- As the coronavirus devastated the global travel industry, Airbnb laid off nearly 25% of its employees, raised emergency debt funding and at least temporarily shelved its highly anticipated IPO.
- The one bright spot: Rural hosts are seeing huge surges in business.
- According to Airbnb, hosts in rural areas of the U.S. earned over $200 million in June 2020 — an increase of more than 25% from the previous June.
2020 has not gone according to plan for Airbnb. The tech company came into the year preparing for a highly anticipated IPO, but then the coronavirus pandemic changed everything.
But there is one bright spot. While urban Airbnb hosts have suffered heavily along with traditional hotels and travel companies, Airbnb hosts in rural areas are seeing huge surges in business.
These rural Airbnbs for local getaways are all the rage as Americans jump at opportunities to escape the confines of their homes and the stress of the ongoing pandemic.
Trisha Mixer lost over $40,000 worth of bookings for her two properties outside Austin, Texas, when Covid-19 hit. But once the state started reopening in May, she said, she was "barraged" with requests.
"You could tell people were desperate," Mixer said.
Mixer's two properties, a lake house and a cottage, are 30 and 90 minutes away from Austin, respectively, and the majority of her recent customers are other Texans — even people from Austin who just want to get away. Summer weekends have always been popular, but this year she hasn't had to do extra to fill up weekdays too.
Mixer even raised prices a little to try to slow down the pace of bookings, but it didn't work. Her properties are filled through the summer, and weekend business looks steady through the end of October.
The data supports the popularity of rural renting. According to Airbnb, hosts in rural areas of the U.S. earned over $200 million in June 2020, an increase of more than 25% from the same period a year ago. Airbnb also said more than nine of every 10 dollars earned by hosts for June trips inside the U.S. were for sites outside the 10 biggest American cities by population.
Airbnb's data also supports hosts' speculation that guests are choosing to stay local. In New York, for example, Airbnb hosts earned over $5.8 million from guests living within 300 miles during June, according to data from the company.
"Many families are looking to stay in short-term rentals because it gives you a little more control over your environment, a little more privacy," a spokeswoman for Airbnb told CNBC. People can access these quieter areas by driving and still practice social distancing while going outdoors, she added.
Jacki Hannon, a host in upstate New York, is capitalizing on this shift. She adjusted her social media posts and Facebook advertising to emphasize the peace, solitude and "off the beaten path" atmosphere available at her cabin 10 minutes away from Lake Ontario.
Now it's booked at a higher rate than ever before, and most of her recent customers are from the greater New York City area. This is a welcome development. She has been trying to target the downstate area for some time with "meh" results, she said, but now, those renters are "finding me on their own."
Location isn't the only change renters are making. People are also looking to go away for longer. The average stay length has increased 18% to 4.27 days between January 2020 and June 2020, according to AllTheRooms, an aggregator of data on the vacation rental market. At its peak in April, just after the majority of shutdown orders, the average stay lasted 7.43 days.
"It really looks like individuals and families [are] choosing to get away from densely populated areas and wait out the virus," said Joseph DiTomaso, CEO of AllTheRooms.
Many hosts noticed the same thing. Those whose weekends usually filled up first now have no problem booking weekdays as well, because people are staying through the week. Guests are also booking with less lead time — they just want to get away quickly.
Rural hosts emphasize their WiFi can hold up. They are fielding requests from guests who want to do a little remote work while still enjoying the getaway.
Guests are also coming in larger groups. Several hosts noted a trend of larger, multigenerational families organizing vacations together. Hannon, whose cabin fits 10 people, has also seen the rise of the mid-20s friend group looking to get away from New York City — like the "getaway of my youth that I remember," she said.
On these getaways, just some space and, if possible, a swimming pool might be enough. At Kathryn Langer's property in Lake Travis, Texas, which sleeps nine people and does have the coveted pool, it is the "busiest and craziest" time in her four years of hosting on Airbnb.
People are "stir crazy," she said, adding that she had a guest who booked in May and then rebooked for August without having visited the first time yet.
Langer is in a unique position to see the difference in rural-urban demand because her urban property in Fredericksburg, Texas, where she said people come for shopping, wineries and restaurants, remains practically a "ghost town." Girls' weekends and bachelor or bachelorette parties are no longer providing a steady stream of guests. But Langer, who relies on hosting as her only source of income, has been relieved to see demand for her rural retreat recover.
As summer continues, the most sought-after states are those known for their rural getaways, according to AllTheRooms' data. The states with the greatest year-over-year increase in bookings for the next 90 days are Oklahoma, Arkansas, West Virginia, North Dakota and Iowa. Meanwhile, bookings have dropped around 25% from last year for California, Massachusetts and New York.
But as the coronavirus continues to flare up in many places across the country, it's an open question whether shutdowns or rising anxieties will affect demand again. Just being in a rural area isn't automatically safer, of course.
"The question is not about population number but density," said Dr. Ashely Alker, who works in emergency medicine and has treated Covid-19 patients. "You are safer in a city using adequate social distancing than in a rural area if you are going to surround yourself by people in bars, restaurants and boardwalks."
Alker also pointed out that many of these smaller vacation spots attract people from the same nearby cities, so you may not be getting away completely. She noted rural areas may have less hospital capacity as well.
These reminders are not to discourage people from traveling at all. Alker said it's important to continue doing the "simple things" such as wearing masks and distancing, even while on vacation.
Airbnb has also developed an "enhanced cleaning protocol" informed by CDC guidelines to help hosts demonstrate the safety measures they're taking so that guests can make responsible decisions.
When so many travel plans have been disrupted, perhaps people are more appreciative of the local getaways they wouldn't have otherwise chosen. Amid the surge in rural demand, there's been one other change Hannon noticed: "The reviews have been better than I've ever seen."