The (Overdue) Collapse Of Short Term Rentals

hort term rentals are a one hundred BILLION dollar [$100,000,000,000] market that have reshaped global tourism, accelerated a nation-wide housing crisis, and created fortunes for early adopters. But now customers, the government, the public AND the hosts themselves are turning their back on a concept that started out as a fun alternative to stuffy hotel chains, but became everything wrong with modern real estate.

The short term rental market took off when Brian Chesky and Joe Gebbia tried to rent out a spare room with an air mattress to attendees of a conference because they realized all of the hotel rooms had been booked out.

They called their service Air Bed And Breakfast which was later shortened to the short stay app that you know and love (or hate) today. Air BNB is now worth more than hotel chains like Hilton and Wyndham combined. The company is by far the largest short term rental company, and it has achieved excellent penetration into markets around the world where other similar peer to peer or network market apps like Uber, Doordash, Lyft and even Amazon have failed to take share away from local competition.

It WAS a good idea, customers loved it for giving them a cheaper alternative to outdated hotels, and hosts liked the opportunity to earn extra income on a spare bedroom or even an entire separate property.

But the four parties that make the short term rental market work, the customers, the hosts, the public and the platforms are all not dealing with four unique problems that are threatening to undo this market and take out a lot of other real estate investments with it.