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‘Airbnbust’? Why Canada’s short-term rental hosts are in for a harsh winter
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When Tamara Saeed and her husband were looking for a way to save for their children’s education a few years ago, the allure of Airbnb caught their eye.
The family bought a cottage near Grand Bend, Ont., in late 2019, with plans to host the property on the short-term rental platform. They almost second-guessed the move when the COVID-19 pandemic struck, but the waves of Canadians looking to escape the city during lockdowns proved a boon for the new cottage owners.
“It’s been great. I honestly enjoy hosting, it’s just a great way to help people explore an area they might not otherwise have access to. Not everyone can own a cottage,” Saeed tells Global News in an interview.
She recently doubled down and bought a second cottage property in Selkirk, Ont. and has also put it up on short-term rental sites including Airbnb and Vrbo.
But now, with bookings slowing down heading into the holidays, mortgage costs rising and a possible recession on the horizon, she’s wondering whether she might be forced to sell her rental properties.
“It was a great idea and I still think it is. But the fact is things have changed,” Saeed says.
She cites new taxes from municipalities and rising interest rates from the Bank of Canada as hurting the business case and earning potential for her cottage properties.
Inflation is also drawing down revenues amid higher costs for cleaners and maintenance crews who rely on the cottage industry.
“We are worried that with the cost of everything, it might not be as feasible to hang onto these properties. We’re hoping that’s not the case,” Saeed says.
Tamara Saeed’s family uses her cottage property when it’s not rented out on a hosting service like Airbnb.
Provided
But it’s not necessarily today’s circumstance that could settle her future in the short-term rental game.
While business always slows down after the busy summer months, Saeed says bookings have seen a greater slowdown so far this fall.
Mortgage costs for property owners relying on short-term rentals like Airbnb are soaring at a time when experts say travel demand is projected to slow ahead of a feared recession.
“It is a little scarier,” Saeed says.
“We’re just thinking of the future, really. If this trend continues, is this something that we just feasibly continue to do?”
‘Airbnbust’?
Saeed isn’t alone in fretting about headwinds for the short-term rental industry.
The term “Airbnbust” picked up steam online recently with Twitter and Facebook posts showing hosts complaining about declining occupancy rates.
Airbnb has reported strong revenue growth through much of the year as consumers have rushed back to travel following the lifting of COVID-19 restrictions.
But the San Francisco-based company’s share price took a hit last week — despite posting record profits — as it fell short of analyst expectations and said it expected booking growth to moderate over the holidays amid high global inflation.
Competitors Expedia, which owns short-term rental platform Vrbo, and Bookings.com both said in their filings last week that near-term “uncertainty” meant they couldn’t accurately forecast how many bookings they’d see over the fall.
Kiefer Van Mulligen, an economist with the Conference Board of Canada, tells Global News that “demand for travel will be reduced” in the months ahead as high inflation and interest rates eat at consumer spending power and fears about job losses on the horizon push households to save rather than splurge.
“That matters for the tourism industry recovery. If people aren’t spending as much money, then it’ll be a more gradual path back to kind of pre-pandemic levels,” he says.
Short-term rental hosts in some cities across Canada are already reporting fewer bookings in their calendars compared to this time last year, according to one analysis.
Data provided to Global News from AirDNA, a third-party company that tracks listings and occupancy of Airbnb and Vrbo units worldwide, shows that more hosts are joining the market in Canada to compete for travellers’ dollars even as demand is set to fall.
AirDNA defines an Airbnb or Vrbo listing as “available” if it has at least one day booked or available through the month, while occupancy is determined by the number of nights booked on a platform compared to all nights available.
The number of available listings on the two platforms has risen year-over-year across the country and in six major markets tracked by AirDNA, but Vancouver and Toronto were the only ones included in the analysis that saw their occupancy rates increase over the same time.
Canada saw an overall 34 per cent bump in listings from September of this year compared to last, while the average occupancy rate dropped to 60.4 per cent, down 2.3 percentage points.
