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‘Airbnbust’? Why Canada’s short-term rental hosts are in for a harsh winter

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2 years ago

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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.

Sitting around a campfire

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.

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Mitchell throws two TD passes as Ticats earn important 37-21 home win over Redblacks

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September 14, 2024

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HAMILTON – It remains faint but Bo Levi Mitchell and the Hamilton Tiger-Cats still have a playoff pulse.

Mitchell threw two touchdown passes as Hamilton defeated the Ottawa Redblacks 37-21 in the CFL’s annual Hall of Fame game Saturday afternoon. The Ticats (4-9) earned a second straight win to move to within six points of the third-place Toronto Argonauts (7-6) in the East Division.

Hamilton visits Toronto on Friday night.

“Obviously they’re (wins) huge now,” Mitchell said. “We didn’t do ourselves any favours by getting into this position and not being able to really control our own destiny.

“But right now, we need certain people to win at certain times. Our job is to go out there and try to win the next five, then the next three after that.”

Mitchell finished 20-of-27 passing for 299 yards and an interception. He entered weekend action leading the CFL in passing yards (3,383) and TD strikes (21).

Greg Bell’s 15-yard TD run at 11:30 of the fourth and two-point convert put Hamilton up 36-21 after backup Jeremiah Masoli led Ottawa on two scoring drives. Following a 13-yard TD strike to Andre Miller at 2:53, Masoli found Dominique Rhymes on a 10-yard touchdown pass at 7:43 before Khalan Laborn’s two-point convert cut Hamilton’s lead to 29-21.

“When you’re scoring from (15) yards out on a run play, that makes offence easy,” Mitchell said. “It’s one of those things when you get down there as a quarterback, it takes you sometimes five, eight, 10 plays and now it’s ‘OK, now we have to create some stuff and find something.’

“When you hand the ball off and you’re scoring from (15) yards, it makes the offence really easy.”

Ottawa (8-4-1) would have clinched a playoff spot with a victory.

Ottawa committed six turnovers (three interceptions, two fumbles, once on downs) before an announced Tim Hortons Field gathering of 22,119. Lawrence Woods III also returned a punt 83 yards for a touchdown at 11:51 of the first quarter that put Hamilton ahead 10-3.

“You’ve got to bring your best every single week and this wasn’t our best, all of us, from coaches to the players,” said Ottawa head coach Bob Dyce. “If you don’t play great for four quarters, I don’t care who you’re playing you’re not going to have a successful day.

“We should’ve made the tackle (on Woods), we had him wrapped up it’s that simple. Even though we didn’t make the play on that, there should’ve been extra bodies there to clean it up when he did break the tackle.”

Hamilton also tied the season series with Ottawa 1-1. The teams meet again at TD Place on Oct. 25.

“If we didn’t turn it over today I would’ve said we played really well offensively and that to me is what the biggest difference is,” said Hamilton head coach Scott Milanovich. “Even the turnovers today (interception, fumble), at least they were in their end and we weren’t giving them a short field.

“The biggest play of the game was Woodsie’s return. It got us jump-started, gave us the lead and we were kind of off after that.”

Ottawa starter Dru Brown was 17-of-27 passing for 164 yards and an interception. Masoli entered late in the third and finished 13-of-19 passing for 183 yards with two TDs and two interceptions, but Dyce said Brown will start next weekend against Montreal (10-2-1), which earned a 19-19 tie Saturday night with Calgary (4-8-1).

The Canadian Football Hall of Fame’s ’24 class of S.J. Green, Chad Owens, Weston Dressler, Vince Goldsmith and Vince Coleman, along with builders Ray Jauch and Ed Laverty (posthumously), was honoured at halftime. All were enshrined Friday night.

Steven Dunbar Jr. and Ante Litre had Hamilton’s other touchdowns. Marc Liegghio kicked two field goals, three converts and two singles.

Ottawa’s Lewis Ward booted two field goals and a convert.

Mitchell culminated a five-play, 96-yard march with a 20-yard TD pass to Litre at 13:34 of the third. It followed Jonathan Moxey’s interception.

Liegghio’s single at 7:05 of the third put Hamilton up 22-6.

Mitchell’s 54-yard TD strike to Dunbar at 14:18 of the second staked Hamilton to its 21-6 halftime lead. The advantage was well-deserved as the Ticats had more first downs (12-six), net offensive yards (260-144) and scored on both offence and special teams.

