Airbnbs in Phoenix are oversaturated? 🏜️

Welcome to your Friday edition of Keys. Let's dive into today's stories:

• Saturation in Phoenix has property owners reconsidering 🏜️

• Timeshare industry is undergoing a significant transformation 🔄

• A chilling incident in a Nashville short-term rental property raises questions about security 🚨

• 🔥 Deal of the Day! 🔥: 1 bd | 1 ba | Callicoon, NY

Airbnb Oversupply in Phoenix: A Golden Goose No More? 🐣

The real estate market is a dynamic beast, constantly evolving and presenting new opportunities and challenges. One such evolution is the rise and subsequent saturation of short-term rentals, particularly in the Phoenix metro area. Investors who once saw Airbnb as a golden goose are now feeling the pinch as competition intensifies.

Marlene Mousseux, a property owner in Scottsdale, has experienced this firsthand. Her three-bedroom property, which she rents out on Airbnb when not in use by her family, faces stiff competition from nearby rentals, many of which are managed by companies that undercut prices. The winter months bring a flurry of activity, but the hot desert summers see a significant drop in bookings.

This trend isn't isolated to individual property owners. Large companies that bought up properties for short-term rentals are now either selling them or converting them into long-term rentals. The reason? The market is saturated, and the expected profits aren't materializing. The notion that simply listing a property on Airbnb or VRBO would lead to a windfall has proven to be a misconception.

A report from Forbes highlights how quickly Airbnb fees can accumulate, with Phoenix rentals ranking high on the list. Even high-profile events like the Super Bowl and the WM Phoenix Open in February didn't bring the expected boom. Studies reveal that nearly 50% of all short-term rentals in the greater Phoenix area were vacant during this period.

Data from AirDNA, a company specializing in short-term rental analytics, paints a similar picture. They predict a continued decline in occupancy due to increased supply, with a nationwide occupancy rate of 57.6% forecasted for the year.

While some property owners, like Mousseux, are considering converting their properties into long-term rentals, the love for their homes and the ability to use them personally is keeping them in the short-term rental game. But the reality of the market is clear: the short-term rental market is no longer the easy money-making venture it once seemed.

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Timeshare 2.0: The Power of Research and Advocacy 📚

The timeshare industry, often considered the pioneer of the sharing economy, has been undergoing a significant transformation. This change is driven by the American Resort Development Association (ARDA), an organization that represents the interests of the industry and millions of timeshare owners across the United States.

ARDA's role is multifaceted. It advocates for legislative interests, ensuring a balance between consumer protection and economic development policy. The ARDA International Foundation (AIF) supports these efforts by providing valuable research and insights.

Jason Gamel, the president and CEO of ARDA, emphasizes the importance of data in shaping the narrative of the timeshare industry. Initially, the focus was on comparing the timeshare industry with other hospitality sectors, such as hotels. This comparison helped financial analysts, banks, and legislators understand the product and the industry better.

The data has evolved over the years, and now it serves multiple purposes. For instance, it highlights the resilience of the timeshare industry, especially in the wake of the pandemic. According to the AIF State of the Industry Report, the average annual timeshare occupancy in 2022 was 77.6%, significantly higher than the 62.1% total room inventory at U.S. hotels.

The data also reveals a generational shift in timeshare ownership. The average age of today's timeshare owner is 39, and 57% of timeshare owners are Gen Z and millennials. This demographic shift is influencing the types of products and services offered by timeshare developers.

ARDA's research also highlights the positive economic impact of timeshare on local communities. A travel party of four spends over $2,200 on average, contributing to a total off-site consumer spending of around $4.56 billion.

ARDA's advocacy efforts extend to influencing regulatory landscapes. The Resort Owners' Coalition (ROC) was established to protect timeshare owners from unfair and restrictive regulations. ARDA uses its research to educate lawmakers about the unique position of timeshares, which straddle the line between real estate and hospitality.

The timeshare industry has come a long way since the 1980s and 1990s when it was plagued by bad players. Regulation has helped clean up the industry, attracting big hospitality brands like Marriott, Hilton, and Disney. These brands have reinvented the timeshare industry, offering point-based products and exclusive experiences that appeal to a new generation of owners.

ARDA's research and advocacy efforts have been instrumental in transforming the timeshare experience, making it more flexible, convenient, and appealing to a younger demographic.

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Rental Nightmare in Nashville: A Wake-Up Call for Security? 😱

A chilling incident unfolded in a Nashville, Tennessee short-term rental property when a mother discovered a stranger sleeping between her two children. The incident occurred at a complex on Seventh Avenue North, in a unit rented from Sonder, a short-term rental company.

The mother and her husband had stepped out and returned to their rental around 3 a.m. to find a man sleeping on the pull-out couch between their children. The woman managed to take a photo and a video of the man before waking him up, at which point he lunged at her and fled.

Police were called to the scene and found 31-year-old Tanner Tamsin on the first floor of the building. He was subsequently arrested and charged with aggravated burglary and assault.

The incident has raised questions about the security of the building, which requires an access code to enter. It remains unclear how the man gained access to the unit. Sonder Holdings, the company managing the rental, has not yet responded to inquiries about the incident.

This alarming event has left other renters in the building feeling uneasy and has underscored the importance of ensuring the security of short-term rental properties. Yikes.

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🔥 Deal of the Day! 🔥

Address: 66 Kratz Road, Callicoon, NY 12723

With its modern amenities, low maintenance, and idyllic location on over 4 pastoral acres, this nearly new build in Callicoon, NY offers a perfect country escape, making it an ideal vacation rental for those seeking a tranquil retreat amidst nature.

Airdna data:

Estimated monthly payment: $2,800/month

Estimated monthly revenue: $3,400/month

Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.

That's all for this week, folks! Remember, knowledge is power, so stay informed and stay ahead. If you're enjoying Keys, share it with your friends and help them stay in the loop too! 🚀