H8 O THEGLOBEANDMAIL| FRIDAY,MARCH13,2020
A
s public health officials,
companies and politicians
struggle to centralize a re-
sponse to the novel coronavirus,
there are signs the decentralized
world of short-term rental ac-
commodations has its own spe-
cific vulnerabilities.
The human cost of the corona-
virus outbreak continues to grow,
with more than 111,000 con-
firmedcasesandmorethan3,900
deaths spread across 109 coun-
tries. The economic costs are also
being felt, particularly in the trav-
el and hospitality sector, and
analysts fear short-term rental
companies such as Airbnb and
VRBO may be uniquely exposed
to the fallout from the virus.
“Airbnb is facing the worst col-
lapse of the travel industry since
who knows when,” said Dror Po-
leg, the author ofRethinking Real
Estateand the co-chair of the Ur-
ban Land Institute’s Technology
and Innovation Council in New
York. “Airbnb thrives on confer-
ences and large events, many of
which are now postponed indefi-
nitely.”
“Coronavirus is a coup de
grace,it’sthelastthingtheyneed-
ed,” said Mr. Poleg, who argues
Airbnb was already facing in-
creased competition from online
travel agent giants such as Expe-
dia and from international hotel
chains such as Marriott, which
may be better positioned to man-
age the coronavirus fallout.
A softening tourism market
might be bad for investors who
bet on higher revenues for hous-
ing units in the short-term mar-
ket, even though if some of those
units converted to long-term
rentals the uptick in supply could
have the effect of lessening the
Toronto region’s housing afforda-
bility crisis.
“New listings are still outpac-
ing any increase in rental de-
mand,soifweseeayearoveryear
decline in rents [last month they
were flat], that would be quite
bad for confidence from inves-
tors,” John Pasalis, CEO of Presi-
dent Realosophy Realty Inc., said.
“We have heard from investors
who prefer to cash out after hav-
ing a hard time renting their
units,” he said, and while he
thinks an uptick in defaults is un-
likely, declining rental rates could
slow demand for condo presales.
“I believe [that] is highly possible
if rental prices start trending
down, and if we happen to hit a
point were resale condo prices
start to decline.”
Airbnb doesn’t say how many
listings it has in Canada (it has
seven million worldwide), but
third-party sources estimate To-
ronto alone has more than
20,000 short-term rental loca-
tions.
Airbnb declined to provide in-
formation on whether cancella-
tions have been up, but on mess-
age boards for Airbnb hosts in the
GreaterTorontoArea,thecorona-
virus is a hot topic. Hosts on these
sites are mulling cancelling any
bookings from China, or from
those in the travel industry (one
host who rents a room near Pear-
son International Airport ex-
pressed concerns about future
bookings from pilots and other
travel workers).
“My bookings are drastically
down for the first time ever and
had my first cancellation the oth-
er day,” wrote one host under the
name Joanne Azelis. “I’ve never
been without bookings, NEVER!!
It’s a massive loss of income.”
In 2018, a team of researchers
at the Chinese University of HongKong published a survey of out-
break studies in the medical jour-
nal Globalization and Health
called “The role of the hotel in-
dustry in the response to emerg-
ing epidemics: A case study of
SARS in 2003 and H1N1 swine flu
in 2009 in Hong Kong.” One of the
key conclusions: “The travel in-
dustry contributed to the speed
of the spread of this unknown
disease at that time.”
In 2003, the Metropole Hotel in
Hong Kong was the first site of
global dissemination for SARS af-
ter a medical professor from
Guangzhou infected at least sev-
en guests and visitors staying at
the same time (including two
from Canada). “Afterward, the
Hong Kong the health authority
established Guidelines on Infec-
tion Control & Prevention in the
Hotel Industry. It offered compre-
hensive information on ways to
implement infection control
measures, in particular the main-
tenance of good hygiene on hotel
premises.” The paper concludes
that Hong Kong’s increased focus
on training awareness in the tou-
rism industry paid dividends in
later outbreaks of flu and ebola.
