Back to Short & Mid-Term Rental Insights

Has Winter Arrived for Short-Term Rentals? Airbnb Shares Plunge!

阿蓝聊民宿 · Snowball Rentals · 2024-08-15

Hello, and welcome to Snowball Rentals’ WeChat account, where you can read about recent developments in the US short-term rental market.

Homeowners, as the end of August approaches, the short-term rental peak season is drawing to a close. Do you feel this year has been less busy than previous years?

Indeed, Airbnb, the leader of the short-term rental industry,

has seen its share price fall 20% over the past 30 days!

Historical Google Finance screenshot: ABNB at US$116.90 on August 13, 2024, down 20.60% over the preceding month.

Airbnb Inc;NASDAQ:ABNB;116.90USD;pastmonth-30.32(-20.60%);closedAug13,6:33p.m.EDT

Afterhours116.88,-0.020(0.017%);one-monthchart

Open114.39;High117.77;Low114.05;marketcap73.93B;P/E15.91;dividendyielddash;CDPscoreB;52weekhigh170.10;low110.40

(As of August 13, 2024.)

On August 7, last Wednesday, Airbnb released its second-quarter 2024 earnings: revenue grew 11% year over year to US$2.748 billion, total nights and experiences booked rose 8.7% year over year, and global listings exceeded 8 million.

21st Century Business Herald reported that Airbnb's first-half 2024 revenue reached US$4.89 billion, up 13.67% year over year.

But because of increased income taxes and higher fixed costs relative to sales, second-quarter 2024 net income declined from US$650 million in the second quarter of 2023 to US$555 million. The net profit margin fell from 26% to 20%, reflecting sluggish earnings growth.

Airbnb's results were less than ideal. On the day of the earnings release, its share price fell 13.38%, closing at US$113.01 per share, nearly half below its peak valuation in early 2021.

Slowing profit growth

The share price plunge was related to weak performance and subdued expectations for the future.

Second-quarter nights and travel experiences booked totaled 125 million, an increase of only 8.7%, below analysts' expectations.

Airbnb said it expected third-quarter 2024 revenue of US$3.67–3.73 billion, still below analysts' expectation of US$3.84 billion.

Growth in other measures, including gross booking value and total bookings, also slowed and missed market expectations. Together, these factors weakened investors' confidence in Airbnb.

Airbnb's response strategy

First, Airbnb is actively increasing its penetration in emerging markets such as Germany, Brazil and parts of Latin America, where there are substantial market opportunities.

Second, Airbnb has found younger users to be the main driver of growth in accommodation bookings. The distinctive cultural properties associated with its “Icons” listings strongly appeal to younger consumers.

At present, 15 Icons listings on Airbnb's website, including the Musée d'Orsay, Inside Out, the Ferrari Museum overnight stay and Up, remain fully booked.

Third, Airbnb is improving the overall quality of its listings. The company is reportedly removing listings that fail to meet guests' expectations and has introduced the Guest Favorites feature on mobile to help users identify the highest-quality properties.

Airbnb will also display the top 1%, top 5% and top 10% of eligible listings on its mobile platform. These features make it easier for guests to find Airbnb's highest-quality properties.

For most hosts, the first two strategies are not easy to implement, leaving them to follow Airbnb's approach and focus on improving listing quality. This is easy to say but difficult in practice.

Compared with long-term rentals, short-term rentals can bring new problems every day. Even dealing with those hassles consumes considerable time and energy, before any improvement in property quality. Accidentally offending a guest and receiving a complaint also creates a risk of Airbnb removing the listing.

New hosts have an even harder time. Without experience in furnishing, marketing or pricing strategy, they may have a very good house that attracts no inquiries long after listing. Reaching the “Top 10%” can seem like a fantasy.

Hosts also face competition from traditional hotels.

Under Xiaohongshu posts discussing Airbnb's share price plunge, some commenters complained about high Airbnb fees, inflexible hosts and vacation rentals being inferior to hotels at the same price.

Airbnb's growing number of listings shows that more people are entering short-term rentals, intensifying competition.

Hosts need to keep asking themselves: what makes my vacation rental better than a hotel?

As competition grows fiercer, the days of effortless vacation rental earnings are over. Capturing a share of the market now requires serious work.

Homeowners, what do you think about Airbnb's disappointing second-quarter results and plunging share price? How have your short-term rental returns been this year? Send Snowball Rentals a private message and let us exchange experiences!

As a homeowner, you may now be wondering: my home is quite good, but how much could it earn on Airbnb? Would it earn more than a long-term rental? Would it involve a lot of trouble?