Edmonton, meanwhile, saw a 57 per cent jump in listings year-over-year, but recorded a five-percentage-point drop in occupancy over the same time.
AirDNA economist Bram Gallagher told Global News in an email that while the growth in short-term rental supply is still expected to outpace demand, the number of new units coming to the platform should also slow as rising interest rates discourage new investors from entering the market.
He also said that while today’s occupancy figures are falling off of 2021’s highs, those levels were “never sustainable.”
Rather than a bust, Gallagher said he sees the industry establishing a new “benchmark” after years of atypical trends in the pandemic.
For its part, Airbnb claims data about the platform’s bookings and occupancy can’t be reliably calculated by third parties.
The company also said in its earnings last week that overall demand from guests was rising last quarter, especially in cities.
“In one city alone – Toronto – we’ve seen a 60 per cent year-over-year growth in bookings over the last 12-months as of October 1, 2022,” the company said in a statement to Global News.
Airbnb is also rolling out new features early next year that will give hosts more insight into the fees guests pay and more options to discount and set competitive prices.
New hosts are joining the platform today, Airbnb argues, as a way to earn extra cash and offset high inflation. A survey from Airbnb itself claimed that 44 per cent of Canadian hosts said the money they’ve earned through the platform has helped them stay in their homes as costs rise.
But homeowners who bought properties in order to rent them out on platforms like Airbnb could also be more at risk in today’s rising rate environment.
New and existing mortgage holders alike are set to feel the pain of rising interest rates, either when they purchase or renew their loans, but homeowners who take out a mortgage on a rental property are often more vulnerable to rate hikes, according to Shubha Dasgupta, CEO of Toronto-based brokerage Pineapple.
While standard residences can see an owner put down amounts like five or 10 per cent to buy a property, rental purchases must have a 20 per cent down payment on hand, raising upfront costs, Dasgupta notes.
Mortgages on rentals also tend to have higher interest rates, as lenders view these properties and the need to find tenants for cash flow as inherently more risky, he says.
This can push many landlords and short-term rental hosts to the alternative mortgage market to get qualified with more flexible loan conditions and shorter terms, Dasgupta says.
The result? Owners who rushed out to buy when interest rates were low over the pandemic are now finding themselves with much higher monthly costs on their properties.
“Clients that took like a one-year term, as an example, last year at lower interest rates, are going to be much more susceptible to higher interest rates today,” Dasgupta says.
Those with variable mortgages are also immediately paying more as the Bank of Canada raises interest rates. The central bank has increased its policy rate 3.5 percentage points so far this year and has signalled it’s not done yet.
Saeed says she has fixed rates on her home in Brantford, Ont. and her property near Grand Bend, but her Selkirk cottage is on a variable rate and she says payments have increased “exponentially” this year.
While she’s actively looking for solutions that can keep her long-term savings goals for her kids on track — a more traditional Registered Education Savings Plan is one she’s floated — she says she’s not feeling “oh, poor me” about her situation.
“There are many people who unfortunately have it a lot worse than we are, but we do feel the pinch. We’re not multimillionaire corporations. We’re just your average mom and pop just trying to get a little ahead and leave something for their kids,” she says.
There are a few options out there for short-term rental hosts like Saeed who want to hold on to their properties through the economic uncertainty.
Dasgupta says demand for long-term rentals is high right now in most Canadian housing markets, and extra units would be “welcomed” back into the stock.
He also says there’s a hybrid model that he’s seeing growing in popularity, dubbed “Airbnb arbitrage,” wherein an owner takes out a long-term tenant who continues to run the short-term rental on their own but takes on the burden of finding guests and running the day-to-day operations.
Alternatively, Dasgupta recommends reaching out to your mortgage agent or broker if you need a bit of flexibility on your payments. If you set up a plan pre-emptively, you can often extend the amortization period of the loan or set up a schedule to return to regular payments when your cash flow is back on track, he says.
For those hosts who are able to stretch their dollars and make it to the other side of the economic downturn, Gallagher said he expects short-term rental business will return when consumers feel they can take their vacations again.
