I think it's quite obvious that tourism isn't going to recover back to 100% where they were in 3 months, no...
Note that '100%' includes the growth prospects that Airbnb still had in January 2020. 'startups' like airbnb hire for growth. 25% workforce cut is roughly the growth prospects (20-30% per year) that airbnb had last year.
So no, that recovery won't come in just a few short months. For one because there's still a global pandemic related global lockdown. Second, because an effectively rolled-out vaccine is not expected until at least next year. Third because tourism is hardest hit in a normal economic crisis, in a recession and 20% unemployment figures like now, the first thing you stop doing is taking international trips for fun. Fourth because in a virus pandemic, tourism (concentrated populations gathering in hotspots like a museum, bus, airplane etc, and transporting the virus across borders) is a high-risk activity that gets restricted way more than other economic sectors like farming, manufacturing, or work from home office jobs. Fifth because most of airbnb's stock is caught up in one of two categories: people renting out their home when they're away on vacation, these people are staying home and aren't making their real estate available. Or professional airbnb companies which purchased real estate that's only economic with large revenues, financed with leveraged mortgages, many of these companies are set to collapse in a 3-month shutdown, let alone a 6-month low-activity industry. A lot of these will be folding and selling their properties. Both the demand side and supply side is going to take a hit, airbnb will run much less business for the next year at least and will need to bounce back. It won't be easy. Especially in an industry where you'll see dirt-cheap hotel prices competing for a few years.
> Or professional airbnb companies which purchased real estate that's only economic with large revenues, financed with leveraged mortgages, many of these companies are set to collapse in a 3-month shutdown, let alone a 6-month low-activity industry. A lot of these will be folding and selling their properties.
I wonder how this is or will impact the real-estate market? Are enough people going to foreclose without interested buyers that the market takes a plunge?
This conversation has come up a lot in real estate circles. I think it depends on the debt load that people have, which means that more expensive places that have lots of Airbnb's will be hit the hardest. Anecdotally, my friend outright bought a house outside of Detroit to use as an Airbnb. With no mortgage to pay and property taxes low, he's deciding whether to wait it out until people start travelling again, or put it up for rent.
I think it's highly unlikely...but I'd be very happy to be wrong, too.
These highly-leveraged "new" companies and individuals make up only a portion of AirBnB-rented homes, which themselves are only a small portion of the entire housing market. There was a very recent interview or article with AirBnB's CEO where he (I'm sure he was fudging the numbers a bit) said only 1/3 of AirBNB homes are actually owned by these kinds of speculative home-buyers. The remaining 2/3 are split evenly between traditional real estate leasing companies and homeowners with only 1 house.
Also, worth considering that short-term rentals can easily be transformed back into long-term rentals. In any case, I think a national housing market plunge is highly unlikely.
> These highly-leveraged "new" companies and individuals make up only a portion of AirBnB-rented homes
That's what AirBnb very much likes you to believe. In my opinion they lie a lot.
> which themselves are only a small portion of the entire housing market.
That really depends on the city. Barcelona, Amsterdam, Prague and other cities were literally killed by AirBnb and by extension by AirBnb slumlords.
> Also, worth considering that short-term rentals can easily be transformed back into long-term rentals.
That maybe true. Then again, if you max out your credit card to speculate on highly leveraged financial products the time window for clean-up may be very short and you may be forced to sell at a very bad price.
I, for one, are really not sorry for this bunch of city killing assholes. For short term financial gains they make life miserable for everybody else.
Yes that's of course what the CEO wants to say, because professional airbnb = hotel company not playing by the hotel regulations/license rules, plus it's pushing out locals. So he downplays that and wants to make it seem as if airbnb is majority-driven by mom n pop folk, who make available a free room or their home some of the time to supplement income a bit, harmless.
In reality, a typical person (like me) would rent out their space about 10 days a year, while an airbnb company aims for 365. Could very well be that 2/3rd of listings are average-joes and 1/3rd are professional.
But in terms of nightly stays, it could still be about 20 professional to 1 average-joe. And those nightly stays ultimately reflect the revenue that drives the economics of these properties, airbnb's business and the impact on the local market.
Note that '100%' includes the growth prospects that Airbnb still had in January 2020. 'startups' like airbnb hire for growth. 25% workforce cut is roughly the growth prospects (20-30% per year) that airbnb had last year.
So no, that recovery won't come in just a few short months. For one because there's still a global pandemic related global lockdown. Second, because an effectively rolled-out vaccine is not expected until at least next year. Third because tourism is hardest hit in a normal economic crisis, in a recession and 20% unemployment figures like now, the first thing you stop doing is taking international trips for fun. Fourth because in a virus pandemic, tourism (concentrated populations gathering in hotspots like a museum, bus, airplane etc, and transporting the virus across borders) is a high-risk activity that gets restricted way more than other economic sectors like farming, manufacturing, or work from home office jobs. Fifth because most of airbnb's stock is caught up in one of two categories: people renting out their home when they're away on vacation, these people are staying home and aren't making their real estate available. Or professional airbnb companies which purchased real estate that's only economic with large revenues, financed with leveraged mortgages, many of these companies are set to collapse in a 3-month shutdown, let alone a 6-month low-activity industry. A lot of these will be folding and selling their properties. Both the demand side and supply side is going to take a hit, airbnb will run much less business for the next year at least and will need to bounce back. It won't be easy. Especially in an industry where you'll see dirt-cheap hotel prices competing for a few years.