I Talked to 45 STR Experts About Business Solutions to COVID-19 and This Is What I Learned

I Talked to 45 STR Experts About Business Solutions to COVID-19 and This Is What I Learned

covid solutions short term rentals

With so much changing in such a short time, Airbnb hosts are scrambling to adapt to a new reality. One where coronavirus has completely halted global travel. The Airbnb coronavirus cancellations continue to hurt hosts, with many struggling to figure out what to do.

This article will discuss important Airbnb updates, advice for hosts, and provide two resources.


Get the STR Coronavirus Survival Kit

We created a resource with swipe files, lists, tips and actionable how-tos for getting your business through this crisis.

What Airbnb is Doing

For Healthcare Workers

Airbnb announced it was offering 100,000 free (or subsidized) Airbnbs for coronavirus responders. If you’re looking to be a part of this initiative, you can sign up on Airbnb. The one requirement is that you adhere to certain cleaning standards.

However, the responsibility of this initiative falls on hosts. After all, for Airbnb to meet its goal of providing stays to COVID-19 responders, the 100,000 hosts are the ones offering their homes and units up, not Airbnb.

While Airbnb is a platform that connects hosts with relief workers, it’s the hosts who are taking a massive hit. They’re the ones being affected by the cancellation policies and city shutdowns. 

short term rentals covid

For many hosts, this is just another example of Airbnb taking its hosts for granted. There’s already a sense that we aren’t really being supported by Airbnb. The fact that Airbnb unilaterally allowed guests to cancel caused a rupture in hosts’ trust with the company that was felt across the globe.

For Airbnb Hosts

Airbnb has made some efforts to support their hosts. 

One of their most recent initiatives has been to offer $250 million to support hosts impacted by cancellations. This will cover up to 25% of what hosts would’ve received under their cancellation policies for check-ins between March 14 and May 31.

Airbnb has also set up a $10 million relief fund for superhosts. This includes grants of up to $5,000.

For US hosts, Airbnb has managed to secure support for hosts in the recent COVID-19 Stimulus Bill. This will allow hosts to take advantage of relief measures such as SBA loans and unemployment assistance.

Hosts can apply for SBA loans if they have teammates or employees, and self-employed hosts can apply for unemployment. This is especially helpful for hosts who depend on income from their listings to survive.

short term rental coronavirus updates

While these are difficult times, Eric and I expect to see more and more people coming together to support each other. We’ve already seen some of this happening, so it’s not all doom and gloom.

How COVID-19 Affects Hosts with Different Business Models 

Depending on your business model, COVID-19 might be affecting you differently.

Rental Arbitrage Hosts

The hosts who are the most in trouble are those who engage in rental arbitrage, i.e. renting units to list on Airbnb. Because, now, they’re getting very few bookings and still have to pay rent.

Rental arbitrage is a great model when done correctly and when the market is stable, but it can be extremely risky. We’re watching the model backfire on a macro-level, as VC-backed companies using the rental arbitrage model are suffering.

Lyric, for instance, has recently confirmed that it will have to lay off 80% of its staff if the market doesn’t improve in two months. Combined with their decision of letting go of almost 400 properties in 10 different cities, this paints a clear picture of the riskiness of rental arbitrage.

If there’s any disruption (such as a virus) and cash flows stop, hosts are tied into these contracts and properties. They don't really have any real assets to protect themselves.

Because no one saw this coming, people who are leveraging rental arbitrage are taking the biggest hit. Because they don't have assets, there’s nothing they can sell off or re-leverage to get cash to stay above.

airbnb coronavirus updates

While this isn’t saying that we’re never going to do rental arbitrage in the future, this is a warning. Hosts have to look at their business models and reconsider how they want to scale.

This is super important because we’re watching so many companies fold up because they didn’t pay attention to their cash flow. It was so easy to make money on Airbnb alone in past years that a lot of people thought the money was going to keep coming in. They didn’t pay attention to their reserves and are facing the consequences now.

Even key industry players are being affected by this, and it’s reminding many of us that we need to look at our properties like CEOs.

That means asking yourself:

  • What can I do now to survive the next winter?

  • How leveraged am I on these properties?

  • What do my cash reserves look like?

The rental arbitrage model has already faced some challenges with all the recent regulations. Combined with increasing competition, many hosts have been struggling to stay afloat in major markets.