“Yes, in a recession, people pull back on travel, but it’s short-lived, and they want to take their vacations: they won’t skip multiple vacations unless we’re in a deep recession and seeing long-term unemployment, which is not what most economists expect today,” he said.
Keffiyehs remain banned in the Ontario Legislature after a unanimous consent motion that would have allowed the scarf to be worn failed to pass at Queen’s Park Thursday.
That vote, brought forth by NDP Leader Marit Stiles, failed despite Premier Doug Ford and the leaders of the province’s opposition parties all stating they want to see the ban overturned. Complete agreement from all MPPs is required for a motion like this to pass, and there were a smattering of “nos” after it was read into the record.
In an email on Wednesday, Speaker Ted Arnott said the legislature has previously restricted the wearing of clothing that is intended to make an “overt political statement” because it upholds a “standard practice of decorum.”
“The Speaker cannot be aware of the meaning of every symbol or pattern but when items are drawn to my attention, there is a responsibility to respond. After extensive research, I concluded that the wearing of keffiyehs at the present time in our Assembly is intended to be a political statement. So, as Speaker, I cannot authorize the wearing of keffiyehs based on our longstanding conventions,” Arnott said in an email.
Speaking at Queen’s Park Thursday, Arnott said he would reconsider the ban with unanimous consent from MPPs.
“If the house believes that the wearing of the keffiyeh in this house, at the present time, is not a political statement, I would certainly and unequivocally accept the express will of the house with no ifs, ands or buts,” he said.
Keffiyehs are a commonly worn scarf among Arabs, but hold special significance to Palestinian people. They have been a frequent sight among pro-Palestinian protesters calling for an end to the violence in Gaza as the Israel-Hamas war continues.
Premier calls for reversal
Ford said Thursday he’s hopeful Arnott will reverse the ban, but he didn’t say if he would instruct his caucus to support the NDP’s motion.
In a statement issued Wednesday, Ford said the decision was made by the speaker and nobody else.
“I do not support his decision as it needlessly divides the people of our province. I call on the speaker to reverse his decision immediately,” Ford said.
Ontario Premier Doug Ford reiterated Thursday that he does not support Speaker Ted Arnott banning keffiyehs in the Ontario Legislature because they are “intended to be a political statement,” as Arnott said in an email Wednesday.
PC Party MPP Robin Martin, who represents Eglinton–Lawrence, voted against the unanimous consent motion Thursday and told reporters she believes the speaker’s initial ruling was the correct one.
“We have to follow the rules of the legislature, otherwise we politicize the entire debate inside the legislature, and that’s not what it’s about. What it’s about is we come there and use our words to persuade, not items of clothing.”
When asked if she had defied a directive from the premier, Martin said, “It has nothing to do with the premier, it’s a decision of the speaker of the legislative assembly.”
Stiles told reporters Thursday she’s happy Ford is on her side on this issue, but added she is disappointed the motion didn’t pass.
“The premier needs to talk to his people and make sure they do the right thing,” she said.
Stiles first urged Arnott to reconsider the ban in an April 12 letter. She said concerns over the directive first surfaced after being flagged by members of her staff, however they have gained prominence after Sarah Jama, Independent MPP for Hamilton Centre, posted about the issue on X, formerly Twitter.
Jama was removed from the NDP caucus for her social media comments on the Israel-Hamas war shortly after Oct. 7.
Jama has said she believes she was kicked out of the party because she called for a ceasefire in Gaza “too early” and because she called Israel an “apartheid state.”
Arnott told reporters Thursday that he began examining a ban on the Keffiyeh after one MPP made a complaint about another MPP, who he believes was Jama, who was wearing one.
Liberals also call for reversal
Ontario Liberal Leader Bonnie Crombie also called for a reversal of the ban on Wednesday night.
“Here in Ontario, we are home to a diverse group of people from so many backgrounds. This is a time when leaders should be looking for ways to bring people together, not to further divide us. I urge Speaker Arnott to immediately reconsider this move to ban the keffiyeh,” Crombie said.
