From reading my posts, you would know that I’ve been an Airbnb host for a few years. It has been a tough job for my wife and I, but certainly worth it for the above-average returns. However, we were presented with a unique challenge to our home sharing journey last year, in the form of COVID.
Initially, this felt like an existential threat to our home sharing plans. Widespread lockdowns, mandatory quarantine periods and social distancing isn’t welcome news for a business that makes available homes to strangers. However, the following post outlines why we will continue to be hosts even after the pandemic is under control.
COVID’s Impact In My Market
While Australia was not immune to COVID-19, it has certainly fared better than other countries. As of April 2021, Western Australia (my home state) recorded a total of 978 cases. This roughly translates to 1 case in every 2,700 people. More importantly, there have been no deaths since October 19th of last year.
My thoughts are that Australia’s success against the virus is due to a combination of strict governmental control, Australia’s geographic location and population density. Australia is an island, so it is better placed to manage foreign travel than bordered countries. Secondly, Australia’s average population density is 3 people per square kilometre (9 people per square mile), which is one of the lowest in the world.
Finally, and perhaps most importantly, is the governmental intervention. Australia was among the few countries that adopted immediate and severe restrictions on its residents and foreign travellers. The country went so far as to close down state borders to prevent intra-state transmission. Furthermore, local governments have been vigilant in monitoring case numbers and resuming lockdown measures if necessary.
While these measures were critical to managing the virus outbreak, they did hamper home sharing reservations. However, the impact was not catastrophic, as outlined in the next section.
Home Sharing Was Quarantine Approved
I received nearly $14,000 worth of cancellations between March and May 2020. Almost all of the cancellations were from foreign travellers who could no longer enter the country. However, some were from domestic travellers which no longer felt comfortable entering premises that weren’t their own.
While one traveller door was closed, another one was conveniently opened. For those readers unaware, Western Australia has an enormous mining sector. A large portion of the mining workforce live away from the mine site, oftentimes even overseas. Therefore, most of these workers couldn’t return home given the border lockdowns and quarantine restrictions.
Enter the home sharing market. Airbnbs were made available to distressed workers, provided those homes were not already occupied by the host. Further, as quarantine periods typically ranged from 7-14 days, this provided greater certainty for hosts in managing bookings.
We personally benefited from these circumstances. In the initial months, we received a string of reservations from workers stuck in Perth. While they didn’t make up the cancellations, they certainly helped. Importantly, some of these stays were 14 days or longer. As such, we were able to reduce our exposure to the homes for cleaning/maintenance, thereby reducing our potential exposure to catching the virus.
The Easing of Restrictions Only Improved Our Position
Over time, the case numbers started falling and local governments grew confident in easing restrictions between states. This increased movement only bolstered home sharing stays. Further, as quarantine periods remained in effect, the increased demand meant lower monthly vacancies and an increase in future bookings.
As international travel remained shut, we began witnessing a ‘staycation’ renaissance. A large portion of our guests were regional travellers who were growing stir-crazy and longed for a change in scenery. Some of these guests enjoyed the experience so much that we even received some repeat business!
You Should Never Bet Against People’s Desire to Travel
It is an obvious fact that COVID materially changed human behaviour. Some may have experienced a paradigm shift in the way they live. However, it seems that the majority cannot wait to return to the way things were.
In a recent KPMG survey, 61 percent of Australians surveyed noted that they would book a trip in the first half of 2021, whereas 72 percent stated they would definitely travel after June 2021. Further, domestic travel is the sole and obvious winner, given unfettered international travel is not expected in 2021.
This pent-up demand is positive for home sharing hosts, who are desperate to make last year a distant memory. If anything, we may even see booking volumes that rival and perhaps exceed pre-pandemic levels. Alas, one can be hopeful.
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While the pandemic was surprising and temporarily damaging, it has not changed my position on being an Airbnb host. In fact, I plan to continue home sharing until I lose the passion for it or I am no longer physically able to manage the responsibility.
However, I fully appreciate that my experiences are not representative of all home sharing hosts. My Airbnb experiences last year were certainly coloured favourably by where I live. While I am not trying to discount the pandemic’s damage to some hosts, I do strongly believe that not even a global pandemic will prevent humans from travelling again. After all, it is in our nature.
If you’re interested, you can read my earlier post on how I became an Airbnb host.
The content outlined above was written, edited and published by the Lost Realtor. The author has over 20 years or real estate sales and investing experience in the Australian property market. He has held senior positions in Australian building companies, including being the General Manager of the residential sales division of Collier Homes. His qualifications include a Bachelor of Commerce degree and a Graduate Diploma in Building and Construction Law.