to hotels. The consensus seems to be that the price difference is diminished and the high variance in quality is not worth whatever discount still exists.

I have some good memories from the early years of talking with hosts and even having them show me around, it’s a shame that it’s become so transactional but I don’t see how it could have scaled any other way.

hattmall2• 3 years ago

I listed a house recently and have been checking all my guests reviews before accepting a stay. I always look at what the hosts that reviewed them have listed. It is almost never a single or even 2 or 3 properties. Almost everyone had at least 10+ properties listed. Most have more 20+ or even over 100. I feel like that really changes the dynamic and foundation of Airbnb. Since I started hosting I've now heavily prioritized being a guest of hosts with a single property or small number of properties. It's a much much better experience by far.

simfree• 3 years ago

I have had this backfire on me when booking with a host with 3 listings (DADU in their back acreage and two rooms with seperate entries in their house).

Booked the room with a King bed, ender up in the 2nd room with a small futon. Took pictures and the host was a ghost over messaging till after we had left, when he left us a negative review. AirBnB was useless when I called their support line that night, meanwhile the host left a negative review and AirBnB was unwilling to remove it despite the host leaving the platform a few months later.

lexandstuff4• 3 years ago

I've seen this rhetoric only in tech circles that people are "moving back to hotels," and I don't understand it. Last time I checked, hotels still don't offer kitchens. Hell, most of them, disgustingly, don't even provide a toilet brush. A hotel is not an alternative to staying in a fully furnished home with complete amenities.

Isn't the reason Airbnb bookings are down because interest rates are sky-high worldwide to combat inflation? Travel, in general, should be down if the reserved banks worldwide are doing their job.

arcticbull2• 3 years ago

I think most people on vacation would rather not cook, and therefore don't value kitchens. There are some long-stay brands that cater to people who want kitchens but that doesn't seem to be the mid/high-end leisure travel market.

Toilet brush, I mean, they have people who will clean the toilet daily. Not a perfect substitute I agree, but also not something I've ever really thought about.

[edited to add] > Isn't the reason Airbnb bookings are down because interest rates are sky-high worldwide to combat inflation? Travel, in general, should be down if the reserved banks worldwide are doing their job.

Other way around. Prices are high because a lot of people are traveling, which is being folded into inflation numbers. Prices are high because demand is high relative to supply, for lots of things, but especially for travel where the market is still riding the post-pandemic rebound.

You are right that reserve banks are hoping to reduce demand for things like travel, but that will yield lower prices. Consensus is that rates at current levels are not doing that yet, and I think in past recessions, layoffs led demand drops.

Note also that Airbnb bookings are down but hotel occupancy is right below its 2019 peak. [1]

[1] https://www.ahla.com/sites/default/files/SOTI_report_Oxford_...

thaumaturgy3• 3 years ago

Speaking as someone that currently spends ~10% of their days in some kind of short-term housing or another, neither of the things you mentioned are something I care about in a hotel room.

Toilet brush? Maybe I'm a weirdo, but if I see a problem with the toilet, or any other part of the room, I go down to the front desk and smile a nice smile and say, "hey, can you send someone up to sort this out?", and then they do -- for free. I also get infinite towels, a pool (often), a gym (sometimes), access to people who are familiar with the area, no hinky cleaning fees or other surprises on my bill, points and rewards, and a reasonable certainty that there are no hidden cameras in my room and anybody I have to deal with is sane enough most days to keep a job in hospitality.

Aside from people who are traveling in groups of three or more or just have a desire to set some money on fire, I don't understand why people use AirBnBs.

tekno45• 3 years ago

Why do you need a toilet brush for a bathroom that should be cleaned before your arrival?

TylerE4• 3 years ago

Plenty of suite style hotels (and even motels) that have kitchens.

Vvector• 3 years ago

Why would you need a toilet brush?

TylerE4• 3 years ago

These days is t feels like Airbnb is MORE expensive most of the time, and that’s before you get to the like $100 cleaning fee

paulgb3• 3 years ago

But please take the trash out back and strip the beds, thanks!!!

JSavageOne• 3 years ago

As a nomad I do spend more time in hotels - maybe 70% hotels, 30% AirBnBs. I generally spend more time in hotels because 1. I book last minute and hotels offer maximum flexibility and significantly greater possibility to extend my stay, whereas an AirBnB will generally only be open for the time I booked and full afterwards 2. hotels are generally cheaper than AirBnB these days 3. hotels have more consistency in quality

That being said I still check AirBnB because sometimes there are great deals there. Also the longer term I'm booking, the more I'm going to prefer an AirBnB-type apartment or house accommodation - though AirBnB will likely be at least 2-4x more expensive than booking the same place through local sources - though the latter will probably require a minimum stay of at least 1-3 months (which still can end up cheaper than AirBnB for short-term stays).

moneywoes• 3 years ago

What have been the highlights of your nomad journey?

sircastor• 3 years ago

I have some good memories from the early years of talking with hosts and even having them show me around, it’s a shame that it’s become so transactional

This is an example of how different people can be. To me, the ideal experience is to never see or hear the property owner. I just want a nice place to stay that’s not just a door, a bed and a bathroom. I grant that AirBnB can be a bit of a crapshoot, but our experiences have been largely very positive.

yread• 3 years ago

I can imagine Airbnb is losing a big chunk to Booking.com which now offers people's apartments and homes, too

1letterunixname3• 3 years ago

I'm in Austin (104 F / 40 C at the moment), and there aren't many tourists around or anyone doing much of anything. We're praying to the renewable gods that ERCOT has its act together. The risk of a power outage now is a threat to human life.

