Jijesh Ramachandran, founder of Iksha, the property management firm that manages Captains Quarters, says that with zero revenues, managing these properties has become a pain. Ramachandran, after all, pays for the maintenance of these luxury properties—which can be as high as Rs 50,000-Rs 60,000 ($650.07-$780.08) per month—in addition to a fixed monthly rent to the property owner. The next few months are not going to be easy. Ramachandran says that if occupancy doesn’t kick in, he might have to drop some of the properties. He has already started negotiating with property owners to move to a revenue-share model.
Another Goa based property manager, Serene Escapes, is struggling with similar issues. Founder Rupesh Bora says that he has halted payments to property owners for now and might end up delisting 20% of his properties if tourism is affected for more than 2 months.
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While property owners account for just a fraction of Airbnb’s listings, they aren’t the only ones second-guessing their listings. The meltdown in the travel sector is forcing some hosts to ditch short-term stays altogether. While these offer higher returns—about three to four times what they would earn from long-term rentals—the stability that longer rentals offer is now more appealing.
Tanushree Garg runs a two-bedroom homestay in Delhi suburb Dwarka. A single mother with a college going son, Garg used the homestay income to save for her son’s education. “I am considering putting my ground floor, which was earlier a homestay, on rent. At least there will be some stable income,” says Garg, who has already received a few enquiries. Moreover, in the wake of the pandemic, Garg feels it is safer to allow a family to stay for a longer period than frequently changing guests.
The Bengaluru-based host quoted earlier, however, feels that while long-term renting is fine, a lot of homestays may not be suited to it. Service apartments and homestays are generally furnished for shorter stays, with amenities like washing machines and functional kitchens less of a priority.
From short to medium
Airbnb, too, has attempted to alter its DNA by jumping on the long-term renting bandwagon. In early April, the company introduced new features aimed at longer term stays. It’s not that the option wasn’t there before, but the company has given it greater prominence in the hopes of retaining listings and continuing to attract guests.
“Many guests may be looking for weekly and monthly stays closer to home. By opening your calendar up for longer stays, you can attract these guests, get more predictability throughout the month, and reduce the amount of time you spend cleaning and prepping for new guests,” Airbnb said in a blog post.
Prashanth Rao Aroor, CEO at Intellistay hotels says that Airbnb is actually looking to tap into the medium-term market—three to four months—rather than one- or two-year-long leases.
“It makes sense because it will still be more economical than long stays in hotels. It all depends on how well they are able to communicate it,” says Aroor. These sorts of arrangements are popular among students pursuing internships or corporate professionals deputed to short-term projects.