Why now is the time to get in (or double down on) the STR game...

[Dave Stokley]

“Be fearful when others are greedy and greedy when others are fearful.”

-Warren Buffet

When the pandemic struck at full force back in March there’s no doubt it dealt a major blow to the short-term rental industry. My company lost dozens upon dozens of bookings in a matter of days, totaling untold thousands of dollars. We didn’t even bother to add up the damage.

Instead, rather than panicking, we were able to quickly shift gears and cater our units to people who still needed a place to stay, such as essential workers and people in quarantine. We kept our units full by slashing prices and jacking up long-term stay discounts, and while it still amounted to significant losses for us, we were able to weather the storm.

Many hosts weren’t so fortunate, or simply didn’t see the value in fighting through. Still others were understandably infuriated by Airbnb’s decision to allow guests to cancel and get a full refund at the expense of the host and left the platform altogether.

Today, demand has surged back to life. Yes, it’s a different landscape with a new type of traveler, but the data clearly shows there are people who want and need short-term rentals.

Add this all up and you’ve got perfect market conditions to dive in headfirst:

1. Competition is low.
2. Demand is high.

Competition

As noted above, people have been fleeing the short-term rental game for a variety of reasons. In our primary market, Cleveland, OH, active listings have dropped 29% since the first quarter of 2020 (from 1,672 listings to 1,190). Likewise, in a nearby suburb in which we also operate, active listings have dropped 24% since 1Q 2020.

Demand

There are all kinds of statistics and analytics out there suggesting that STR demand has returned, but here's one that I can guarantee you is 100% true and unbiased: our 14 units have been at 93% occupancy for the past two months, and prices are on the rise too.

According to PriceLabs, a dynamic pricing tool for STRs, new bookings in North America have returned to pre-COVID levels, and according to STR Profit Academy, Airbnb saw more nights booked for US listings between May 17 and June 3 than the same period in 2019. Additionally, U.S. Google searches for "Airbnb" are at an all-time high.

Conclusion

At the end of the day, we’re as close to 0 tourism as we’ve ever been and we’re still booking 93% of our nights. Even when the virus is gone we may be still be facing a recession, during which people will still travel but they’ll want to do it cheaper and will turn to Airbnb.

A lot of investors are fearful of such a potential recession, and it’s causing them to miss opportunities to build wealth. History shows that more wealth is created during a recession than any other time, because things are on sale while the underlying fundamentals remain the same. So when a recession does happen – and it will – you’re going to want to have cash on hand to take advantage. STRs are the perfect way to boost your cash flow, and the market will probably never be more favorable to get into the game.

Airbnb was started in the midst of one of the worst financial crises in US history back in 2008. The current market conditions are probably the best you’ll ever see to get started with short-term rentals.