That said, the prices on Airbnb are cheap: $40-110/night for downtown prime locations. During SXSW last year, comparables to my place went for $900-1300/night.

jmyeet4• 3 years ago

I don't know if AirBnB is truly in decline given these anecodtes. Any such decline doesn't seem to be reflected in their quarterly revenue yet. But, as I've said for years, I hope AirBnB dies. It's cancer.

As we've seen over the last 1-2 years most places in the developed world are now entering or are in the midst of a full-blown housing crisis. The average house price in Toronto is north of C$1.1M for a country with notoriously low incomes, as one example. And that's before we even get to Vancouver.

There are lots of reasons for this including a drop in new home starts (which have never recovered to their 2007 levels in the US), effective NIMBYism at every policy level and corporations moving into residential real estate.

But the real problem here is that we treat housing, a basic human necessity, as a commodity--something to be bought and sold en masse and to be withheld from people so they die in the streets in the interests of profits. AirBnB is just once facet of this. Many view second or third or fourth homes as income sources and retirement accounts. Governments have become so beholden to these voters that most Wdeveloped governments see increasing house prices as an explicit policy goal and all sorts of money is thrown at homeowners.

This has to stop.

lobf• 3 years ago

Or we could just build more housing…

jmyeet4• 3 years ago

Homeowners in large part oppose this as decreased supply increases the nominal value is what is likely their primary asset. It’s incredibly shortsighted.

If we stop treating housing as a commodity that must go up in value you’ll find that the supply increases.

midoridensha• 3 years ago

But, as I've said for years, I hope AirBnB dies. It's cancer.

AirBnB was great ~5 years ago. If they just restricted it to people renting out their kid's room after they left for college, it would be perfect.

jmyeet4• 3 years ago

On this I agree. You want to rent out a room in the house you also live in? Fine. Even a separate unit in a multi-family unit? Sure. It’s a shame most of the US has made that type of building illegal but that’s another story.

But instead it’s used to create illegal hotels residential areas and as investments that further restrict rental housing supply.

MikePlacid• 3 years ago

But the real problem here is that we treat housing, a basic human necessity, as a commodity

I have a “living experience” in a country that was treating housing not as a commodity, but as a basic human necessity. You know what - it was much, much harder to get a decent housing there than in the US. Surprise?

jmyeet4• 3 years ago

What country is that?

b212• 3 years ago

Honest question: what should happen to all those people having multiple houses? How many is too much? What if it’s “their retirement plan”? Those people should die in the streets so others won’t?

I mean I get your point but don’t see a sane way out. Maybe we should just build way more?

eBombzor• 3 years ago

Didn't it reach something like 49 C two years ago? Must be hot as fuck over there.

juujian• 3 years ago

This most recent run on permits came after the city council passed a new rule in November capping the number of permits in each of the city’s official neighborhoods at 20% of homes. Nine neighborhoods have already reached the 20% cap (existing permitholders were grandfathered in).

So since the start of airbnb they have practically reduced the number of homes by 20%? And all to add the capacity of probably the equivalent of 5-10 large hotels?

TylerE4• 3 years ago

End stage capitalism at work

karaterobot• 3 years ago

But there's no doubting the squeeze many Palm Springs rental owners are feeling, in part because hundreds of new vacation rentals have entered the market.

Based on personal experience, I would tend to give more credence to this line than to other speculation about AirBnB or the short-term rental industry.

I know that the AirBnBs I've tried to book recently have all been both expensive and booked up. I also know that when I was shopping for a home last summer, 4 out of 5 Redfin agents pointed out which parts of the property could be potentially be converted into rental units. That made me think at the time that there is or would soon be a lot of "inventory" on the rental market.

sharts• 3 years ago

I've never had an experience with AirBnB that was anywhere as seamless and a decent hotel.

Why do people fall for Silicon Valley polished turds? Does feces really smell better when VC funding is involved?

sonicshadow• 3 years ago

We all think we’re one big idea away from #vcfunded!

voisin• 3 years ago

I switched back to hotels after hundreds of Airbnb stays over the last 10-12 years. The advent of corporate AirBNB hosts with dozens of units killed the charm and the pricing is no longer competitive, the customer service sucks and didn’t scale up, and they contributed to destroying the housing market as properties got snapped up by quasi-hotel operators that lacked any of the professionalism of hotels.

Whenever I hear of people still using AirBNB it is always a version of “need of a kitchen” or “need space for multiple families”. I feel like both of these are simply features that a hotel chain could expand into more aggressively.

AirBNB, like many tech companies of its era, has failed to consider the goodwill and loyalty of its customers as a KPI and instead alienated its users. The lack of loyalty means any sizeable hotel chain can win customers quite easily by simply providing the product-market fit that I described above.

iJohnDoe2• 3 years ago

Book an AirBNB when you want to be recorded by hidden cameras and posted online.

Airbnbust? Short-term rental prices plummet in Palm Springs

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