Former London Airbnbs return to traditional rentals

UK: With the global pandemic bringing travel to a near halt, the London Airbnb market is returning to  traditional rentals. 

Rightmove reported a 45 per cent year-on-year increase on new rental listed for the week beginning 16 March, when understanding of the impacts of the coronavirus were starting to be realised in Europe.

According to Wired, who profiled Airbnb’s London market earlier in the year, many of these swapovers are located around core London tourist spots. It notes that most newly listed properties are both furnished and priced below market rates.

This is true across the UK, with traditional rentals growing in holiday spots such as Bath and Brighton. Edinburgh has seen the shift back as well, with local groups praising the return of housing supply to the city’s population.

According to AirDNA, 43,000 properties in the United States have disappeared from Airbnb’s platform since January.

Many of these shifts may be due to Airbnb’s COVID-19 cancellation policy, which allows guests to cancel bookings for a full refund. While the shift was praised by guests, hosts have had mixed reactions, worrying about the impact to their long-term income.

Zach Jacobs, professional host, told CNBC: “We went from a fantastic outlook for the next three months, to absolutely devastating — every single reservation disappeared. We will have to get very creative on paying the bills and keeping the mortgage paid.”

Jacobs estimates he and his wife have lost nearly $5,000 due to cancellations.

Many hosts and property managers with multiple properties may struggle to pay mortgages and similar debts on these money-making properties. This goes double for so called “ghost hotels,” which are often built on thin margins.

The onset of the coronavirus has come at a particularly delicate time for Airbnb, with the company fielding investor calls while deciding on its strategy to refund bookings made already. It has, however, opened its pilot medical housing programme worldwide, with Italy and France two of the early beneficiaries of the European countries at the epicentre of the virus.