Airbnb Isn’t Collapsing, But Revenue is Slightly Down. Is It Still Wise to Invest in the Short-Term Rental Market?

July 13, 2023

 

The last couple of weeks have been littered with headlines sounding the alarms on the short-term rental market. As one key viral tweet framed it, new data shows Airbnb is collapsing; revenue is tanking for Airbnb properties across key metros in the U.S. from Phoenix and New Orleans to Austin and Denver. According to the cited AllTheRooms data, in some cities revenue dipped nearly 50%.

airbnb AllTheRooms revenue data

The narrative quickly became that Airbnb’s business model was at risk, and everything from the tumultuous housing market, to municipal restrictions, to even stickler hosts were to blame. While these are all valid critiques of an ecosystem beholden to a famously-overinflated sector of the U.S. economy and with its own operations kinks to work out, is Airbnb’s business model really imploding before our eyes?

The short answer is likely no, as headlines inflamed a narrative based on one limited data set. That doesn’t mean there haven’t been some market contractions. Complementary data from more sources in the short-term rental market refute the claim that revenue is tanking anywhere from 30% to 50%, but still show that YoY there have been some dips in returns. So what’s big deal?

airbnb AirDNA revenue data

On this episode of The Big Deal, we dig into what’s really up with the current short-term rental market with two short-term rental industry analysts:

Lane & Seok An get into the specifics on the last few months of Airbnb property performance, comparing data from their own analysis and reports. The two offer takes on the true status of the short-term rental market right now, what hosts and investors experiencing on the ground, the current critiques being thrown at Airbnb’s business model, and how STR investors should navigate the current economic climate and Airbnb revenue reality.

The Big Deal turns office small talk into a big deal, giving you the analysis, hot takes, and insights to help you understand the biggest piece of market-shaking, headline-grabbing news for the week. The Big Deal is hosted by Voice of B2B Daniel Litwin and presented by MarketScale, airing every Wednesday at 11 AM CT on MarketScale.com.

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