Up until the COVID-19 outbreak and the heavy restrictions on travel that followed, Airbnb and the broader short-term rental market had been the fastest growing travel accommodation segment, as well as an attractive property investment opportunity. The industry has been professionalised and offers a wide variety of lodgings, from unique and exotic rentals in remote locations to luxury beachfront vacation homes.
Since late March — early April COVID-19 has virtually stopped travel, putting Airbnb and Airbnb management companies under pressure. Doomsday scenarios were all over the news headlines, however, very few realised that unlike hotels short-term rentals have always catered to a broader pool of people looking for flexible accommodation. Travel was a major use case but certainly not the only one.
As soon as the restrictions tightened and mobility was reduced, we immediately began to see the growth of the following guest segments:
COVID-19 has forced many companies to adopt remote working policies. As a result many people started questioning their usual location of residence and sought an alternative, especially in scenic areas, to live and work from even for just a month or two.
A shift towards working from home has also made many people reconsider the cities and locations they live in. We have seen a number of guests relocate interstate while others have used Airbnb as a temporary rental within their own city to explore which areas they would prefer to buy their own property in.
Homebuilder programs and potentially long periods of time spent at home have resulted in an upswing in home renovations. As a result, many families turned to Airbnb for temporary accommodation while their home was under renovation.
With overseas travel not being an option, we have seen a substantial rise in the demand for domestic travel and weekend getaways. We expect this trend to continue as the domestic restrictions ease and international travel potentially remains limited for the rest of this year.
Extended stay travellers
Business and other non-leisure travel has changed as well. In order to reduce the travel-related risks many people have reduced the frequency of their travel but extended the stay lengths for the trips they have to take. As a result, we’ve seen an increased demand for non-hotel accommodation in this segment. Hotels have always served as a good option for a day or two, but home-like accommodation has always been the primary choice for longer trips.
All of these guest segments have been looking for and most likely will continue to look for alternatives to regular lease agreements, as well as a digital-first booking process. Reviews have replaced property inspections and have helped people pick an all-inclusive accommodation offering without encountering the typical hurdles of leasing a property even on a 1–3 month basis.
Despite the broader market turmoil, Airbnb has proven its versatility and spotlighted the broader market demand for flexible rental options. As the world adapts to a major shift in the way we live, work and travel, we are confident that new use cases and flexible accommodation will emerge and present lucrative opportunities for property investors.