AirBnb in Trouble?

I wanted to become an airbnb host through subletting an apartment locally under my business via a corporate lease. I have a mentee that has been doing extremely well since starting one just a few months ago in August. But there was something bothering me as to why I could not move forward with starting on my own. I was looking at AirDNA and things looked somewhat promising. But I was hesitant to begin when I thought of inflation. I also become more hesitant thinking of my own experience. So I looked into the data more on demand and supply. I google searched for any information regarding hosts with airbnb history to observe if they noticed anything on their end.  Then lucky enough, I came across this article Airbnb Hosts say bookings fell of a cliff.  It was as if the financial Gods were rewarding me for not jumping into FOMO seeing the success of my mentee.

I then came across this article discussing Vacasa stock earnings report. Vacasa is a rental management company I was actually looking at using myself for my own place to rent out. However, surprisingly they were not taking individuals with a lease with an apartment anymore. Well in this article looks like they should have took our business. Vacasa stock dropped 38% after their Q4 guidance. Vacasa stated this:

“We are experiencing some softness and variability in guest bookings that began after the strong summer season. The weakness was noticeable in September and has become more pronounced in the fourth quarter,” said Greyber and Cohen.

The comment around softness in bookings mirrored that of VCSA’s much larger peer ABNB, which also indicated that bookings would slow from pandemic levels.

Vacasa (VCSA) warned that average gross booking value per home could decline Y/Y in 2023 from “recent record levels”.

With all of these recent findings on top of interest rates rising still. Then we’re seeing a shift in what’s being purchased I just felt like pursuing AirBnB hosting thru subletting would have been too much of a risk to take. Now I could be entirely wrong about what this could be foreshadowing to me and AirBnB could do extrmely well in the next few quarters meaning I missed out on potential good revenue. However, this is when it is important to understand the risk you’re taking. I have other projects I am also working on and being an AirBnb host seemed like a way to speed things up. But when you take into account the monthly financial cost of doing business I realized that it was more advantegous to focus on those less riskier projects instead. The return may not be as high but I am fine with that. I accept the limited upside potential for the limited downside risk. Now that you’re aware of all of this and considered doing the same tell me why you think I am incorrect or why it doesnt phase you at all!



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