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The short-term rental industry is not exempt from the travel industry’s struggles due to the coronavirus crisis.
Local Airbnb hosts report the majority of guests – and in some cases all – have canceled their trips to Springfield through May, and many already have watched trips terminated into the summer.
Eric and Tania Reavis, owners of a hip joint Springfield LLC, have created another small business in the past 18 months managing short-term rental properties. Organized as Sweetwater Renovations LLC, they own nine homes across Springfield, Ozark and Hollister. The couple say they’ve taken a major hit from the COVID-19 pandemic.
“We’ve seen about 60 bookings cancel between the beginning of March until July,” said Eric Reavis. “In a typical year, summer months would have about 90% occupancy. Right now, we’re at about 25%.”
That’s resulted in a loss of $10,000 in March and $15,000 in April. Eric Reavis said May cancellations already have amounted to another $10,000 loss.
“As things started unfolding and the universities closed, the revenue started drying up,” Eric Reavis said, adding local college graduations typically fill up their Airbnb properties.
Tania Reavis said they were also completely booked one year out for the National Christian HomeSchool Basketball Championship that was canceled in March.
Cancellations also have plagued the city’s hotel and hospitality industry.
During the first full week of April, hotel occupancy dropped to 21% across the city, compared with 88% at the same time a year ago, according to past Springfield Business Journal reporting. Furloughs have been enacted across the city’s hospitality industry, and the U.S. Travel Association expects the national travel industry to lose 4.6 million jobs this year.
Additionally, Springfield-Branson National Airport recorded a 95% drop in April daily passenger counts from 2019.
The Reavises say they have seen some funds trickle through because Airbnb Inc. agreed to pay 25% of cancellation fees to U.S. hosts, which will amount to roughly $250 million nationwide, according to a news release.
Payments to hosts were released in April, and the Reavises received nearly $830.
For travelers, Airbnb waived cancellation fees and have refunded or issued travel credits for canceled trips that were planned for March 14 through May 31 because of the impacts from the coronavirus pandemic. The World Health Organization declared the coronavirus outbreak to be a global pandemic on March 11, resulting in travelers changing their plans worldwide.
Worldwide, Airbnb hosts lost $1.5 billion in bookings in mid-March, according to market research firm AirDNA LLC.
According to the Airbnb website, reservations made before March 14 with a check-in date after May 31 are subject to the host’s cancellation policy. The Reavises say their policy allows them to keep 50% of the trip revenue if a guest cancels.
Airbnb also has created a $17 million grant program called the Superhost Relief Fund. A “superhost” is an experienced Airbnb host with positive reviews and ratings, according to the Airbnb website. To qualify for the funding, hosts have to show a reliance on Airbnb as a vital source of income and loss of significant earnings because of COVID-19, among other qualifications, according to Airbnb.
Tania Reavis said they don’t qualify for Airbnb’s Superhost Relief Fund, but the company’s cancellation relief will cover about $12.50 for a $100 stay. Their listings range from $55 a night to $225 a night, according to postings on Airbnb.com.
Eric Reavis says he’s already seeing hesitancy among summer travelers, noting some have cancelled and their bookings are below the normal rate.
“It’s been tough to promote because people don’t want to come into an area with COVID-19 cases. People don’t want to come into town with nothing to do,” he said.
Justin Skinner, owner of Prixel Creative LLC and real estate agent at The Closer’s Agency, said he’s had to shift his Airbnb business because of the impact of COVID-19.
“Whenever [Donald] Trump announced the flight shutdown, we had most of March filled up. Within 48 hours, 75% of our bookings canceled … and in April, we don’t have any, which is pretty crazy,” Skinner said. “It’s pretty much dismantled the short-term rental industry.”
Skinner and his wife, Kendra, operate two Airbnb lofts above their Prixel Creative office on Commercial Street, a house in Rountree and a home near the new Route 66 Food Truck Park on St. Louis Street.
He said because travel has come to a halt, they’re considering offering 30-day rentals at all of their properties. Right now, they’re hosting a traveling nurse for an extended period.
“We may fully pivot to that to help pay the bills for now. When we sense things are getting better, we’ll shift back,” he said. “The light at the end of the tunnel is small, but it’s there.”
Skinner said the income from running Airbnb sites originally was intended to help with the mortgage of the C-Street building. Now, it’s grown to also offer some supplemental income, he said, adding they’re recording about $12,000 in annual sales from each property.
Another Airbnb operator with two lofts on C-Street and one near Missouri State University is also making do. Melinda Headrick said she’s hosting a man with leukemia who’s self-quarantining from his family for the foreseeable future.
“If it weren’t for him, we’d be at a total loss,” Headrick said.
Headrick says C-Street Airbnbs typically stay booked every weekend during the spring and summer, but the two lofts she manages on the street have no bookings for the summer months. The Airbnb website shows roughly 20 locations in the C-Street area.
Her two lofts are priced at $85 and $150 per night, according to the Airbnb site.
“We’ve been hit hard,” Headrick said, declining to disclose financial details. “We always stay busy and consistent, and going into our third year, we’re at a standstill right now.”
The first downtown Springfield branch for Arvest Bank opened; a longtime licensed massage therapist became a first-time business owner; and 7 Brew Coffee opened its fourth shop in Springfield.