Anyone who has stayed at an Airbnb knows that the experience can be a roll of the dice. Anything can happen when you go up for rent. That’s part of the charm: you might be pleasantly surprised to find a bottle of wine waiting in the free kitchen, or you might have an adventure trying to unlock the door with the weird skeleton key you had to dig out from behind. tree in the yard
But renters are growing weary of waiting lists inside. Make the beds, do the laundry, load and unload the dishwasher, water the plants, mow the lawn, don’t touch the record collection…
And that’s on top of triple-digit cleaning fees.
The backlash against rogue hosts is growing, according to the Wall Street Journal. One traveler told the Journal his $299 a night Airbnb in Sedona, Arizona brought a $375 cleaning fee, plus list of works
That’s the last thing almost anyone wants to do on vacation.
Airbnb hosts say there are two reasons for the higher rates and job demands: Covid-19 has increased sanitation requirements and, you guessed it, inflation. The cost of hiring cleaners has gone up, as have utility bills. And hosts don’t just rent out their properties for fun, they run a business.
Airbnb allows hosts to set their own rates and recommends avoiding cleaning fees if possible. The company says half of its active listings charge slightly more in fees, averaging less than 10% of the total booking cost.
For some travelers, those extra costs and labor have served as a reminder that once upon a time, before the gig economy, there were these other places that could be rented in buildings across the country where cleaning takes place. for you oh yes the hotels! Do you remember them?
One distraught traveler told the Journal that the lake cottage he rented didn’t have a working dishwasher or vacuum cleaner, so he spent the last day mopping the floor by hand. The host then gave it a modest three-star review for cleanliness.
His next trip will be in a hotel.
“It’s $50 cheaper,” he told the newspaper. “And we don’t have to clean anything.”
Sure, some travelers with bad Airbnb experiences are fleeing to hotels, but there doesn’t seem to be an existential threat to the family status model that Airbnb pioneered.
It’s like choosing between Starbucks or the local indie coffee shop when you’re in a new city. At Starbucks you know what you’re getting. Will it be the best coffee of your life? Probably not, but at least you can count on it. The place probably has an unexpected charm, quirky art on the walls, maybe even great coffee, but it might also smell weird or play pan music or take too long to place your order.
Hotels host the Starbucks crowd; Airbnb counts on the indie cafe that wants to feel like they’re living everywhere they’re visiting.
THE BOTTOM LINE
The social media furore over cleaning fees and labor is certainly a PR headache for Airbnb, but it’s far from a crisis. The Airbnb model is now firmly embedded in the fabric of the hospitality industry, although it still has growing pains.
This year’s demand helped the company turn a profit in the second quarter, even as inflation took a toll on travelers’ budgets.
Airbnb is also leaning into a work-from-home model — its CEO, Brian Chesky, announced earlier this year that he would live as a full-time digital nomad, shuttling from one Airbnb to another every few weeks. That’s something that hotels can’t sell in the same way (I think someone who spent three whole weeks in a 100 square meter hotel room earlier this year and nearly lost his mind in the process).
For more on the debate between Airbnb and hotels, check out our latest Nightcap session, where host Jon Sarlin and I get into it all. Plus, Jon talks to Redfin Chief Economist Daryl Fairweather about what homebuyers need to know about mortgage rates. And the New York Times’ Jodi Kantor explains how employers can track you while you work from home, which is as scary as it sounds.
Amazon’s “Thursday Night Football” debut was a huge success, drawing 13 million viewers to watch the Kansas City Chiefs beat the Los Angeles Chargers.
The event “exceeded all of our viewership expectations” and led to the “biggest three hours of U.S. Prime subscriptions ever in Amazon’s history,” said Jay Marin, head of sports for Prime Video.
Why it matters: For the first time, the NFL, television’s most valuable commodity, is putting together a digital-only game package. CNN Business’ Frank Pallotta has the story.
Trying to buy a home at any point in the last couple of years has been…challenging, to say the least. In late 2020, the problem was supply: buyers were clean and mortgage rates were low, there weren’t enough houses on the market (ask for money supply wars).
Now, however, the problem is demand. Buyers are pulling out of the market because list prices remain high and mortgage rates, which have already doubled in the past year, are poised to continue rising as the Federal Reserve raises interest rates.
Consider this surprising calculation from colleague Anna Bahney:
- A year ago, a buyer who put 20% down on an average-priced home ($359,900 at the time) and financed the rest with a mortgage rate of 2.86% (the average 30-year fixed rate at the time) had a monthly payment. 1,192 dollars.
- Today, that buyer would see the median price rise to $403,800, and the average mortgage rate is over 6%, so the monthly payment would come to $1,941. That’s an extra $749 per month!
That’s one of the many ways the Fed’s rate moves affect real people.
THE BOTTOM LINE
A house disturbance is worse than a one-two punch. It’s really a one-two-three-four punch considering (1) home prices are still elevated, (2) inventory is still low thanks to supply chain issues, (3) the rental market is also struggling, with lots of buyers are flooding in, prices are going up for people who have no choice but to rent, and (4) the cost of everything else in your life goes up at the same time. Actually, there’s probably a fifth, sixth, and seventh strike in there as well, but we don’t have time for that.
So will it get better? In the end Prices are starting to drop (yes!), but mortgage rates may continue to rise as long as the Fed continues to raise interest rates. That probably won’t happen until 2024 (wow!).
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