We'll All Be Renting a Local Airbnb This Summer
(Bloomberg Opinion) -- In Whitstable, a British seaside town just over an hour’s drive from London, every day of the last two weeks has been like a busy summer weekend. Britons may be unable or unwilling to take international flights, but with the first easing of lockdown restrictions, they are more than happy to head to the beach to bask in the sun and eat fish and chips from the only restaurants open for now.
Optimism that people everywhere will be eager to wander once travel restrictions end drove a rebound in airline and tour-operator stocks this week. But these hopes may be overdone. Lingering health-safety concerns and uncertainty about which borders will open mean many consumers on both sides of the Atlantic will stick close to home this summer.
What’s more, they may favor a remote Airbnb rental instead of staying in a hotel, with the increased chances of running into other people in the lobby, elevator or restaurant. Globally, new bookings at Airbnb Inc. and Expedia Group Inc.’s Vrbo more than doubled from 916,000 in the week of April 5 to 2.08 million in the week of May 18, according to AirDNA, a short-term rental data provider.
While the home-sharing site Airbnb has been hit hard by the travel trough, it said domestic bookings rose strongly in China, Korea, the Netherlands and Denmark in April, and they’ve increased significantly in Germany since the beginning of May. More telling, Chief Executive Officer Brian Chesky told the Associated Press that 30% of bookings are currently within a 50-mile radius of people’s own homes — basically the next town over — up from 13% before the novel coronavirus outbreak, a trend he attributes to people’s aversion to flying for now.
Areas that tourists can drive to, and classic local vacation spots, such as the mountains, lakes and beaches, are proving resilient.
Take Germany, a country known for exporting summer tourists. Short-term rentals in the North Sea coastal district of Nordfriesland, which includes the island of Sylt, enjoyed an almost 800% increase in bookings between March 22 and May 17, according to AirDNA. And it’s unlikely they’re coming from abroad — in general just 16% of visitors are from outside Germany. By contrast, Berlin, a popular destination for foreign visitors, has seen just a 71% increase.
It’s a similar picture in the U.S, where rentals near beaches in Alabama, Texas, Georgia and the Carolinas are proving popular. By contrast, cities such as New York and San Francisco are recovering more slowly.
In this Covid-19 crisis, home-rental sites tend to have an advantage. For example, the majority of Airbnb hosts are in less populated areas, while most hotel chains have a bigger presence in cities. Some of the lodging giants have also ventured into the holiday rental market. Four years ago, French hotel giant Accor SA acquired Onefinestay, an upmarket competitor to Airbnb.
One potential drawback with private rentals during the pandemic is that guests have to trust hosts are cleaning and disinfecting well. Hotel groups including Accor, Marriott International Inc., Hilton Worldwide Holdings Inc. and InterContinental Hotels Group Plc have announced stringent hygiene standards.
Airbnb has responded with its own guidelines developed with former U.S. Surgeon General Vivek Murthy, including advice on personal protective equipment and disinfectants. Hosts who sign up can leave their properties empty for just 24 hours between guests. Otherwise, they must respect a 72-hour “booking buffer.”
For other people, getting away from home may mean taking their lodging with them. Provisional bookings at caravan and campsites in the U.K. look promising. In the U.S., there’s been a bump in demand for motor homes. Indeed, road trips may be one of the first holidays taken on both sides of the Atlantic.
While all this pent-up demand is a good sign, it’s unlikely all the money usually spent on overseas travel will be recouped. Staycations aren’t really conducive to flagrant discretionary spending in normal times, but the coronavirus outbreak and lockdowns has brought job losses and economic hardship as well. That will eat into outlay. For a gauge of comparison, in 2017, the year after Britain voted to leave the European Union, the decline in the pound meant many people avoided international travel, but only 60% of what would have been spent abroad was redirected to the U.K., according to analysts at Bernstein.
With this crisis, the effect could be even more extreme if shops have to restrict the number of patrons, local tourist attractions can’t open or people remain nervous about going to restaurants or bars even with all of the necessary social distancing measures in place.
Indeed, although Whitstable Holiday Homes, an agency for 39 houses, is enjoying its usual high level of bookings for July and August, further out, customers are waiting. A crucial consideration will be whether the town’s vibrant eateries will be open alongside the fish-and-chip shops.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.
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