Airbnb, bach owners slash rental rates

‘‘It’s not my livelihood, but I’d like to at least pay for our outgoings.’’ Claire Mackintosh,

Ilam property owner

Owners of holiday rentals are slashing their rates hoping to attract Kiwi guests while New Zealand’s borders remain closed.

Overnight stays in homes and rooms advertised on platforms such as Airbnb have fallen steeply in price as large numbers sit empty across New Zealand.

From about 25,000 bookings a week just before the Covid-19 lockdown, numbers tumbled to 3000 in April before picking back up in May, according to AirDNA, which compiles data on Airbnb and Expedia-owned Vrbo.

Revenue dropped by about threequarters from mid-March to mid-May for homes in the top markets of Queenstown, Rotorua, Auckland, and Christchurch.

Airbnb said bookings had rebounded with a flurry when New Zealand reopened domestic travel, and last week were at 85 per cent of preCovid levels.

Sarah Liddell lists a three-bedroom property on the site of her own Queenstown home on Airbnb, and manages listing for other owners.

Liddell’s place is currently occupied by an overseas family stuck in the town, but she will cut the nightly rate from $350 to $250 when they leave soon, she said.

The other homes she manages have been vacant, and their owners have not looked for long-term tenants as they want their places free for their own holidays.

Airbnb bookings had ‘‘just died’’ with the lockdown, Liddell said.

‘‘But with things starting to open up, inquiries are starting to come in. Slowly, people are starting to travel again, and I’m feeling quite positive.’’

This week’s announcement of skifield opening dates was ‘‘massive’’ for Queenstown, and cut-price deals for adventure attractions like bungy jumping would also help, she said.

This week Air New Zealand announced it would resume flights to Queenstown before Queen’s Birthday Weekend to meet demand. The following week it will restart flights to Taupo¯ and Queenstown.

AirDNA says New Zealand’s shift to alert level 2 triggered a ‘‘sudden jump’’ in bookings as Kiwis took the opportunity to plan domestic travel.

The average nightly Airbnb rate this weekend is $190 to stay in a home in Rotorua and $353 in Queenstown, or $108 and $118 respectively for a room.

Claire Mackintosh lets out a house in the Christchurch suburb of Ilam through Bookabach, which is also part of the Expedia group, as well as through Holiday Houses, which is owned by Trade Me.

She had a guest in residence when the lockdown was announced, who had to leave with one hour’s notice to fly home to Canada.

Macintosh has had ‘‘a whole lot of bookings made and cancelled’’ during the lockdown, and has dropped the nightly rate by 40 per cent. She will also leave extra days between bookings for deep cleaning.

She now only has two weekend bookings coming up, including one at Queen’s Birthday Weekend, but then has none until late July, she said.

‘‘It’s not my livelihood, but I’d like to at least pay for our outgoings. It’s usually quiet this time of year. I’m hoping it might pick up a little bit when people start travelling again.’’

Macintosh said a long tenant would be one solution, but would probably mean getting rid of furniture, while long-term renting was ‘‘a whole different thing’’ from hosting.

Government statistics show that one in five visitors to New Zealand stay in Airbnb accommodation. That amounts to 8.8 million nights or 18 per cent of the total short-term accommodation market each year.

The sector is most dominant in Queenstown, with 20 per cent of all properties listed on Airbnb last year. The next highest is Rotorua with 4 per cent on homes listed, with under 3 per cent for all other centres.

Queenstown also has the highest saturation of international guests, accounting for 70 per cent of all bed nights, with Christchurch and Auckland the next highest at about 50 per cent, according to Stats NZ.

A recent survey by accounting firm Deloitte illustrates how exposed Queenstown is to New Zealand’s closed borders, with its tourism income forecast to almost halve with an annual drop of $1.9 billion.

Te Anau real estate agent Don McFarlane of Ray White said there had been ‘‘a couple of inquiries’’ from private holiday stay providers wanting long-term tenants.

The number of Airbnb and similar homes in the town has jumped in the past few years and normally rental homes were ‘‘as scare as hens’ teeth’’, McFarlane said.

Kelvin Davidson, a senior property economist with CoreLogic, said Airbnb homes had popped up on the long-term rental market, and some owners were starting to inquire about selling.

Davidson described Airbnb’s penetration into the Queenstown accommodation sector as a ‘‘potential faultline’’ for the town’s property market, with the ability to suppress rents and property prices.

‘‘The market will be vulnerable in those locations. We’re seeing that happen already in Australia and there’s evidence here already that the rental market is taking a bit of a hit.’’

He said Queenstown would be hit ‘‘more strongly than anywhere else. We’ve heard already of rents falling.’’

Davidson said it was too early to know whether to expect an increase in mortgagee sales.

‘‘That’s normally a last resort, and banks don’t want it. But there’ll be pressure on investors.’’

He said the type of property would determine the outcome for owners of holiday homes – for example, family homes might sell more easily than apartments in tourist spots.

Early in the lockdown Trade Me reported a jump in furnished homes listed for long-term rental on its site, and spokesman Aaron Clancy said it was ‘‘still seeing a steady increase’’ as property owners dealt with the effects of the hit to tourism.