Business

Airbnb almost as expensive as a hotel, figures show

Published

2 years ago

August 16, 2022

Staying in an Airbnb rental may be only marginally less expensive than sojourning in a hotel, at least for small parties booking short-term stays, an analysis of short-term rental and hotel prices in Toronto shows. It may be part of the reason why guests are increasingly angered by the litany of fees included in their bookings.

In Canada’s most populous city, the average daily rate for a studio or one-bedroom apartment on the Airbnb platform in July was $214, according to AirDNA, a short-term rental data provider. That was $33 a day less than the $247 Toronto hotels charged on average during roughly the same period, according to data spanning July 1 to July 30 from STR, an analytics company focused on the hospitality industry.

The average rate for studio and one-bedroom rentals, which AirDNA considers comparable with hotel rooms, was up 44 per cent from $148 a day in July, 2019, during the summer before the onset of the COVID-19 pandemic. By contrast, the average daily rate paid by travellers staying in Toronto hotels rose by 24 per cent over the same four summers, up from an average of $199 in July, 2019, according to STR.

For Airbnb listings that include larger properties – but not shared accommodations – the average daily rate in July was nearly $300 a day, more than 50 per cent above average rates in July, 2019, the AirDNA numbers show. The data for short-term rentals does not include service fees, which can vary but often amount to an additional 10 per cent to 15 per cent, the company said.

Airbnb ABNB-Q has challenged some of the data, saying third-party analyses of its listings typically incur a number of issues, including possibly not accurately reflecting actual bookings or what guests paid.

The short-term rentals giant said the average daily rate for Airbnb accommodations in Toronto increased approximately 15 per cent between 2019 and the first six months of 2022. It did not provide dollar amounts for average daily rates.

Hotel-like prices may help to explain some travellers’ growing angst over the many fees guests must pay in addition to the base rate advertised on the platform.

“I don’t stay in Airbnb’s anymore,” U.S.-based Twitter user Michael Karnjanaprakorn recently wrote.

“Cleaning Fee: $200. Instructions: Clean the dishes, take out the trash, and wash all the sheets before you leave,” the tweet, which received more than 27,000 likes, reads.

In a press release last year, Airbnb addressed criticism over fees noting that users can see a detailed breakdown of potential charges prior to committing to a booking.

Cleaning fees are set by hosts based on factors such as the size of the home, location, amenities and the number of guests. “We believe that hosts having autonomy over their own pricing helps empower them to achieve success on our platform,” the company wrote.

Enhanced cleaning protocols because of COVID-19 might have also increased cleaning expenses for some hosts, the company noted.

Other fees include a service charge – usually under 14.2 per cent of the booking subtotal – collected by Airbnb, and occupancy taxes imposed by the government, the company said. (In Toronto, for example, Airbnb has been collecting a 4-per-cent municipal tax since the start of 2021.)

But Airbnb’s PR response has hardly appeased disgruntled guests. Travel expert Matthew Kepnes, for example, said he has forsaken Airbnb for good.

Mr. Kepnes, who runs the website nomadicmatt.com, argued Airbnb rentals are no longer a good deal for short-term stays, especially in large cities, where there are plenty of hotel options.

“If you’re just going to New York for three days, it doesn’t really make sense,” he said.

In part, that’s because fees can significantly add to the cost of a brief stay, according to Mr. Kepnes. In a tweet from February, 2020, he referenced an Airbnb listing with a $100-a-night base rate and a $200 cleaning fee. “These cleaning fees are so onerous. I might as well just stay in a hotel for that price!” he wrote.

Mr. Kepnes also has qualms with Airbnb’s customer service, which he said makes it hard to obtain refunds. That’s another point in favour of hotels, he argued.

Aside from costs, he also has ethical reservations about using short-term rentals in large metropolitan areas. In many big cities, services such as Airbnb are taking much-needed housing stock away from prospective homeowners and long-term renters, he said.

Still, Airbnb may be a good choice in more remote areas, especially when booking longer stays, he said.

A growing number of travellers may be coming to Mr. Kepnes’ conclusion about shorter versus longer bookings. Since the start of the pandemic, Airbnb has seen a surge of longer bookings. Stays of 28 days or more were up 25 per cent in the second quarter of 2022 compared with the same period in 2021, and nearly 90 per cent above levels recorded in the second quarter of 2019, the company said during its latest earnings release.

Bookings of around a month or more have become its fastest-growing trip type by length, Airbnb said.

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Business

Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

Published

3 days ago

September 13, 2024

Anne Joseph

TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

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Business

Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

Published

4 days ago

September 12, 2024

Anne Joseph

VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

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Business

Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

Published

4 days ago

September 12, 2024

Anne Joseph

MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

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