Keffiyehs are a common garment across the Arab world, but they hold a special meaning in the Palestinian resistance movement.
Stiles said MPPs have worn kilts, kirpans, vyshyvankas and chubas in the legislature, saying such items of clothing not only have national and cultural associations, but have also been considered at times as “political symbols in need of suppression.”
She said Indigenous and non-Indigenous members have also dressed in traditional regalia and these items cannot be separated from their historical and political significance.
“The wearing of these important cultural and national clothing items in our Assembly is something we should be proud of. It is part of the story of who we are as a province,” she said.
“Palestinians are part of that story, and the keffiyeh is a traditional clothing item that is significant not only to them but to many members of Arab and Muslim communities. That includes members of my staff who have been asked to remove their keffiyehs in order to come to work. This is unacceptable.”
Stiles added that House of Commons and other provincial legislatures allow the wearing of keffiyehs in their chambers and the ban makes Ontario an “outlier.”
Suppression of cultural symbols part of genocide: MPP
Jama said on X that the ban is “unsurprising” but “nonetheless concerning” in a country that has a legacy of colonialism. “Part of committing genocide is the forceful suppression of cultural identity and cultural symbols,” she said in part.
“Seeing those in power in this country at all levels of government, from federal all the way down to school boards, aid Israel’s colonial regime with these tactics in the oppression of Palestinian people proves that reconciliation is nothing but a word when spoken by state powers,” she said.
Amira Elghawaby, Canada’s Special Representative on Combatting Islamophobia, said on X that it is “deeply ironic” on that keffiyehs were banned in the Ontario legislature on the 42nd anniversary of Canada’s Charter of Rights and Freedoms.
“This is wrong and dangerous as we have already seen violence and exclusion impact Canadians, including Muslims of Palestinian descent, who choose to wear this traditional Palestinian clothing,” Elghawaby said.
Arnott said the keffiyeh was not considered a “form of protest” in the legislature prior to statements and debates that happened in the House last fall.
“These items are not absolutes and are not judged in a vacuum,” he said.
Peggys Cove now has a new bylaw to guide development and protect the iconic fishing village’s heritage, but some say the process to create those rules was unfair.
After more than two years of consultation and five different drafts, this week the province approved a new land-use bylaw that will replace one from 2003.
It aims to preserve the “authentic, traditional fishing village” spirit of the cove, while allowing commercial uses where residents can benefit financially from the thousands of tourists who flock to see the area and lighthouse.
But Paul Paruch is one of many who have voiced concerns about conflicts of interest with the Peggy’s Cove Commission, which led the process with support from Upland Planning consultants.
“[I’m] very disappointed, let down,” Paruch said Thursday.
Paruch and his wife, Claire, had hoped to see their property zoned commercial, as Claire has run a hotdog stand there for years. The couple bought a home there with plans to retire and also rent it out, Paruch said, which would also not be allowed.
The new bylaw addresses everything from dwelling size to regulations on building materials. It also has turned many residential lots along Peggys Point Road into mixed-use “core” zoning that would allow for commercial, residential and community purposes.
Vendors and buskers are no longer allowed in the cove, unless they’re accessory to a special event.
Brian Cottam said the new bylaw is a major blow for him and his wife, Kelly Westhaver. Although an early draft of the bylaw zoned their land at 173 Peggys Point Road as commercial, that changed to residential after other residents voiced concerns about having that zoning so close to the lighthouse.
A sale of $1.3 million fell through on the land because a core designation was a condition of the purchase, Cottam said.
“This sale was going to allow us the ability to relax a little and enjoy life, but that has been stripped away,” he said in an email.
Bylaw ‘effectively expropriates’ private land: lawyer
Another property owner, Eleanor McCain, will be getting the commercial zoning she pushed for to allow for new businesses.
