While much of the hospitality industry has been reeling from the effects of the pandemic, there is one small segment that is quickly rebounding.
Danessa Itaya is the president of Property Management Inc., a property management and real estate services company that has more than 200 franchises. Some of the industries in which PMI operates are associations, residential and commercial real estate, and vacation rental properties. PMI has a franchise location in the Grand Rapids area.
According to Itaya, the occupancy rate for short-term rentals such as Airbnb was up 82% in the Grand Rapids area for the month of July. With the increase in demand, prices also have increased. Itaya said in April the average daily rate for short-term rentals was $106. Now, for the bookings reserved for August, the average daily rate is up to $134.
Itaya said PMI has observed that nationally short-term rentals are being reserved in close proximity to the guest’s residence.
“People are back to traveling and they are traveling to small cities,” she said. “They are not traveling to Orlando or Chicago. They are going to Grand Rapids and some of these smaller towns to rediscover things. If you look at national parks, it is an all-time high for visitors. In many instances they are closing the parks down because they are at max capacity already and they haven’t seen that kind of activity in years. People are rediscovering the outdoors. Technology took them inside. They were playing their video games and playing on their phone and now people want to go outside and go to the lakes and do all the fun things that people like to do in Michigan.”
According to the Airbnb website, on July 8, guests booked more than 1 million nights’ worth of future stays at Airbnb listings around the world. “It was the first day in more than four months, since March 3, that the 1 million nights threshold was reached,” Itaya said.
The site also stated that two-thirds of the July 8 bookings were for outside of cities and approximately half of the nights now booked are for travel destinations within 300 miles of guests’ homes.
Itaya said on average people would rent an Airbnb for a week or a weekend, but with some schools delaying openings or completely moving classes online, she said she is noticing that families are renting entire homes for a longer period of time.
“We are seeing 30-day rentals, people are just coming for a whole month,” she said. “They are bringing their entire family. Once there is internet access they can work from anywhere and the kids can go to school from anywhere.”
In 2019, Airbnb’s host and guest community generated $117 billion in estimated direct economic impact across 30 countries, a 16% increase over the $100 billion that was generated in 30 markets in 2018. Airbnb had $33.8 billion in direct economic impact, which was based on host income and estimated guest spending during the trip, according to the vacation rental site.
According to the company, Michigan hosts earned a combined $78 million in supplemental income while welcoming approximately 600,000 guests to the state in 2018. There were more than 7,600 Michigan hosts who shared their homes via Airbnb and they earned about $6,300 annually in supplemental income that year, the company said.