Financial Times Europe - 04.04.2020 - 05.04.2020

4 April/5 April 2020 ★ FTWeekend 3

House Home

Source: AirDNA

Demand slows for short-term lettings

Number of Airbnb bookings, by city

Occupancy is falling in tourist hotspots

Occupancy rates for Airbnb listings ()

Week of

Jan 

Week of

Aug *

Barcelona 

Barcelona 

Madrid 

Madrid 

Paris 

Paris 

Landlords are losing money

Total projected weekly revenue from Airbnb rentals, by city (m)











Jan Mar

London New York Rome Shanghai Beijing

 Feb

 











Beijing

Jan Aug

Paris Rome

Jan Aug Jan Aug











Jan Aug Jan Aug

New York Barcelona

* Projected bookings as of March 

I

t is peak season, but Universal Stu-

dios stands eerily empty. The roll-

ercoastersareatastandstill,andno

minions fromDespicable Menor

wizards fromHarry Potterare wan-

dering the pathways. The park, with

others in Orlando, Florida, shut its

doors to visitors in mid-March to help

combat the spread of coronavirus cases.

Empty theme parks are among the

clearest emblems of how rapidly US life

haschangedinafewshortweeks.

Less obvious are Orlando’s countless

short-term lets, which holidaymakers

used to stay in. They too are empty. And

theirhostsfaceanuncertainfuture.

As the global travel and tourism sec-

tor grinds to a halt following travel bans

andflightcancellations,manyownersof

short-term or holiday rental homes are

struggling to plug the hole in their

monthlyincome.

Evandro Patricio is a full-time Airbnb

host in the city. His five apartments are

in a condominium, a stone’s throw from

Universal Studios. Three weeks ago, his

occupancy rates were approximately 80

per cent. Today, there is not one guest in

sight, with all bookings cancelled until

theendofJuly.

“I have nothing booked for the next

few months,” says Patricio. “We’ve been

really feeling the whole thing.” He will

lose about $24,000 in revenue monthly

for as long as the Covid-19 emergency

continues, but he must still find

$5,000-$6,000 in taxes, utilities and

homeownerassociationfees.

Left in the lurch

On March 14, Airbnb announced a

worldwide extension to its “extenuating

circumstances” policy: all guests

booked for check-ins between March 14

and May 31 would be eligible for full-

refund cancellations, overruling stricter

cancellationpolicieschosenbyhosts.

When asked if Airbnb was planning to

helphoststhroughthecrisis,theCalifor-

nia-based company said it “did not want

guests making the decision to put them-

selvesinunsafesituationsandcreatinga

public health hazard because of a com-

mitment to their bookings”. It acknowl-

edged that the decision to offer guests a

refund had caused hardship for many

hosts but said its first priority was the

healthofthepublicanditscommunities.

Manyhostswereangeredbythisdeci-

sion, believing the burden should be

shared more equally between the com-

pany,theirguestsandthehosts.“Airbnb

hasbrokenthecontract,”saysSebastien

More, a host from Le Mans, France.

“They don’t care about the hosts, they

onlycareabouttheguests”.

This week, Airbnb apologised to hosts

for not consulting them on the policy

and set up a $250m relief fund to help

see them through the crisis. As part of

the programme, hosts can claim 25 per

centoftheirusualcancellationcompen-

sation when a guest with a check-in date

during the specified period cancels a

stay due to Covid-19. It has also set aside

anextra$10mtohelpits“superhosts”—

those who are experienced, have high

response rates and high overall rating

scores — who will be able to apply for

grants of up to $5,000, but only if they

fulfil certain criteria, such as having a

maximumoftwoactivelistings.

“Hosts will really appreciate this ges-

ture,”saysJoseAntonioDelMoral,afull-

time host in Spain. “I am only worried if

$250mwillbeenough.”

“Short-term impacts to professional

hosts are catastrophic as cities enter

lockdown and it’s too early to tell how

quickly travel demand will recover in a

post-coronaviruseconomy.”

According to AirDNA’s calculations,

hosts in Beijing, where the virus hit

early, saw total revenues drop nearly 43

per cent in March, compared with the

year before. In Seoul revenues fell more

than 45 per cent; in Tokyo, the figure

was 21 per cent. In Europe, where many

countries have imposed home-isolation

Continued on page 4

Wish they

were here

Holiday lets| With travel banned and bookings

slashed, Airbnb hosts are struggling. But they are using

ingenuity to fight back. ByAleksandra Wisniewska

Other hosts share his concern. Nic-

holette Ribeiro from Fort Lauderdale,

Florida, has been a superhost for four

years but has six listings registered to

her name — she owns one and manages

the other five — so is not eligible for a

superhost grant. “I’m not meaning to

sound ungrateful,” she wrote in a Face-

bookpost,“butitfeelslikeI’mdrowning

and [Airbnb] threw me a lifeline and

thencuttherope”.

The spread of Covid-19 is the first big

threat to the sector, says Scott Shatford,

founder and chief executive of AirDNA,

which tracks the holiday rental market.

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