However, a lawyer for McCain did raise concerns about how the conservation zone was applied to the rocky waterfront side of her client’s land and many others in the cove. Nancy Rubin of Stewart McKelvey said in a letter to the commission the move “effectively expropriates” private land without any evidence of why it was needed or if it was based on any scientific studies.
Paruch, Cottam and McCain have argued the commission members who run their own commercial enterprises, or are connected to businesses in the cove, are in direct conflicts of interest. The commission is made up of residents, the sitting councillor and representatives from the province to make decisions on changes in the area.
Three commission members must be from the community, but where there’s about 40 permanent residents, it is hard to avoid friendships and family ties.
The Nova Scotia ombudsman’s office is investigating the commission following recent complaints. Both Paruch and Cottam said they had hoped this independent report would lead to the province rejecting the proposed bylaw.
But John Campbell, a lifelong cove resident and owner of the Sou’wester Restaurant in the village and other properties, said the bylaw strikes the right balance.
“I think overall it’s going to be a good thing, but you know when you go through a process like this, not everybody’s going to be happy,” Campbell said.
Campbell said he’s become an “easy target” for the arguments around conflicts of interest, as his daughter Nicole Campbell is commission chair. He said he didn’t get everything he wanted in the new bylaw, pointing out that his request for land to be zoned commercial near the lighthouse was refused.
Campbell agreed that something should change with the makeup of the commission to avoid conflicts in the future, but more analysis should be done on what the fairest approach is.
“It’s a very unique place, Peggys Cove, and you know it’s good to have discussions about it,” Campbell said. “It’s my community that I grew up in, and my closest friends are in, and you know I feel like I could make a living there.”
Economic Development Minister Susan Corkum-Greek said she has faith in the commission’s process, and nothing in the draft report from the ombudsman prevents her from approving the bylaw.
She said the province is also looking at modernizing the legislation governing the commission and the area.
“I think this is an important step, but … it is a first step,” Corkum-Greek told reporters Thursday.
The bylaw will see a new development officer appointed to handle permits and variance requests, while anyone who wants to change their zoning can apply to the commission.
News
Ontario Legislature keffiyeh ban remains, though Ford and opposition leaders ask for reversal – CBC.ca
Keffiyehs remain banned in the Ontario Legislature after a unanimous consent motion that would have allowed the scarf to be worn failed to pass at Queen’s Park Thursday.
That vote, brought forth by NDP Leader Marit Stiles, failed despite Premier Doug Ford and the leaders of the province’s opposition parties all stating they want to see the ban overturned. Complete agreement from all MPPs is required for a motion like this to pass, and there were a smattering of “nos” after it was read into the record.
In an email on Wednesday, Speaker Ted Arnott said the legislature has previously restricted the wearing of clothing that is intended to make an “overt political statement” because it upholds a “standard practice of decorum.”
“The Speaker cannot be aware of the meaning of every symbol or pattern but when items are drawn to my attention, there is a responsibility to respond. After extensive research, I concluded that the wearing of keffiyehs at the present time in our Assembly is intended to be a political statement. So, as Speaker, I cannot authorize the wearing of keffiyehs based on our longstanding conventions,” Arnott said in an email.
Speaking at Queen’s Park Thursday, Arnott said he would reconsider the ban with unanimous consent from MPPs.
“If the house believes that the wearing of the keffiyeh in this house, at the present time, is not a political statement, I would certainly and unequivocally accept the express will of the house with no ifs, ands or buts,” he said.
Keffiyehs are a commonly worn scarf among Arabs, but hold special significance to Palestinian people. They have been a frequent sight among pro-Palestinian protesters calling for an end to the violence in Gaza as the Israel-Hamas� war continues.
Premier calls for reversal
Ford said Thursday he’s hopeful Arnott will reverse the ban, but he didn’t say if he would instruct his caucus to support the NDP’s motion.
In a statement issued Wednesday, Ford said the decision was made by the speaker and nobody else.
“I do not support his decision as it needlessly divides the people of our province. I call on the speaker to reverse his decision immediately,” Ford said.
