After its 2008 launch, Airbnb (ABNB) - Get Free Report quickly revolutionized the way people traveled -- not to mention launching a whole new segment of the gig economy.
Many Airbnb owners have also shared how much money they make annually from the platform, with Hawaii, Tennessee, and Arizona being several of the most lucrative places.
Or at least, they were. A recent report from short term rental analytics company All The Rooms reveals the data on what many have been calling the Airbnb collapse, showing that some cities' Airbnb revenue has dropped close to 50%, with Sevierville, TN down -47.6% from 2022. Phoenix, Z and Austin, TX also top the list at -47.2% and 46.1% respectively
Many speculate that the reason for the crash is the contrast between a surge of travel in 2022 as the pandemic eased and this year, where rising cost of living and a looming recession have people pulling back on travel spending.
However, another issue is sheer density. In his thread on the topic, CEO of Reventure Consulting Nick Gerli explains that while the number of Airbnbs and VRBO rentals has continued to rise as the years have gone on, the number of homes for sale has gone down -- which causes what Gerli calls "a huge home price downside."
Gerli also says he thinks newbie Airbnb owners could be in trouble, especially if they bought a property over the past few years and have a mortgage.
"They got in at a high price. And have a high monthly payment. And little margin for error. They could be some of the first to sell later in 2023 when the season ends," he says.
On the other hand, the situation looks better for more experienced Airbnb owners, especially those who "got in before the pandemic," he says.
"They paid less for their Airbnb. Have a cheaper mortgage rate. And more experience. They will be less inclined to sell."
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