'We've definitely seen a spike': Airbnb hosts gear up for a big travel year
Airbnb (ABNB) host Daniel Cruz feels a sense of excitement as the number of bookings for his properties tick up amid increasing demand from people eager to travel after two years of pandemic.
“We've definitely seen a spike,” the Milwaukee-based host told Yahoo Finance, adding that a recent motorcycle show in February and a Wisconsin Badgers game in March sparked a surge in bookings despite relatively cold weather in the Midwest.
Cruz, who is also the co-founder and CEO of washbnb, which provides laundry and linen services for short-term rentals like Airbnbs and Vrbos (EXPE), said the fever is being felt across the country.
“I speak with Airbnb hosts all over the country almost on a daily basis, and this spring is looking even better than last spring or even better than 2019,” Cruz said.
Leisure travel has started to boom as fears of the COVID-19 pandemic start to abate. Based on first-party data from Expedia, there’s “tremendous appetite for travel compared to 2020” with 68% of Americans planning an international trip this year.
Popular destinations being eyed are Rome, Bali, London, and Paris, according to the Expedia survey of 12,000 travelers across 12 countries.
'Hospitality is a recession-proof industry'
Data on bookings show very strong demand, and Airbnb hosts are eyeing big profits from the potential influx of tourists.
In February this year, year-over-year bookings of short-term rentals have exceeded pre-pandemic numbers, according to AirDNA, which tracks the performance of short-term rentals.
A total of 16.5 million nights were booked this February, according to the company, which is a 21% increase from last year. Spring travel is also looking to be higher as bookings are 26% higher than the same period in 2019.
Airbnb host Shondricka Carter, who owns two properties in Dallas, is planning to expand to five units by the end of 2022 given the return on investment in the last few months.
Carter, who estimated that her income from her two short-term rental units has been up 60% over the past month, told Yahoo Finance that “I don't anticipate a slow season until maybe fall or winter."
Hotels are also seeing occupancy rates tick up.
"Now is the time to get a great deal," HotelPlanner CEO Tim Hentschel told Yahoo Finance Live (video above). "There is quite a bit of U.S. travelers that want to get out there. We’re expecting a strong travel season for the summer. And that should get occupancies back to 2019 levels."
Higher costs loom for travelers
Travelers this year will likely have to accept higher costs as inflation remains elevated, airlines pass fuel costs onto customers, and demand picks up.
“The travel industry is anticipating that airline activity will be higher because there’s a lot of pent-up demand from the pandemic,” KPMG Global Head of Energy Regina Mayor told Yahoo Finance Live this week, adding that "unfortunately, I think in the near-term consumers will be seeing very high prices at the pump."
Placer.ai VP of Marketing Ethan Chernofsky said that may start hurting demand.
"While the sector has managed to show a strong rebound once again in February, new pressures from inflation and even gas prices are impediments to a full and more comprehensive recovery," Chernofsky told Yahoo Finance.
That hasn't happened yet: In the three weeks of March 2022 alone, the number of passengers traveling through a TSA checkpoint is up by 72% compared to last year. Still, the number of passengers has yet to return to pre-pandemic levels in 2019.
If travelers aren't able to afford hotel rates, hotels and rentals will adjust prices accordingly based on market forces, HotelPlanner's Hentschel noted.
"Inflation will eat into [the leisure traveler's] disposable income... [and] it will have an opposite effect on rates for hotels because as hotel occupancies drop, hotel rates drop," he explained. "So if we have inflation eating into people’s disposable incomes, then the rate should come down as occupancies drop."
In the meantime, hospitality-adjacent businesses like washbnb have been scrambling to meet demand. Bruz said that the company has been “furiously” raising money to stock up on inventory.
“We're just seeing this huge crush of demand from hosts out there," he said. "They're just waving their hands like: 'Please, we need help.'”
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Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.
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