- Airbnb and Vrbo hosts told Insider that high-end and low-end listings were being booked this summer.
- But it's mid-tier listings with dated furniture and hosts stubborn on price that can't find guests.
- Travelers this year have "Champagne tastes on a beer budget," a host in Phoenix said.
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Airbnb and Vrbo hosts told Insider that a certain type of rental was struggling this summer.
It's a step up from the cheapest room in town, but it's a step down from a McMansion with a game room and a pickleball court.
Maybe the furniture is outdated and the amenities are limited — a pool, but no hot tub — and the host is stubborn about the price.
It's a listing stuck in the mediocre middle, and it's not getting booked — even during the most competitive summer for hosts in the past three years.
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Hosts' revenue is expected to decline on average this year for the first time since the pandemic, according to the short-term analytics site AirDNA. Likewise, average occupancy rates — how many nights an Airbnb is booked each month — are also forecasted to fall slightly, to 56% from 58%. Hosts told Insider that trends they were seeing on their dashboards suggested that the mediocre middle would bear the brunt of the downturn.
Jamie Lane, Air DNA's chief economist, said the trend was going to stay.
"As short-term rentals get more and more mainstream, there's going to be higher expectations that go along with it," he told Insider.
Airbnb declined to comment.
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Luxury properties do well without trying
Luxury properties are staying booked, largely because their clientele is removed from the economic uncertainty facing budget travelers, short-term-rental-property managers told Insider.
"It's a completely different clientele. They're not concerned with a dip in the stock market or whether we're expecting a recession," Ric Kenworthy, a Phoenix manager who oversees 92 properties, said.
Five of Kenworthy's listings fall in this luxury tier. They cost up to $800 a night and have infinity pools, bocce set-ups, and pickleball courts. Kenworthy said these properties had been 80% booked this summer, running higher than the projected average of 56%.
Katie Kay Mead, a manager in Lake Arrowhead, California, who oversees seven Airbnbs, said she was seeing a similar trend.
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A five-bedroom luxury lake house she manages currently rents for $600 a night and comes with a game room, hot tub, and dreamy views of the water. Mead said it had already been booked for every weekend this summer.
Budget travelers this summer have 'Champagne tastes on a beer budget'
Meanwhile, budget travelers have an abundance of listings to choose from and are perusing with high expectations.
"They have Champagne tastes on a beer budget," Kenworthy said.
Hosts said it came down to aesthetics for many of the listings getting stuck in the mediocre middle.
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Guests who are scrolling through listings are craving something that "jumps off the page," Kenworthy said. "People want to stay in a place that's nicer than the one that they live in."
Kenworthy said that in Phoenix this meant "crisp black and white modern" or "Spanish hacienda style." Drab, outdated interiors are getting passed over, he added.
Mead said the listings in California that weren't staying booked looked like "somebody in the family decorated in 1978 and everything is a time capsule."
"Broadly, the narrative is that you have to have higher-end finishes," Lane said. "You can't keep the 30-year-old grandma furniture in place, rent it out, and expect to get good occupancy levels."
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