Short-term Rental News Digest – November 2020

The year has been a bumpy ride for Airbnb and the short-term rental industry as a whole. The platform had to introduce various changes throughout the year to adjust to the changing circumstances.

The most recent change is to its service fee structure. If you have not familiarized yourself with their new fee structure yet, be sure to do so before December 7. Yet, Airbnb still managed to file for IPO as planned, irrespective of the many challenges. 

The festive season is also upon us. Last month we reported about noise monitoring services. This month we are looking at another tool that has made the news. If you have not invested in a noise monitoring service, it is the ideal present for your property.

Airbnb Changes Its Fee Structure in Europe

In Europe, from December 7, 2020, Airbnb will charge a 15% fee on its third-party connected software hosts. Guests will no longer have to pay a service charge.

This change means that Airbnb will be in alignment with other platforms, like Booking.com, that charge only the hosts. Airbnb has commented that the removal of the guest service charge will enable hosts to control the final price. It also makes the booking process more transparent for guests in addition to the improved flexibility. 

Several hosts have indicated that they will increase their prices so that they can keep their original profit margin.

Airbnb Files for IPO

Airbnb has finally submitted the required documentation for its IPO! Morgan Stanley and Goldman Sachs will lead Airbnb’s offering. The shares of the company are set to trade under ABNB on the Nasdaq Global Select Market. Reports have indicated that the IPO validation will be for about $30 billion.

This offering will be the biggest on Nasdaq since Facebook filed almost a decade ago. 

Reviews Matter More Than Price

A new study completed by Florida Atlantic University (FAU) in conjunction with four other universities has revealed that reviews matter more than low prices. According to this study, travelers are more convinced by guest reviews than discounts when booking accommodation via peer-to-peer accommodation platforms.

So, instead of offering a discount, consider providing better value through amenities and services. This will help you to stand out from the crowd and increase your chances of receiving a five-star review. 

‘Tis the Season to Squash Parties

Party Squasher, based in Silicon Valley, has introduced a program to help property managers and hosts prevent unapproved parties remotely. The technology that they use has a small sensor that counts the number of mobile devices in and around the property (including the garden). It will then send the data to the property owner. 

The mobile devices do not have to be connected to Wi-Fi in order for the sensor to pick it up. The property owner gets to determine the occupancy limit for the property. This way a notification is only sent when this predetermined threshold is broken. 

What makes this technology so great is that it uses no cameras or microphones. It also does not track phone numbers or gather or save personal data. So, hosts can rest assured that their guests’ privacy is protected. Interested hosts will have to buy a sensor for $249 which includes a one-year subscription for the service.

Almost 80% of US Travelers Set to Travel

Generali Global Assistance, a global insurance firm, has surveyed the US travel market. According to their findings, 74% of American travelers are planning to travel this holiday season.

The vast majority will travel domestically by car. Only about 20% have plans to travel abroad. More good news for the industry is that about half indicated that they will stay in a short-term rental instead of a hotel. 

Their survey also revealed that there is an increased willingness to invest in travel insurance. Almost 60% indicated that they are more inclined to get travel insurance now compared to before the start of the COVID-10 pandemic. New York, Florida, and California were identified as the most popular local destinations.  

Airbnb Reveals Data on Longer-term Stays

At the end of October, Airbnb completed an international survey among guests who booked longer stays in the last 90 days. This survey has revealed that the COVID-19 pandemic played a role in more than half of the longer-term stays booked during this period. 

It was important for guests to stay connected to their friends and/or family. This was a big driving force behind the booking. Almost 60% of 28+-day stays were booked for two or more people. Also, the majority of guests had a personal connection to their destination. Either they have visited the place at least three times in the past or know friends or family there. 

Needless to say, a month-long stay calls for different amenities than a simple weekend getaway. The most popular amenity was high-speed Internet. Proximity was the second most important.