Co-Hosts and Property Management Companies

The individuals who are being supported right now are co-hosts and property management companies. Their biggest expenses are their team and companies, not the properties they’re running.

Advice from Industry Professionals 

Eric and I recently spent 4+ hours on a mastermind call with 45 entrepreneurs all over the US to discuss current events and action plans. This call included some of the top real estate investors.

These are the people who have their thumb on the pulse when it comes to blue-collar America. They not only make millions but also are tied into their communities, so they can see the impact COVID-19 is having on people.

They’ve also been real estate investors for years, through 9/11 and 2008, so they understand how to survive crises and pivot.

Here are some key takeaways from that call.

1. Stay Calm and Get Good Guidance 

One of the most important pieces of advice is to stay calm and keep your emotions under control. Because this is a turbulent time, you’re going to have to make a lot of important business decisions. Both Eric and I have completely shifted our business models, so things are a bit all over the place currently.

airbnb coronavirus updates

2. Stay Focused

It’s particularly important that you stay focused. We know this is especially challenging now that the status quo is completely blown out of the water. We all have to find a baseline and re-calibrate.

With all that’s going on in the world, it can be easy getting distracted by the news and social media. These channels are probably going to make you feel more pessimistic, so you need to cut them out (or limit them) and focus on your business.

Easier said than done.

It can be very compelling to jump ship and do something new, but that’s when we have to double down on our businesses.

This will be especially challenging for hosts whose revenues have been cut off. Our minds go into survival mode, looking for new ways to get money. We search for the next “shiny object”, trying to pivot and create something new. This is a beautiful reaction because it’s part of being human and an entrepreneur.

That said, it’s still in your best interest to focus on your business. Believe in your business model, what you’re building, and the impact you’re having.

If you put on the blinders, say no to everything else, and take action every single day, you’re going to come out of this better than before. It’s going to be difficult now, but we’ll get through this.

But, if you’re scattered, looking for all these new opportunities, you’re going to open up more problems than opportunities. In other words, stop believing that something else is going to solve the problem. Focus on your current business and believe in your business model.

short term rental coronavirus

Are you going to focus ruthlessly on what needs to be done?

Or are you going to be so distracted by the news and social media that you spend your days doing nothing?

3. Take Action and Stay Positive

Another important takeaway is that you need to be taking action right now. The people who are ahead of the curve tend to do the best in these types of environments.

Because we expected to hear a lot of doom and gloom from the real estate world, we were surprised when there was nothing but positivity on that call.

We were reminded that, while it can get scary being locked in your house, it’s not the end of the world. It can feel good to surround yourself with high-level performers who are committed to keeping their businesses and staff in place.

Eric and I have been taking action 12-13 hours a day, 7 days a week because we believe in what we’re doing.

As a community, we have an opportunity to stay focused and take action to:

  • Build our businesses

  • Put our systems in place

  • Understand what’s happening

For hosts who can stay focused, the opportunities will be massive in the future, whether that’s in the next couple of months or the next year.

The most important advice I can give to hosts who love this industry: stay. It’s going to come back stronger than ever for both small and big hosts. 

short term rental coroanvirus updates

4. Keep Your Team

With all these big companies laying off so many of their employees, you might be considering doing the same.

Don’t.

If you have an incredible team right now, do your best to make enough money to stay in business. But, if you’re strapped for cash, keep your best team members at the very least.

Because once new opportunities come, you don’t want to be hiring and training new people. That’s going to take a lot of time and will prevent you from taking advantage of these opportunities.

5. Be Others-Aware and Forward-Thinking

While it can be understandable focusing on what you need with what’s going on right now, you should be others-aware and forward-thinking.

You want to think about what people are going to need once this crisis is over and prepare for that. This crisis is going to end eventually, and you want to be one of the hosts who are ready to hit the ground running.

Advice from Other Hosts

I’ve gotten a few new bookings and have noticed that most of these are longer bookings, i.e. 2-week and 1-month stays. These are people looking to stay in my properties to be near older family members. They want to be close enough to help if needed but don’t want to move in with them to minimize risk.

I’ve shared these observations with other hosts and compiled a list of some of the most common advice from us.

1. Advertise Longer Stays

From chatting with other high-performing hosts, I’ve realized that the new strategy is to advertise longer stays. We’re no longer hosting short-term leisure guests. As a result, many hosts are offering 14+ day stays at steep discounts, e.g. 40% off.