Mitchell was 14-of-20 passing for 210 yards and a TD, but his interception cost Hamilton at least a field-goal attempt. Dunbar had five receptions for 113 yards and the touchdown.

Brown completed 13-of-21 passes for 127 yards.

Liegghio’s missed 47-yard attempt went for the single at 12:45 to put Hamilton ahead 14-6. It followed a Kiondre Smith catch that was ruled incomplete and at the very least cost the Ticats a first down that would’ve kept the drive alive.

Ward’s 30-yard kick at 9:15 had pulled Ottawa to within 13-6.

Liegghio’s 19-yard field goal at 5:13 pushed Hamilton’s lead to 13-3. It followed the defence stopping Ottawa’s Dustin Crum on third-and-one, giving the Ticats possession at the Redblacks 40.

Liegghio’s 47-yard field goal opened the scoring at 2:42 before Ward tied in with a 24-yard boot at 8:44.

UP NEXT

Redblacks: Host the Montreal Alouettes (10-2-1) next Saturday, Sept. 21.

Tiger-Cats: Visit the Toronto Argonauts (7-6) on Friday.

This report by The Canadian Press was first published Sept. 14, 2024.



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Toronto FC downs Austin FC to pick up three much-needed points in MLS playoff push

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September 14, 2024

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TORONTO – Needing three points to keep their playoff push alive, Toronto FC’s Jonathan Osorio and Deandre Kerr stepped up with first-half goals against Austin FC on Saturday with goalkeeper Sean Johnson doing his bit at the other end.

A 76th-minute goal by Austin’s Owen Wolff made for a nervy ending but TFC hung on for a 2-1 win.

While Toronto (11-15-3) remains on the Major League Soccer playoff bubble in eighth place in the Eastern Conference (the eighth- and ninth-place teams in each conference square off in a wild-card playoff with the winner facing the top seed in the conference), other results went their way.

Seventh-place Charlotte, 10th-place Atlanta and 11th-place Philadelphia all lost while ninth-place D.C. United tied.

Toronto midfielder Alonso Coello called it “a game we had to win.”

“It’s a big win … To see that fight tonight was important,” added coach John Herdman.

Austin (9-12-7) came into the game in 11th place in the West, two points below ninth-place Minnesota. The Texas side has won just one of its last six league games (1-4-1).

Austin outshot Toronto 7-6 (6-2 edge in shots on target) in the first half but found itself trailing 2-0 at the break as Toronto took advantage of its chances and the visitors didn’t in their first-ever visit to BMO Field, before an announced crowd of 25,538.

Toronto had a dream start, catching Austin on the counterattack in the seventh minute. A sliding Austin player dispossessed an onrushing Kerr, who had been set free by a long ball from Coello, but the ball bounced to Osorio, who beat goalkeeper Brad Stuver with a rising shot.

It was the Toronto captain’s second goal of the season in league play and his 65th for TFC in all competitions. Only Sebastian Giovinco (83) and Jozy Altidore (79) scored more in Toronto colours.

TFC went ahead on another counterattack in the 30th minute after an Austin giveaway. Osorio found Richie Laryea outpacing his marker and the wingback unselfishly sent a perfect low cross across goal for Kerr to knock home for his third of the season.

Wolff, the son of Austin head coach Josh Wolff, made it interesting with his late strike. The 19-year-old U.S. youth international, controlling a long ball, beat defender Raoul Petretta and then waited out Johnson before slotting it home for his first of the season.

Toronto survived a nervy six minutes of stoppage time as Austin pressed for the equalizer. Austin outshot Toronto 14-9 (8-3 in shots on target) and had 52.5 per cent possession.

The win evened Toronto’s home record at 7-7-0, while Austin slipped to 3-8-3 on the road.

It was a costly evening for Austin with defender Brendan Hines-Ike, midfielder Jhojan Valencia and star attacker Sebastian Driussi allpicking up cautions to miss Wednesday’s game with Los Angeles FC due to yellow-card accumulation.

Toronto defender Shane O’Neill will miss Wednesday’s game against visiting Columbus for the same reason. Toronto could be short mid-week, too. The hope is veteran centre back Kevin Long, who missed Saturday’s game after tweaking his hamstring in training, will be good to go.

Toronto has five games remaining, including three more at home as it looks to return to the post-season for the first time since 2020 when it lost to Nashville after extra time at the first hurdle.

It is a challenging road.

TFC hosts Columbus, the New York Red Bulls and Inter Miami while playing away at the Colorado Rapids and Chicago Fire. All but Chicago are in playoff positions.

