{"id":12472,"date":"2020-03-14T20:12:09","date_gmt":"2020-03-15T00:12:09","guid":{"rendered":"https:\/\/www.renthop.com\/content-manager\/?p=12472"},"modified":"2020-03-14T20:13:37","modified_gmt":"2020-03-15T00:13:37","slug":"airbnb-cancellation-policy-and-arbitrage-collapse","status":"publish","type":"post","link":"https:\/\/www.renthop.com\/blog\/airbnb-cancellation-policy-and-arbitrage-collapse\/","title":{"rendered":"AirBnb Cancellation Policy And Arbitrage Collapse?"},"content":{"rendered":"\r\n

Absolutely brutal… but it is the right thing to do. No guest should need to worry about traveling just to prevent a forfeiture of their deposits. No host should compel a guest to take health risks, or be forced to stay open against their will. Hats off to Airbnb putting safety over profits<\/a>. The updated AirBnb cancellation policy is the right move for consumers on both ends.\u00a0<\/p>\r\n\r\n

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But what next? There are a few obvious conclusions in the coming months.<\/p>\r\n\r\n\r\n\r\n

Sharing Economy Highly Leveraged<\/h2>\r\n\r\n\r\n\r\n

For years, professional hosts have cropped up, leasing apartments and condos everywhere and converting them into vacation rentals (sometimes legally, sometimes less so). It seemed like an arbitrage that couldn’t lose. Rent a nice apartment for $1500 a month. Airbnb it for $100 per night. If you can fill it even 70% of the nights, you come out way ahead, right?<\/p>\r\n\r\n\r\n\r\n

Economies of Scale Means Operational Leverage<\/h3>\r\n\r\n\r\n\r\n

Unfortunately, life isn’t so simple. Hosts quickly realize that running one unit on Airbnb doesn’t really amount to much of a side hustle – after dealing with key drops, furnishing, cleaning, and listings management, the margins are quite thin. The labor becomes much more intensive than the mythical 4-hour workweek.<\/p>\r\n\r\n

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Many Airbnb operations require a portfolio of many units – that way the cleaning costs, inventory management, maintenance, and guest support operations can all be lumped together and shared. Also, nightly rates are never constant day-to-day. There are high demands days and low demand days, not always easy to forecast. A manager who can track multiple listings is in a much better position to react and change prices and maximize utilization rates. Finally, since reviews matter, a manager with multiple units can quickly earn Superhost and favorable status within the system.<\/p>\r\n\r\n\r\n\r\n

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