Ontario Premier Doug Ford reiterated Thursday that he does not support Speaker Ted Arnott banning keffiyehs in the Ontario Legislature because they are “intended to be a political statement,” as Arnott said in an email Wednesday.
PC Party MPP Robin Martin, who represents Eglinton–Lawrence, voted against the unanimous consent motion Thursday and told reporters she believes the speaker’s initial ruling was the correct one.
“We have to follow the rules of the legislature, otherwise we politicize the entire debate inside the legislature, and that’s not what it’s about. What it’s about is we come there and use our words to persuade, not items of clothing.”
When asked if she had defied a directive from the premier, Martin said, “It has nothing to do with the premier, it’s a decision of the speaker of the legislative assembly.”
Stiles told reporters Thursday she’s happy Ford is on her side on this issue, but added she is disappointed the motion didn’t pass.
“The premier needs to talk to his people and make sure they do the right thing,” she said.
Stiles first urged Arnott to reconsider the ban in an April 12 letter. She said concerns over the directive first surfaced after being flagged by members of her staff, however they have gained prominence after Sarah Jama, Independent MPP for Hamilton Centre, posted about the issue on X, formerly Twitter.
Jama was removed from the NDP caucus for her social media comments on the Israel-Hamas war shortly after Oct. 7.
Jama has said she believes she was kicked out of the party because she called for a ceasefire in Gaza “too early” and because she called Israel an “apartheid state.”
Arnott told reporters Thursday that he began examining a ban on the Keffiyeh after one MPP made a complaint about another MPP, who he believes was Jama, who was wearing one.
Liberals also call for reversal
Ontario Liberal Leader Bonnie Crombie also called for a reversal of the ban on Wednesday night.
“Here in Ontario, we are home to a diverse group of people from so many backgrounds. This is a time when leaders should be looking for ways to bring people together, not to further divide us. I urge Speaker Arnott to immediately reconsider this move to ban the keffiyeh,” Crombie said.
Keffiyehs are a common garment across the Arab world, but they hold a special meaning in the Palestinian resistance movement.
Stiles said MPPs have worn kilts, kirpans, vyshyvankas and chubas in the legislature, saying such items of clothing not only have national and cultural associations, but have also been considered at times as “political symbols in need of suppression.”
She said Indigenous and non-Indigenous members have also dressed in traditional regalia and these items cannot be separated from their historical and political significance.
“The wearing of these important cultural and national clothing items in our Assembly is something we should be proud of. It is part of the story of who we are as a province,” she said.
“Palestinians are part of that story, and the keffiyeh is a traditional clothing item that is significant not only to them but to many members of Arab and Muslim communities. That includes members of my staff who have been asked to remove their keffiyehs in order to come to work. This is unacceptable.”
Stiles added that House of Commons and other provincial legislatures allow the wearing of keffiyehs in their chambers and the ban makes Ontario an “outlier.”
Suppression of cultural symbols part of genocide: MPP
Jama said on X that the ban is “unsurprising” but “nonetheless concerning” in a country that has a legacy of colonialism. “Part of committing genocide is the forceful suppression of cultural identity and cultural symbols,” she said in part.
“Seeing those in power in this country at all levels of government, from federal all the way down to school boards, aid Israel’s colonial regime with these tactics in the oppression of Palestinian people proves that reconciliation is nothing but a word when spoken by state powers,” she said.
Amira Elghawaby, Canada’s Special Representative on Combatting Islamophobia, said on X that it is “deeply ironic” on that keffiyehs were banned in the Ontario legislature on the 42nd anniversary of Canada’s Charter of Rights and Freedoms.
“This is wrong and dangerous as we have already seen violence and exclusion impact Canadians, including Muslims of Palestinian descent, who choose to wear this traditional Palestinian clothing,” Elghawaby said.
Arnott said the keffiyeh was not considered a “form of protest” in the legislature prior to statements and debates that happened in the House last fall.
“These items are not absolutes and are not judged in a vacuum,” he said.
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