The only previous meeting between Toronto and Austin was in May 2023, when Zardes scored a 91st-minute winner to give Austin a 1-0 win over visiting Toronto, which was then mired at the bottom of the Eastern Conference. That loss prompted a post-game outburst from Italian star Federico Bernardeschi about TFC’s drab play.

Then-coach Bob Bradley benched Bernardeschi for the next game.

Current coach John Herdman made four changes to his starting 11 with Bernardeschi and Osorio returning from suspension and Coello and Kerr also slotting in. Coello, who had missed the last eight league games with a hamstring injury, was impressive in his 59-minute return.

Both Toronto and Austin suffered home losses last time out going into the international break. Toronto was beaten 3-1 by D.C. United while Austin lost 1-0 to Vancouver.

—

Follow @NeilMDavidson on X platform.

This report by The Canadian Press was first published Sept. 14, 2024.

The Canadian Press. All rights reserved.



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CF Montreal finds its groove with 2-1 win over Charlotte

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September 14, 2024

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MONTREAL – CF Montreal is back in the win column after securing a 2-1 Major League Soccer win over Charlotte FC on Saturday night at Stade Saputo.

Montreal’s form had suffered of late, with just one win in MLS since July, but Laurent Courtois’ squad showed a level of poise and control over the tempo of the game that had not been seen since the beginning of the season.

“What we’ve changed in the last few weeks or months in terms of our methodology or coaching, is nothing. We did the exact thing, We had the exact same words, and we expressed them the exact same way,” said Courtois. “Today, everything just clicked.”

Caden Clark scored for the first time as a Montreal (7-12-9) player in the 23rd minute, in addition to Bryce Duke’s goal three minutes later that ended up being the winner, while Tim Ream found the back of the net for Charlotte (10-10-8).

Montreal had the first major scoring chance of the match after 15 minutes of play. With a free kick roughly 25 metres away from goal, Gabriele Corbo sent a near-perfect shot smashing off the crossbar.

Montreal would continue to dictate the tempo in the opening phase, finding first blood just seven minutes later.

Following a phenomenal triple-save from Charlotte goalkeeper Kristijan Kahlina, the ball fell to Clark who volleyed the ball into the wide-open net, picking up his first goal for the club.

“I think you don’t lose the feeling (of scoring), everything happens for a reason, you just can’t lose yourself in the chaos,” said Clark, who had missed a full season due to injury and was briefly without a club, but was grateful for Courtois’ confidence in him.

“(To have a coach’s confidence) is huge and is something I’ve had both ends of so you just can’t take advantage of that in the wrong way. I’m going to keep my discipline with the game plan and keep my head right.”

With momentum completely on their side, the home side doubled the lead just three minutes later. Montreal continued to build up play on the left flank and found a streaking Raheem Edwards in behind the defence who cut the ball back to Duke, sending the Stade Saputo crowd into a frenzy.

Just after the half-hour mark, Charlotte pulled one back through a set piece — something Montreal has struggled defending all season — as Ream rose above everyone at the back post to score his first with his new club.

The second half began in a similar fashion to the end of the first, with Charlotte pressing high up the pitch and forcing several turnovers in dangerous areas. After surviving the pressure, Montreal began to regain control of the game near the hour mark, enjoying the lion’s share of the possession while Charlotte looked to hit back on the counterattack.

“I think when we conceded that goal we were like ‘here we go again.’ 2-1 is a tough lead before halftime … and at the beginning of the half we kind of shot ourselves in the foot and they pressed a bit more, they moved a bit more forward and that opened some gaps,” said captain Samuel Piette.

“I was happy with that, it shows character. At the end of the day, we just wanted the three points and that’s what we got.”

As the game progressed, Charlotte pushed harder to find an equalizer but to no avail. With only one shot on target conceded, the second-worst defence in the league put up an impressive front and confidently rebuffed every single Charlotte attack.

“I’m a big fan of the back five’s performance in their discipline, competitiveness, and synchronization with balls in behind,” said Courtois.

“We can’t explain sometimes in a game it’s not there, they’re capable and today they showed it. Let’s see tomorrow.”

UP NEXT

Both teams are back in action on Sept. 18 away from home as Montreal will look to avenge a 5-0 rout against the New England Revolution while Charlotte visits Orlando City SC.

This report by The Canadian Press was first published Sept. 14, 2024.

The Canadian Press. All rights reserved.



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