Bea’s apartment on Calle Toledo, a stone’s throw from La Latina, worked very well on Airbnb. “Until all this started and all the reservations were cancelled. For the month of March, for the month of April and all the ones we had planned for the summer season,” says this Madrilenian, who has practiced vacation rentals since 2017.
The tourism sector is one of the most affected by the coronavirus crisis. The World Tourism Organization predicts a drop between 20% and 30% this year. This would translate into losses between 30,000 and 50,000 million dollars worldwide. Airbnb accuses the blow. Mass cancellations aside, bookings are at a standstill in much of the world. In Spain, from March 20.
The projection of Transparent, an analyst firm in the short-term rental sector, calculates an occupation of tourist apartments of 11% at the end of April, when in 2019 they were at 38%. By mid-summer the prediction is 16%, compared to 60% last year. In order to offset its financial losses, Airbnb has raised $2 billion in debt and investment. Their accounts already before the pandemic did not have a positive balance. Although it invoiced 4,800 million dollars in 2019, it registered losses of 674 million.
In its fall, Airbnb drags the thousands of people (only in Spain there are 300,000 properties offered) who rent their flats or rooms on the platform. Despite the presence of real estate funds, small owners 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 obtain from travelers to make ends meet.
Bea’s 58-square-meter, 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 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 there will be zero income, so we have to take care of it with our money.” She explains that the profits from the flat don’t touch them, but now “he gives them hell, because they are savings.” They live with their two children in another flat in Madrid, also with a mortgage.
Bea, who offered her Airbnb apartment to the Community of Madrid to welcome toilets without receiving a response, is a travel agent. This now almost assures you the ERTE. In his case, it has been fulfilled: his company has cut 90% of the workforce until 2021.
Iván lives in the center of Barcelona, in L’Antiga Esquerra de l’Eixample. He has been renting a room in his house since 2014. “High season started in April, so he had 90% occupancy,” he says. “Where I live we are in a good area, so normally we don’t have a problem with the location.”
His income from Airbnb -about 1,500 euros- gave him to cover the rent, which two years ago suddenly rose 300 euros. “I’m on sick 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 much further away place.” He worked in the hotel industry, his partner is a teacher and they also have two children.
Airbnb has established a $250 million host relief fund. 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 their 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 aids. According to Transparent, 39% of hosts work with flexible policies. Another fund, of 17 million dollars, has also been created to help the so-called ‘superhost’, who need help with rent or mortgage. The aid will begin to arrive this April.
Iván is aware of the emails that Airbnb sends him these days, to find out if he can benefit from the aid. Recovery is not close. “Everyone gives up until August.” She half-convincingly adds that the income could come back in that last phase of the summer. “We are hopeful that it will pick up again, but everything is uncertain.”
Traditional long-term 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 had the idea of putting it on long-term rental to at least cover expenses,” she says.
From Idealista they reply that they have not noticed a flood of apartments from tourist rentals, but they recognize that this phenomenon would be difficult to measure. Nor is this an immediate solution. “Everything is stopped,” says Bea. “Right now you can’t show the flat. And logically people want to see and be on the flat before signing anything.” In addition, Bea and her partner still have a doubt: “We don’t know if by renting it for a long stay we lose the vacation rental license,” she comments in reference to the permit granted by the Madrid City Council and that they have had since they started in this.
The escape to the field
In the municipality of Candeleda, in the province of Ávila, Pedro has two cabins that he rented through Airbnb. They are two houses clad in 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 the Sierra de Gredos can be seen. His thing was weekend getaways. “We had reserved Easter and at the beginning of April,” says the owner. “It was just over 600 euros, which fixed the month for me.”
This type of rural accommodation offers better forecasts than urban ones, according to the analyst firm AirDNA, specialized in vacation rentals. They attribute this trend to the pursuit of social distancing. Transparent data highlights that some rural departments in France, such as Lozera and Haute Saône, had large increases between March 11 and 25 (the country entered lockdown on March 17). At the same time, both Paris, the Alps region and the Côte d’Azur suffered sharp falls.
Pedro has been asked about his cabins. A client who had been before wants to stay the whole 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 a whole month has never been rented, ”he says. Although above all there is uncertainty. The owner of the cabins knows that after the coronavirus storm, “the issue of the economy of the people” will come, as he says.