Have US Airbnbs Already Entered a Downturn???

In this issue, let’s start with an important business concept: industry life-cycle theory.

It divides an industry’s development into four stages:

• 1️⃣ Introduction: a product or service has just appeared, awareness is low, but opportunities and profit margins are large;

• 2️⃣ Growth: the market begins to accept it, demand rises rapidly, and favorable conditions create opportunities;

• 3️⃣ Maturity: the market is saturated, competition intensifies, profits shrink, and barriers to entry rise;

• 4️⃣ Decline: growth slows, failure rates are high, and winners take all.

Let’s take Amazon’s seller ecosystem as an example.

Ten years ago, many people sourced products casually from China, sold them at higher prices on Amazon across borders, and made their first fortune as long as their products were somewhat distinctive. Some even became million-dollar sellers overnight. Today, however, Amazon’s seller market has reached the later part of a typical maturity stage, with some categories already in early decline.

Platform fees keep rising, advertising costs soar, and operating tactics become more complicated. Small sellers cannot afford to compete. With large sellers operating at scale and enjoying cost and brand advantages, small sellers leave one after another.

The market has moved from “everyone can make money” to “the strong get stronger and the weak exit.”

Is Airbnb experiencing the same fate?

In some ways yes, but not entirely. Airbnb has its own industry life cycle. From its rise around 2010 to the short-term rental boom of 2015–2019, a new host could take a few phone photos, put a listing on Airbnb, and earn a month’s rent in one week. Airbnb was then in the early growth stage, full of opportunities.

Today, however, the US Airbnb market has reached the middle-to-late part of its growth stage.

We are seeing:

• · Falling occupancy and intensifying price competition

• · Higher guest expectations

• · Ordinary listings struggling to stand out without distinctive features

But Airbnb is still far from maturity or decline. We observe:

First, Airbnb supply in the US is still growing by 8% annually, well above GDP growth of 3%. This indicates that the market remains vibrant and is taking market share from traditional hotels.

Second, globally, Airbnb listings in places such as Brazil, Mexico, Thailand and Indonesia are growing by more than 20% annually. These markets remain in early growth, with tremendous opportunities. They are still in the sweet spot where phone photos can be enough to fill a listing.

In other words, Airbnb is a global market in which multiple stages coexist. The US is entering late growth, while many emerging countries are still growing rapidly.

What about Airbnb’s future and eventual outcome? Will it follow Amazon toward a situation where the platform suits only large sellers and individuals struggle to survive?

Here is my personal view:

Airbnb will not become a platform completely dominated by large players. Instead, it will return to the essence of the guesthouse business. At least, we have not seen a winner-takes-all pattern in this industry.

Why?

The biggest difference between accommodation and e-commerce is:

🛏️ Airbnb is an experience-driven, service-driven industry.

You cannot replicate accommodation experiences uniformly at factory scale the way you can with Amazon products.

Airbnb hosts who thrive and make money in the future will mostly fall into two groups:

• 1️⃣ Differentiated listings—for example, spaces with unique views, distinctive design themes, stories and character;

• 2️⃣ Professional operations—hosts who prioritize service, manage reviews, improve check-in processes and pursue repeat guests.

Simply put, Airbnb’s future will be about who is more distinctive and professional, rather than who is biggest.

If you are still deciding whether to enter Airbnb, I would say: the short-term rental market has indeed entered its next phase, but this reshuffling creates new opportunities.

As long as you come in with a willingness to build for the long term, rather than speculate, and create distinctive, welcoming properties with good service, this market still welcomes you.

Hosts, what do you think? We welcome your thoughts.

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.

April is here, cherry blossoms are beginning to bloom, and Seattle’s short-term rental slow season is finally coming to an end!

Short-term rentals in peak season; mid-term rentals in low season.

Looking back at earlier large bookings, this strategy has achieved some results, allowing us to retain confidence even in a cold winter!

Although peak season has arrived, we still cannot let our guard down. Policies and broader conditions are full of changes and challenges. Making steady progress will remain the main theme going forward.

For the detached house in Kirkland below, Redfin shows an estimated long-term monthly rent of approximately $3979.

With the owner’s trust and support, we carefully furnished the home and immediately began short-term rental operations. Fortunately, because the home’s condition and location are both good, short- and mid-term bookings have continued to come in.

As shown in the booking screenshot below, a guest recently booked this house from July 22 to October 5, a total of 75 nights, at an average monthly rent of $9657.

In summary, under Snowball Rentals’ management, this home’s monthly rental income rose from $3979 to $9657—described here as an increase of nearly threefold.

For homeowners, combining short- and mid-term rentals in this way can earn more in peak season and help them get through low season smoothly. Even if the low-season rental figures look less dramatic, they still outperform long-term rentals and give homeowners a strong sense of financial security.

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 nearly two years of Airbnb’s downturn, we at Snowball Rentals hope to help owners make steady progress in low season, navigate the challenges safely and lay a better foundation for next year’s peak season.

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!

Here is what the detached home described above looks like after our careful furnishing:

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!

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

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 30 days or more.

8. Transparent fees — For rentals 30 days or more, we charge 15% of accommodation revenue. For nightly rentals 30 days or less, we charge 20% of accommodation revenue.