As you may already know, the Airbnb market was hit hard by the coronavirus pandemic. With the stay-at-home directives and travel restrictions, Airbnb properties all over the world witnessed drastic drops in occupancy rates and rental incomes earlier this year. Back in May 2020, an Airbnb industry survey found that 70% of guests were afraid of staying at an Airbnb, while 47% of hosts were hesitant to rent out to guests. 64% of respondents said that they had either canceled or were intending to cancel upcoming reservations. Many hosts and Airbnb real estate investors expected their revenue to continue to drop throughout 2020.
However, a more recent report by Mashvisor revealed that the Airbnb industry is in recovery, on average. While some cities and hosts continue to struggle due to the pandemic, many others have seen their short-term rentals bounce back. Here are some of the cities that have shown an improved Airbnb occupancy rate from March to September 2020, according to the report:
- Milwaukee, WI: +31%
- Colorado Springs, CO: +29%
- Reno, NV: +28%
- Buffalo, NY: +28%
- Pittsburg, PA: +27%
When it comes to the revenue generated in the Airbnb industry, these are the cities that experienced the highest rise in monthly Airbnb rental income during the same timeframe:
- Buffalo, NY: +81%
- Philadelphia, PA: +68%
- Colorado Springs, CO: +61%
- Reno, NV: +54%
- Baltimore, MD: +49%
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It’s clear that many in the Airbnb industry are back to taking bookings and collecting their income. So owning an Airbnb can still be a profitable business in 2021. However, COVID-19 has changed the industry – there’s no doubt about this. And to succeed as an Airbnb property owner, you need to be aware of the following Airbnb travel trends:
#1. Increased Domestic Travel
Due to cleanliness and safety concerns, domestic travel will become a major trend in the Airbnb industry in 2021. A recent Airbnb survey revealed that 62% of people are planning to take vacations within driving distance from their homes. This is unlike 2020, when US travelers were targeting destinations like Rome, London, or Paris (before COVID-19 hit). There will also be a shift to more socially-distanced and remote spaces such as cabins, cottages, barns, tree houses, and Cycladic houses.
#2. Stringent Health and Safety Requirements
Airbnb has come up with a set of compulsory COVID-19 safety requirements for both guests and hosts of Airbnb listings. These rules are based on directives from the US Center for Disease Control and the World Health Organization. Here are some of the safety practices that Airbnb hosts and guests must adhere to in 2021:
- Wear a mask at all times when interacting in person.
- Remain 2 meters (6 feet) apart from each other.
- As a host, you must adhere to the Airbnb enhanced cleaning protocol.
- Do not host or travel if you suspect that you are sick or have tested positive for coronavirus within the past 30 days.
- Wash hands regularly with soap and water. Alternatively, use a hand sanitizer that has at least 60% alcohol.
- Common areas of your Airbnb income property such as kitchens and bathrooms must be cleaned and sanitized as often as possible.
#3. More Remote Workers Staying in Airbnb Rental Properties
Remote work will have an impact on the Airbnb industry in 2021.
Work from home (WFH) has become a popular buzzword in 2020 due to COVID-19. From July to September, there’s been a drastic rise in guest reviews mentioning ‘remote work’, ‘relocate’, ‘trying a new neighborhood’, and ‘relocation’. In the survey on the Airbnb industry, 83% of respondents said they wouldn’t mind relocating as part of remote work. About 20% have relocated either permanently or temporarily due to the pandemic. 60% of parents are considering traveling with their children and working remotely if school schedules continue being disrupted.
Due to this trend, many people are using Airbnb rental properties to test new cities and neighborhoods before making a permanent move. People are booking stays in locations that have wide-open spaces and immersive natural surroundings.
#4. The Rise of Pod Travel
Due to the risk of COVID-19 infection, traveling in a ‘pod’ is going to be an increasingly popular trend in the Airbnb industry 2021. This is where a group of family or friends take a trip together to minimize the risks of socializing with others. The participants can rent several cabins or a villa in order to stay together. Health protocols such as social distancing, mask-wearing, and washing of hands are observed in order to enhance safety. According to a recent Airbnb industry poll by Virtuoso, 79% of respondents said that they would participate in a travel pod.
Where to Invest in Airbnb in 2021 – “Trending Destinations”
Thinking of starting an Airbnb business in 2021? You’ll want to start searching for a rental property for sale in one of the best cities for Airbnb investment. Airbnb listed many “trending destinations” in the aforementioned survey. However, to ensure you choose only the best location for your Airbnb investment property, we’ve chosen to list here 7 major cities from the report with good Airbnb cash on cash return. The following data were obtained by using Mashvisor’s Airbnb analytics tools, including its Airbnb calculator.
1. Palm Springs, CA
- Median Property Price: $595,597
- Price per Square Foot: $328
- Average Airbnb Daily Rate: $380
- Monthly Airbnb Rental Income: $5,002
- Airbnb Cash on Cash Return: 4.9%
- Airbnb Occupancy Rate: 67%
2. Richmond, VA
- Median Property Price: $383,031
- Price per Square Foot: $192
- Average Airbnb Daily Rate: $137
- Monthly Airbnb Rental Income: $2,705
- Airbnb Cash on Cash Return: 4.9%
- Airbnb Occupancy Rate: 62%
3. Indianapolis, IN
- Median Property Price: $268,899
- Price per Square Foot: $124
- Average Airbnb Daily Rate: $142
- Monthly Airbnb Rental Income: $1,744
- Airbnb Cash on Cash Return: 3.4%
- Airbnb Occupancy Rate: 53%
4. Durham, NC
- Median Property Price: $362,750
- Price per Square Foot: $201
- Average Airbnb Daily Rate: $112
- Monthly Airbnb Rental Income: $2,035
- Airbnb Cash on Cash Return: 2.9%
- Airbnb Occupancy Rate: 59%
5. Greenville, SC
- Median Property Price: $433,543
- Price per Square Foot: $209
- Average Airbnb Daily Rate: $137
- Monthly Airbnb Rental Income: $2,224
- Airbnb Cash on Cash Return: 2.9%
- Airbnb Occupancy Rate: 57%
6. Santa Fe, NM
- Median Property Price: $663,937
- Price per Square Foot: $305
- Average Airbnb Daily Rate: $248
- Monthly Airbnb Rental Income: $2,035
- Airbnb Cash on Cash Return: 1.5%
- Airbnb Occupancy Rate: 55%
7. Boise, ID
- Median Property Price: $605,193
- Price per Square Foot: $270
- Average Airbnb Daily Rate: $99
- Monthly Airbnb Rental Income: $1,954
- Airbnb Cash on Cash Return: 1.1%
- Airbnb Occupancy Rate: 59%
Conclusion
With many parts of the world experiencing the second wave of COVID-19, the future of the Airbnb industry is still uncertain. If travel restrictions and stay-at-home orders become the norm again, we may see another slowdown in the industry before the end of 2020. However, it’s clear that Airbnb is resilient. Even during the pandemic, hosts have managed to keep occupancy rates high and generate revenue. So if you make the necessary preparations, you can run a successful short-term rental property business in 2021. Just be sure to stay updated on travel in 2021 and the latest Airbnb industry trends.