Bea’s apartment on Toledo Street, a stone’s throw from La Latina, worked very well on Airbnb. “Until all this started and all the reservations were canceled. From March, April and all the ones we had planned for the summer season,” says this woman from Madrid, who has been practicing holiday rentals since 2017.
The tourism sector is one of the most affected by the coronavirus crisis. The World Tourism Organization foresees a drop between 20% and 30% this year. This would translate into losses of between 30,000 and 50,000 million dollars worldwide. Airbnb charges the blow. Apart from massive cancellations, reservations are paralyzed in much of the world. In Spain, since March 20.
Transparent’s projection, an analyst firm in the short-term rental sector, calculates an occupation of tourist apartments at 11% at the end of April, when in 2019 they were at 38%. The forecast for mid-summer is 16%, compared to 60% last year. In order to defuse its economic losses, Airbnb has raised $ 2 billion in debt and investment. Their accounts before the pandemic did not have a positive balance. Although it billed $ 4.8 billion in 2019, recorded losses of 674 million.
In its fall, Airbnb drags thousands of people (only in Spain there are offers 300,000 properties) who rent their apartments or rooms on the platform. Despite the presence of real estate funds, smallholders are still a very relevant part of the offer. From the company they affirm that in Spain, 50% of the hosts have stated that they need the income they get from travelers to make ends meet.
Bea’s 58-square-foot, two-bedroom apartment provided a steady stream of income for her and her partner. “We bought it three years ago as an investment and we started testing on Airbnb. It has always worked very well for us.” They earned between 1,600 and 2,300 euros a month.
“We paid the mortgage with what we earned from the rent,” says Bea. “This month will be zero income, so we have to take care of our money.” He explains that the earnings from the flat do not touch them, but now “heck them, because they are savings.” They live with their two children in another apartment in Madrid, also with a mortgage.
Bea, who offered her Airbnb apartment to the Community of Madrid to welcome restrooms without getting a response, is a travel agent. This now almost ensures ERTE. In your case, it has been fulfilled: your company has cut 90% of the workforce until 2021.
Iván lives in the center of Barcelona, in L’Antiga Esquerra de l’Eixample. She has been renting a room in her house since 2014. “In April the high season started, so it had a 90% occupancy,” he says. “Where I live we are in a good area, so we usually have no problem with the location.”
His Airbnb income – about 1,500 euros – gave him to cover the rent, which two years ago suddenly raised 300 euros. “I am on leave and it was a good help, let’s say, to live well. It has helped us to continue living here. If not we would have to be living in a place much further away ”. He worked in hospitality, his partner is a teacher and they also have two children.
Airbnb has established a relief fund to the 250 million dollar hosts. It will apply to reservations made until March 14 that cover dates between that day and May 31. The company will pay 25% of the amount that the host would have received according to its cancellation policy. This nuance is important, because if the policy was flexible (free cancellation up to two days before entry), it will be more difficult to access these grants. According to Transparent, 39% of hosts work with flexible policies. Another $ 17 million fund has also been created to help so-called ‘superhosts’ who need rental or mortgage help. Aid will begin to arrive this April.
Iván is pending the emails that Airbnb sends him these days, to find out if he can avail himself of the aid. Recovery does not see it close. “Everyone gives up until August.” With little conviction he adds that the income could return in that last phase of the summer. “We hope it will come back again, but everything is uncertainty.”
Traditional long-stay rental is postulated as an alternative to tourist rental. Airbnb itself tries to direct efforts towards this field, with a view to welcoming students or people who spend time away from home for work. Some hosts have chosen this path on their own. Bea has tried to put her apartment on Calle Toledo in Idealista, for 800 euros a month. In five hours five people and an agency called him. “We have had the idea of putting it up for long-term rental to at least cover expenses,” he says.
From Idealista they reply that they have not noticed a flood of flats from the tourist rental, but they recognize that this phenomenon would be difficult to measure. This is also not an immediate solution. “Everything is stopped,” says Bea. “Right now you can’t show the floor. And logically people want to see and be on the floor before signing anything.” In addition, Bea and her partner have a doubt: “We do not know if by renting it in a long stay we lose the vacation rental license,” he says, referring to the permit granted by the Madrid City Council and which they have had since they started this.
The flight to the field
In the municipality of Candeleda, in the province of Ávila, Pedro has two cabins that he rented for Airbnb. They are two houses lined with wood to give them the rural touch that the enclave deserves. Visitors have access to a six-hectare farm, crossed by a small forest and from which you can see the Sierra de Gredos. His thing was the weekend getaways. “We had booked Easter and in early April,” says the owner. “They were just over 600 euros, which fixed me the month.”
These types of rural accommodation offer better forecasts than urban ones, according to the analyst firm AirDNA, specialized in vacation rental. They attribute this tendency to the search for social distancing. Transparent data They highlight that some rural departments in France, such as Lozera and Haute Saône, had large increases between March 11 and 25 (the country entered confinement on March 17). At the same time, both Paris, the Alps and the Cote d’Azur region suffered sharp falls.
Pedro has been asked about his cabins. A client who has been there before wants to stay the entire month of July. “We have had few long stays. We worked more on weekends. Sometimes we have had people a week in a row, but an entire month has never been rented, “he says. Although above all there is uncertainty. The owner of the cabins knows that after the coronavirus storm will come “the matter of the people’s economy”, as he says.