A big story to emerge from the COVID-19 pandemic has been its impact on the Airbnb juggernaut.
Airbnb has been valued at more than $US30 billion and this year it was preparing to be listed as a public company. Now the impact of the coronavirus has delayed its plans.
Since the news of the rapidly spreading infectious and deadly disease caused by COVID-19, a shocked and grieving world has watched many industries approach collapse. Tourism-related operations have, understandably, been the worst hit – the accommodation industry among the foremost economic causalities.
The freeze on tourism and movement in general imposed by affected countries trying to control the spread of the virus has seen Airbnb bookings in COVID-19 hotspots crash. Since January, Beijing has seen a drop of 96 per cent, Seoul, South Korea 46 per cent, and Rome 41 per cent.
In many countries Airbnb’s website has now been shut down, and vacant houses have been used to accommodate stranded travellers caught up in the world-wide lockdowns.
Already suspicious neighbours are up in arms over the potential that short-term renters may spread the deadly virus.
In Australia, Airbnb properties are flooding back onto the long-term rental market, as short-term visitors dry up due to COVID-19 travel restrictions. The Airbnb hosts who have become reliant on income-generating properties to pay their bills are being bled dry by a lack of business.
Globally, Airbnb has favoured travellers by allowing refunds, outside its own published guidelines. In doing so, the company has angered its hosts who have been left bearing the brunt of the cancellations.
Airbnb has launched a relief fund for hosts struggling to make ends meet. A total of $US17 million has been contributed to the fund by employees, investors and founders; and grants of up to $5000 will be made to hosts most in need and who also satisfy eligibility criteria.
One of the eligibility criteria published by Airbnb says the host must “Only share their primary or secondary residence—no more than two active listings”
This criterion will exclude all apartment-based short-term letting operators who have more than one rental listing. That business model seems to be doomed by both the pandemic and Airbnb’s lack of financial support – a loss not mourned by long-suffering permanent residents.
If Airbnb had also considered the wear and tear caused to common property by short-term letting in residential apartment buildings – many no doubt managed by some of their hosts – We Live Here might not have been so opposed to its activities.
So where to now for Airbnb?
It will be many months, if not years before we know the full toll of the COVID-19 pandemic on the tourism industry and the long-term impact it will have on “disruptors” such as Airbnb. However, if Airbnb and other short-term letting platforms do survive, we hope that the review of the Owners’ Corporation Amendment (Short-stay Accommodation Bill) 2006, due in 2021, will lead to proper regulation of the industry, which hitherto has been so sadly lacking Victoria.
Short-term operators bail out
Earlier this year we reported on the first successful case against a short-stay operator who was issued consent orders by VCAT and required to pay compensation to the resident who complained.
We have now been advised that Experience Hotel Apartments which was involved in the VCAT action, has pulled out all together from the building, and the 90 apartments it managed are being converted into normal long-term rentals.
Other smaller operators are also pulling out from this building.
This is very welcome news and a clear indication of the impact COVID-19 is having on the short-term rental market.
For years the short-term letting industry has been a nightmare for residents in residential apartment buildings. Now fortunes have changed and the short-term operators are suffering from the incubo that is COVID-19.
If any other readers have observed long-term rentals replacing short-term letting please let us know.
COVID-19 and apartment living
Is your building taking extra precautions to prevent the risk of COVID-19?
- Frequent sanitising of high touch point such as intercom and lifts buttons.
- Hand sanitiser dispensers on each floor.
- Signage about washing hands.
- A limit on the number of people in each lift.
- Closing of some common areas.
- We would welcome feedback on how the COVID-19 pandemic is being managed in your building and whether any specific issues have arisen.
We would welcome feedback on how the COVID-19 pandemic is being managed in your building and whether any specific issues have arisen.