People looking to cash in by listing their places on Airbnb and HomeAway for Super Bowl weekend should temper their expectations. Beyond Pricing‘s Ian McHenry explains why.
“It looks like the Super Bowl is going to be another huge disappointment for opportunistic Airbnbers and HomeAway homeowners,” McHenry writes. Pointing to the weeks before last year’s Super Bowl, in New Jersey, McHenry explains how an excess of supply, low demand and high expectations produced a major flop:
Last year, the weeks leading up to the Super Bowl were filled with tales of people listing their Queens studios, miles from the New Jersey Meadowlands stadium, for thousands of dollars a night. This of course led to more people listing their places for outrageous amounts and so on until there was a glut of supply on the market. After the dust settled, it was clear that none of those people got many bookings.
Phoenix Airbnbers and HomeAwayers should expect much of the same this Super Bowl weekend.
The problem, McHenry further explains, is that Phoenix – like New York City – has more than enough hotel rooms to house the influx of tourists and fans coming to watch or experience Super Bowl host city festivities. “Couple that with the thousands of people suddenly listing their place and you get a case of a basic failure to fully grasp supply and demand,” writes McHenry, adding that a lack of available data is to blame.
What events should Airbnbers and HomeAwayers target for big paydays? Events like South-by-Southwest (SXSW), McHenry writes, “is one such ‘black swan’ occasion where the demand for the event is so huge that spillover [from hotels] is enormous.”
The following graph documents room availability in Phoenix for the Super Bowl and in Austin for SXSW.
Banking on huge demand for rooms, people are flooding the Phoenix market with available listings; but again, the problem for the sharing economy real estate market in the Super Bowl host city is that there just isn’t enough demand to justify the supply.
In Austin, it’s a different story. For SXSW, McHenry writes that Beyond Pricing is “already seeing bookings at 6-8x their normal rates.”
Is there anything Phoenix Airbnbers and HomeAwayers should do to avoid missing out on any profits? Yep: “It’s time to throw a Hail Mary and drop prices and hope you’ll stand out among the hordes of other listings still unbooked,” McHenry writes.
Graph via Beyond Pricing