These attract a variety of people, from concerned adults wanting to take care of the elderly to medical professionals.

coronavirus survival kit

2. Try New Platforms

In line with the first piece of advice, you should look to be on platforms that are geared towards medium to long-term stays.

Examples include Facebook Marketplace, Furnished Finder, Craigslist, and Zillow.

3. Leverage Social Media

Increased time spent in isolation as a result of COVID-19 has sparked a huge increase in social media usage.

If you already have a social media following, it may be helpful to promote your rental unit on social media explaining what you’re offering and who it’s for.

For instance, if you’re looking to attract travel nurses, you can tailor a post towards them. Then, ask your network to share this information with any travel nurses they know.

4. Communicate with Current and Past Guests

Another viable strategy is asking current guests if they want to extend their stay. You can also reach out to former guests and ask if they want to book your place at a big discount.

5. Divide Large Homes

If you have a large home, you’re probably not getting a lot of bookings right now. That’s because there are few people wanting to travel in larger groups. The typical guest is a single individual who’s looking for a place to stay.

A larger home with 4-5 bedrooms can be easily split into 4-5 separate listings. You can rent out your property room-by-room. This has the added benefit of getting a boost from Airbnb’s search algorithm because they like new listings.

But, make it clear that there’s going to be other people in the house. You don’t want a guest thinking that he booked a place to himself when it’s actually a house with 4 other people.

For hosts going this route, I recommend targeting medical professionals. They’re most likely to be the least concerned with staying with other healthcare professionals. 

Scenario: Hosting Travel Nurses

Eric and I recently had someone message us about renting to travel nurses. They were advertising that they wanted to support travel nurses, but their neighbors were freaking out because they didn’t want people traveling to their neighborhoods.

A fear-based reaction, but a serious consideration nonetheless.

Be sure to think of your community and respond to their concerns.

short term rental coronavirus

If you’ve resolved those concerns and are looking to host travel nurses, you can tailor your listing to specifically target them. For instance, a lot of travel nurses have pets, so you should advertise that your property is pet-friendly. If this isn’t the case, I’d recommend being a bit more flexible during these times.

You can even contact travel nurse temp agencies and see if they’d be willing to rent your entire place. That way, you can have your entire place booked while only dealing with a single entity (and not 5 different people).

Resources

Here are some resources that may help you during these difficult times.

The Coronavirus Survival Kit

Eric and I have interviewed numerous experts from our communities to find out what’s been working for hosts. We’ve compiled this information into 40+ pages.

Resources include:

  • Cleaning checklists

  • Swipe email copy for contacting travel nurse temp agencies

  • CDC-recommended resources.


Get the STR Coronavirus Survival Kit

We created a resource with swipe files, lists, tips and actionable how-tos for getting your business through this crisis.

While we recognize there’s no perfect solution, we wanted to understand what hosts are doing to stay in business. That's why we spent countless hours interviewing as many hosts as possible.

This guide is designed for hosts of all sizes. It doesn’t matter if you have one listing or 500+ listings.

To keep it as affordable as possible, we’ve priced it at $7, so anyone can grab this actionable guide on making it through this crisis.


The Inner Circle

The Inner Circle is a private community of hosts who are meeting weekly and solving problems in real time. 


It’s essentially access to our networks and a bunch of other live training events.


Because we’ve realized that one of the most important parts of this is community, we want to give people the opportunity to plug into the right one. We want to provide a way for people to be part of a community that they can relate with. These are hosts who are putting these strategies into action and discussing what’s working and what’s not.


This used to be an exclusive group. We’re now offering this to the public because we’ve realized that one of the biggest values we can bring to the table is our connections in the industry. Past interviewees have included CEOs and the world’s top hosts, and we do this so you can have conversations with them.


Joining the Inner Circle gives you access to:

  • Weekly in-depth trainings
  • 2 live Q&A and hot-seat sessions a week
  • Coronavirus STR updates every single Friday
  • One-on-one interviews, presentations, and Q&A sessions with high-level experts once a month (our upcoming expert is AirDNA’s CEO)



Surviving This Crisis Together

These are difficult times, and we’re all hurting. But, this is also an opportunity for us to re-evaluate our business models and come out of the crisis better than ever. The time and resources you invest in your business now will have huge dividends in the future.


Get the STR Coronavirus Survival Kit

We created a resource with swipe files, lists, tips and actionable how-tos for getting your business through this crisis.

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