If you:

Hope to increase rental income through short-term rentals;

Cannot spare a great deal of time to handle the small details;

Occasionally need to use the home yourself, making it unsuitable to empty out the furniture for a long-term rental;

Then:

Snowball Rentals’ management team is your best choice.

From pre-launch vacation-rental styling, big-data analysis and online marketing to tenant screening, dynamic pricing, customer service and sales, cleaning and repairs, Snowball Rentals provides everything as one complete service for your home.

This Week’s Booking Results

Through long-standing relationships with insurers, assignment companies and technology companies, Snowball Rentals rents homes for medium- and long-term durations at short-term rates, then gives owners a rebate of 5% in management fees to maximize their income.

Winter is the low season for Seattle’s short-term rental market, especially in 2023. Some recent large bookings, however, have been like a ray of sunshine, giving us high hopes for Airbnb’s performance this summer!

On Redfin, we can find an estimated long-term monthly rent of approximately $4305 for this detached house in Lynnwood.

The owner placed great trust in Snowball Rentals, commissioning us to furnish the rooms and then immediately begin short-term rental operations.

With its excellent location and lake views, it has always rented easily. This time, it secured another large booking!

As shown in the booking screenshot below, a guest rented through Airbnb for 75 nights. Without deliberately planning it, the short-term rental became a mid-term rental.

The rental income plus cleaning fee for this booking reached $26250!

Using Redfin's monthly estimate of $4305, the long-term rent for 75 nights would be approximately $10800.

In summary, with Snowball Rentals operating this detached house, what the source calls “monthly rental revenue” rose from $10800 for the long-term comparison to $26250,

more than doubling.

More importantly, the owner does not have to worry about maintenance or cleaning. When something needs to be discussed with guests, we also help with communication and oversight.

Here, we again thank the owner for placing trust in the Snowball Rentals team!

After Airbnb’s downturn in 2023, we at Snowball Rentals hope to help owners regain ground in summer 2024!

Once again, heartfelt thanks to our homeowners for their trust and support. Whether the market is strong or weak, Snowball Rentals will stand with you and look for ways to increase your income!

Some homeowners will surely ask the hard question: was a large booking like this just a stroke of luck? What if the home does not rent? A long-term rental is more stable—even earning less is better than earning nothing!

Our answer is: the outcome depends on what we do.

Vacation-Rental Styling

Competition on Airbnb is becoming increasingly intense. The days of piecing together secondhand furniture, taking phone photos and earning easy money on Airbnb are over. Airbnb hosts have moved toward professional operations.

Careful design and furnishing before launch, followed by professional short-term rental operations, will be the only choice for a rental that continues to generate high income.

Here is another of Snowball Rentals’ core services: vacation-rental styling!

Let us enjoy the before-and-after furnishing photos of this beautiful lake-view house!

When choosing a short-term rental on Airbnb, would this home’s appearance attract you?

If you would also like to make your home more attractive and earn more rent, please contact us at any time!

This Week’s Short Videos

We regularly update short videos every week.

The content you need is all here.

👇🏻 Homeowners are welcome to follow us 👇🏻

Snowball Rentals

We also share practical vacation-rental styling plans and creative ideas to help you achieve more with less spending!

Keep rental income growing!

Xiao An’s Vacation-Rental Styling

Referral Rewards

If you are already a Snowball Rentals homeowner, you receive a US$500 referral fee for each referral.

If you are not yet a Snowball Rentals homeowner, you receive a US$250 shopping voucher for each referral.

Snowball Rentals Management

1. Full service — We provide pre-launch rental design, furniture procurement, furnishing, professional photography, online marketing, copywriting, tenant service and sales, cleaning, supply purchasing and property repairs. You only need to be a hands-off owner; we handle the rest.

2. Multi-platform promotion — We promote the home on Airbnb, VRBO, HomeAway and other mainstream platforms for maximum exposure.

3. Dynamic pricing — Using big data, we adjust prices every day according to seasonal demand, holidays, last-minute vacancy offers, weekends and local activities, maximizing the owner’s income.

4. Income-improvement SOP — We follow 44 secrets for maximizing short-term rental income, optimizing each property’s online marketing, on-site operations and other aspects to work toward maximum income.

5. Flexible owner stays — Owners can flexibly choose when to stay themselves. This is especially suitable for owners with multiple residences around the world.

6. Terminate at any time — Management does not require an annual commitment. The owner can end the agreement with one month’s advance notice.

7. Corporate housing — In addition to nightly rentals, we work with insurers and assignment companies to provide executives with hotel-style managed accommodation for stays longer than 30 days.

8. Transparent fees — For rentals longer than 30 days, we charge 15% of accommodation revenue. For nightly rentals under 30 days, we charge 20% of accommodation revenue.