On Feb. 28, Airbnb changed its
“extenuating circumstances poli-
cy,” so that hosts and guests in ar-
eas affected by travel bans wouldno longer face financial or plat-
form penalties for bailing on a
booking. The site’s public-facing
pagesdonotcontainguidanceon
hygiene and sanitation in a
health outbreak and the compa-
ny declined to say whether it has
shared any information of that
nature privately with hosts.
“The hotel companies because
they are so centralized, they can
respond to these things ... they
can make sure the rooms are san-
itized, to make people more com-
fortable. With [the coronavirus],
the last thing I want to do is sleep
in someone else’s bed,” Mr. Poleg
said.
The Airbnb post on cancella-
tions also noted: “Although no-
body can know the extent of the
impact that the coronavirus out-
break may have, we believe that
history shows that when global
disruptions happen, the travel in-
dustry has bounced back in the
long run.”
More than 1.4 billion tourists
trips were recorded in 2018 by the
World Bank, and Canada had
about 20 million visitors annual-
ly. It had taken more than 15 years
for those numbers to recover to
that level, which they had reac-
hed just prior to the devastating
effects of the SARS epidemic in
2003.Short-termrentalshurtbycoronavirusfears
Downturnmaypush
overallrentalrates
lower,withknock-on
effectoncondomarket
SHANEDINGMAN
REALESTATEREPORTER
TORONTO
THELISTING
Onamessageboardof
Airbnbhostsinthe
GreaterTorontoArea
therewerediscussions
aboutthecoronavirus
anditseffectonrentals.
FREDLUM/
THEGLOBEANDMAILAirbnbisfacingthe
worstcollapseofthe
travelindustrysince
whoknowswhen.
Airbnbthriveson
conferencesand
largeevents,many
ofwhicharenow
postponed
indefinitely.DRORPOLEG
AUTHOROFRETHINKING
REALESTATETHE ACTION This four-bedroom
residence was listed for $1.875-
million for about six weeks last
year.
In January, the seller enlisted
the help of a new agent, Belinda
Lelli, who reset the price to
$1.788-million based on the fact
that less updated, semi-detached
houses in the area fetched about
$1.4-million and some detached
homes netted roughly $1.8-mil-
lion.
“When you price it for what
you want, there isn’t a pressing
urgency to come to an offer
night. But we also didn’t want to
[list low at] $1.499-million and
get $1.65-million,” Ms. Lelli said.
“We had received two offers
that hovered at the $1.7-million-
dollar mark. However, the sellers
wanted closer to the asking price.
Our patience paid off.”
WHATTHEYGOTThe existing 1930s-
era house on this 27-foot-by-100-
foot lot was completely rebuilt
about two years ago. Stripped to
its brick shell, the house got all
new mechanics and plumbing, as
well as a modern kitchen and
three bathrooms with heated
floors.
Open entertaining areas are
located on the main and lower
levels, including one with a fire-
place. The dining area and the
loft-like bedroom on the third
floor both have access to rear and
side decks.THE AGENT’S TAKE“It’s very open
concept, which creates the feel-
ing of space and light, and it’s
nice and white and light grey
with elements, like stainless steel
and glass,” Ms. Lelli said.
“It has a finished basement
with a separate entrance to a pri-
vate backyard and private drive
for up to four cars, which is
scarce in Lawrence Park. You’re
lucky to get one; if it’s two it’s
golden; four is unheard of.”
This 1,583-square-foot house is
also close to coveted shops and
schools. “It’s in such an excellent
school catchment,” Ms. Lelli said.- SYDNIA YU
Want more? A video of this Done
Deal can be seen at
tgam.ca/dddeloraineReconsideredasking
pricefindsabuyer
forrebuilthouse
211DeloraineAve.,Toronto
LAWRENCEPARKNORTH
Askingprice:$1,788,000
Previousaskingprice:$1,875,000
(Nov.2019)underpreviousagent
Sellingprice:$1,740,000
Previoussellingprice:$1,172,000
(2018)
Taxes:$5,756(2019)
Daysonthemarket:33
Listingagent:BelindaLelli,Royal
LePageRealEstateServicesLtd.
DONEDEAL
| REALESTATE