A certain type of vacation home is struggling to stay booked this summer: the outdated, mid-tier listings on Airbnb and Vrbo
If you decorated with Aunt Ethel's couch and are stubborn on price, you might have a hard time renting this summer as guests now have the upper hand.
Steven Errico/Getty Images
- The high end and low end of listings are getting booked this summer, Airbnb managers told Insider.
- It's the mid-tier listings with dated furniture and hosts stubborn on price that can't find guests.
- Travelers this year have "Champagne tastes on a beer budget," said one Phoenix manager.
A certain type of rental is struggling on Airbnb and Vrbo this summer, managers of multiple listings told Insider.
It's a step up from the cheapest room in town, but a step down from a McMansion with a game room and pickleball court.
Maybe the furniture is outdated or the amenities are limited — just a pool, but no hot tub — and the host is stubborn on what the price should be.
It's a listing stuck in the mediocre middle and, during the most competitive summer for hosts in the past three years, it's not getting booked.
Hosts' revenue is expected to decline on average this year for the first time since the pandemic, according to short-term analytics site AirDNA. Likewise, average occupancy rates — how many nights an Airbnb is booked per month — are also forecasted to fall slightly, to 56% from 58%. Hosts told Insider, given the trends they see on their dashboard, the mediocre middle will bear the brunt of that downturn.
It's a trend that's going to stay, predicted AirDNA Chief Economist Jamie Lane.
"As short-term rentals get more and more mainstream, there's going to be higher expectations that go along with it," he told Insider.
Airbnb declined to comment.
Luxury properties do well without trying
Luxury properties are staying booked, largely because their clientele is removed from the economic uncertainty facing budget travelers, short-term-rental property managers told Insider.
"It's a completely different clientele. They're not concerned with a dip in the stock market or whether we're expecting a recession," said Phoenix manager Ric Kenworthy, who oversees 92 properties.
Five of Kenworthy's listings fall in this luxury tier. They have infinity pools, bocce set-ups, pickleball courts, and cost up to $800 per night. Kenworthy said these properties have been 80% booked this summer, running higher than the projected average of 56%.
In Lake Arrowhead, manager Katie Kay Mead, who oversees seven Airbnbs, is seeing a similar trend.
A five-bedroom luxury lake house she manages comes with a game room, hot tub, and dreamy views of the water. It currently rents for $600 per night, and Mead said it's already booked for every weekend this summer.
Budget travelers this summer have 'Champagne tastes on a beer budget'
Meanwhile, with an abundance of listings to choose from, budget travelers are perusing with high expectations.
"They have Champagne tastes on a beer budget," Kenworthy said.
Hosts said, for many of the listings getting stuck in the mediocre middle, it comes down to aesthetics.
Scrolling through listings, guests are craving something that "jumps off the page," Kenworthy said. "People want to stay in a place that's nicer than the one that they live in."
In Phoenix, that means "crisp black and white modern" or "Spanish hacienda style." Drab, outdated interiors are getting passed over, he added.
In California, Mead said the listings that aren't staying booked look like "somebody in the family decorated in 1978 and everything is a time capsule."
"Broadly, the narrative is that you have to have higher-end finishes," Lane said. "You can't keep the 30-year-old grandma furniture in place, rent it out, and expect to get good occupancy levels."